Five value-added approaches

Professor Gene Wengert presents ideas on adding value to your wood products. April 2, 2002

by Gene Wengert, President
The Wood Doctor's Rx, LLC

1. Add value to present product

--Make it better; upgrade it

--Make what the customer wants

--Rename "low grade" lumber to "industrial grade" lumber

--Manufacture short lumber (at least 10x more valuable than chips)

2. Sell the same product you now manufacture, but sell it to a different market (where it is more valuable)

--sell to hobbyist

--sell No.2 Common to furniture/cabinet

--sell No.3 Common to flooring mill instead of pallet mill

--sell cants

3. Make a new product (i.e., "new" for your operation)

--Try to enter an existing market for wood; BEWARE: Often competition is well established

--Enter a market where you are substituting wood for another non-wood product

--Enter existing market, but market not well served or market with room for expansion

--Enter new/developing market

4. Get more value from the present resource (less low value, less waste, better processing)

--end coat logs (at least 4%) and lumber (up to 4% gain)

--sawyer efficiency (up to 22%)

--Don't sell veneer logs

--Make lumber without stain; lumber that is flat and smooth

5. Improve marketing and sales

--"I'd rather justify my prices being high than excuse my quality being low."

--"Are you interested only in price" (17% say yes!) "or are you interested in quality and availability (delivery)?" (27% are not strongly interested in price)

--Pick two

* quick delivery

* low price

* high quality