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pricing large slabs - TomFromStLouis - 05-15-2018
Ever since my partner Joe and I began selling wood from the St. Louis forest we simply priced it by the board foot. Same price per bf for 4/4 and 8/4, 25% premium for anything 12/4 and over that has been dried. We have different price codes to account for grade and figure and this has worked well for us and for customers. We probably could get more for some of the very best stuff - it flies out when people find it - but when you are only open four hours per month you need to offer value, so we do.
This is not really news, but large slabs are hot hot hot right now. So we have bins full of 18-24"+ wide rough sawn slabs that have one or two live edges that scale to a total of $100 -250. This, it turns out, is value, because somewhere around this size the market pricing goes parabolic. I am hearing from those who walk into my local competitors more often than I do that $500-750 is more the norm for a 12' walnut slab and if it goes over 30" wide it is easily four figures, maybe even $2000+. It is possible some of these numbers apply to flattened and sanded slabs (which we do NOT offer). That width does not come from the portable band mills we use, but we just found a local Lucas slabber and will soon be offering 40+" wide ash slabs.
It is time to make sense of slab pricing and this is where you can help me. If I apply my A+ price code to a 100bf ash slab, I get ~$400 (including the thickness premium of 25%), clearly far below the local market as I now know it. Double it and I think the price would still be on the low end (where I want my prices to be), but how do I reconcile $8 ash right next to top grade ash for $3.25? It's a bit crazy, but where exactly is the inflection point and how do I systematically apply this kind of crazy?
This is the problem I have run into on any extra nice material. Our prices are geared towards quality clear boards but when they get really wide or offer special figure then my method yields the kind of value that makes us a destination. I want to retain that reputation but we are trying to make money too. Any ideas welcome.
RE: pricing large slabs - overland - 05-15-2018
You're right: you're selling the nice slabs too cheap. I speak as one who has bought one or two slabs in my life and wish they had been cheaper. I suggest you call people who sell them and ask for advice. There are a number in the Chicago region who might help you: Horigan Forest Products, which basically does what you do in Chicago, only on a somewhat larger scale. (The prices are quite high in my opinion.) There's a woodnetter, I think, who sells slabs in Milwaukee, maybe out of the Urban Wood Lab? And Johnson Creek Hardwoods, in western Illinois, is a small but first rate operation that uses a lot of salvage wood. Any of these small outfits might be willing to give you advice and tell you how they price slabs.
RE: pricing large slabs - Bill Holt - 05-15-2018
Tom, I have owned two businesses, both were in unique industries having nothing to do with wood. In the first, we were the highest priced in the industry but we included service our competitors didn’t. In the second business I was lower priced than most but I had lower overhead.
You are providing a product and deserve a decent profit. If you are making a good profit at your prices, the word will get out and you will have as much business as you want. Good luck on finding the right formula for your business.
RE: pricing large slabs - barryvabeach - 05-15-2018
I have made about a half dozen live edge slab tables for friends in the past 6 months and I see a great variation in price. I have seen, and walked away from, pricing in the $700 and up, and even double that in some cases, for wood that is dried and flattened. In general , I have paid around $300 to $400 for cherry and walnut, that is rough sawn, mostly dried , and roughly 6/4 to 8/4 , and a little cheaper for oak ( when flattened it worked out much closer to 6/4 ) I fully expect to pay a premium for live edge that will suit the project - for my case, I need desks that are around 30 inches wide, a little wider being better, and around 6 feet long. I would pay a premium for fully dried lumber, but have gotten some great pricing for lumber reading 20% moisture. Most of what I find needs to be flattened as well.
No matter what your price, you will always find competitors that are much more expensive than you ( think festool v. bosch, or for hand plane guys - Sauer & Steiner v. Lie Neilsen - yes, not a true head to head, but the point is that they both make very nice hand planes, one just costs about 10 to 20 times what the other guy charges.) and others who charge less than you. My suggestion is if things are flying out, you should try increasing the price a little on the next run, and see how it goes. I wouldn't go with drastic price changes, since you will scare off many of your current customers, but if you increase your price 10%, and everything else stays the same, your profit will go up way more than 10%, since the increase is all profit.
RE: pricing large slabs - Gary G™ - 05-15-2018
Do you plan to be open more than 4 hours per month?
RE: pricing large slabs - Arlin Eastman - 05-15-2018
(05-15-2018, 11:08 AM)TomFromStLouis Wrote: Ever since my partner Joe and I began selling wood from the St. Louis forest we simply priced it by the board foot. Same price per bf for 4/4 and 8/4, 25% premium for anything 12/4 and over that has been dried. We have different price codes to account for grade and figure and this has worked well for us and for customers. We probably could get more for some of the very best stuff - it flies out when people find it - but when you are only open four hours per month you need to offer value, so we do.
This is not really news, but large slabs are hot hot hot right now. So we have bins full of 18-24"+ wide rough sawn slabs that have one or two live edges that scale to a total of $100 -250. This, it turns out, is value, because somewhere around this size the market pricing goes parabolic. I am hearing from those who walk into my local competitors more often than I do that $500-750 is more the norm for a 12' walnut slab and if it goes over 30" wide it is easily four figures, maybe even $2000+. It is possible some of these numbers apply to flattened and sanded slabs (which we do NOT offer). That width does not come from the portable band mills we use, but we just found a local Lucas slabber and will soon be offering 40+" wide ash slabs.
It is time to make sense of slab pricing and this is where you can help me. If I apply my A+ price code to a 100bf ash slab, I get ~$400 (including the thickness premium of 25%), clearly far below the local market as I now know it. Double it and I think the price would still be on the low end (where I want my prices to be), but how do I reconcile $8 ash right next to top grade ash for $3.25? It's a bit crazy, but where exactly is the inflection point and how do I systematically apply this kind of crazy?
This is the problem I have run into on any extra nice material. Our prices are geared towards quality clear boards but when they get really wide or offer special figure then my method yields the kind of value that makes us a destination. I want to retain that reputation but we are trying to make money too. Any ideas welcome.
Tom
I am glad you have a good market for all of your wood. I go to a local farmer who is now retired from it, but has been cutting up trees for 25 years now. He sells walnut from $2 to $3.5 bf and add .50 for figured woods and $4 for Birdseye maple which would be considered medium to heave eyes in them.
He does slabs and has a barn full of Ash, Walnut, Elm, Q sawn Sycamore and do not know what else and he maybe sell one a month.
If you ever come this way bring some 12/4 figured wood with you so we can turn with it. O and I will show you Pauls place so you may get it cheaper and sell it for more. O and he has about 4 barns full to the rafters with wood and it is 20 feet high.
RE: pricing large slabs - EricU - 05-16-2018
It sounds like you need to sell at more of a premium than you are. If your regular wood is priced low, then I think it might give you more headroom to raise prices on the slabs. But the downside of going too high is that it will sit.
RE: pricing large slabs - BloomingtonMike - 05-16-2018
Take a premium product you have away for awhile. Gauge interest. Reintroduce it at the higher price as a premium advertised product.
RE: pricing large slabs - scottbrader - 05-16-2018
I don't know how your product compares to what I get at my supplier, but I picked up a beautiful 8' 10/4 walnut slab that's between 18" and 26" wide with two live edges for a bit under $300 from my supplier in SE Wisconsin.
RE: pricing large slabs - ®smpr_fi_mac® - 05-16-2018
Where do you live, Arlin?