Question
The July 2004 issue of Sawmill and Woodlot Mgmt. magazine published an article I wrote titled, "Six Simple Marketing Steps to Improve Profitability." My 6 steps are insights provided by a successful marketer of specialty wood products (John Krantz of Forest Lake, Minnesota).
Step 1: Decide on Your Market Niche
Before you saw a board, have some knowledge of the market intended for the board. Thickness and width of the boards dictate your market opportunity. For example, for users of specialty wood, consider that the scroll-saw market prefers wide boards, 1/2 inch or thinner. Wood turners prefer hardwoods that are three inches or more in thickness. Wood-burning artists prefer light-colored woods, usually less than one inch thick.
Wood carvers prefer three, four, and five inch thick, properly sawn, soft hardwoods. The intarsia market wants colored wood, including boards with blue and gray stain.
If you plan to sell to cabinet makers, a nice clear one inch thick board is great. It is lower grade, but wide two inch planks sawn from semi-rot resistant species are good sellers in farm country.
The bottom line is to figure out what business you are in (your niche) before sawing the first log.
Does anyone have any comments?
Forum Responses
(Value Added Wood Processing)
From contributor K:
I sell mostly slabs and turning wood. The smaller woodworker nibbles away at my stockpiles as well and 4/4 and 6/4 sell well. I find the thicker material tends to be in more demand for me because the large wood outfits don't carry them.
I also offer “trade in” for material that the customer thinks they need, but then takes it home and it isn’t working out for them. I take it back as long as it isn't damaged or worked in any way. I also focus on bowl turners and carvers. The lumber I sell is always kiln dried, even though sometimes it picks up some moisture even covered up in a shop. I explain fully anything that may or may not affect their project.
This one should be a no-brainer, but it is worth discussing. Most customers prefer 100 percent usable wood. They're usually not eager to pay for knots, splits, spots, streaks, etc. You can make your product more desirable to customers by end-trimming boards, defecting out knots, straight-lining the edges, and planing the surfaces.
If you sell to specialty wood markets then the traditional long board might not be considered as high quality as a shorter board. For example, go into a brand name woodworking store and quiz them about board lengths. They will tell you that they often saw long boards into short boards for customers. Any wide boards, even short ones, are often irresistible to a customer. The bottom line is that a quality product will sell itself.
Why let someone else take 40 percent or more of your profits when you can do it yourself? The biggest challenge, however, is often finding the retail user.
Today, the internet is becoming a popular way to retail products from home or office. Establishing a retail outlet at your mill could be the right choice for you depending on location, traffic flow, etc. Depending on your product an option is to take your product to the customer (wood-carving shows for example).
Selling retail takes extra time and individual sales can often be small (such as at craft shows). However, selling retail gives you an opportunity to interact directly with the end-users of your product. Satisfied customers can turn out to be customers for life, and they will tell their friends.
Also we have our own crew that helps out. A planer is a must. It is the most profitable machine we have. We use a helical head which can handle a hundred thousand feet before the knives need to be rotated. We have not been able to retail shavings. So we grind them into sawdust, screen for size, and sell it all for a good profit.
We have put in a moulder several years ago, and it has paid off handsomely. Almost every order run through it is retail. We have a common carrier that gives us a 70 percent discount which helps on freight.
I also will sell just one board to help a customer. I try to be efficient about it, but also use it to promote our business. On the other side, I take orders that I do not price correctly and make very little money. It takes a lot of thought to price sometimes. We always have waste that must be used. For example, if the order is for all ten foot material and the log goes goofy, we have to have a place for the shorts to go. It takes a lot of planning.
Organizing your product, whether in your lumberyard, shop, or at a retail show, has a direct bearing on sales. If you're selling at a craft show, for example, it's often good to lean any larger products upright (against a wall) and stack similar sizes together by species. Also, try to keep the smaller pieces at waist level so customers can easily view and handle the product. And don't forget that you are part of the presentation package as well.
Remember that customers attending an art show or up-scale craft show are much more willing to pay higher prices for wood products than folks stopping at your mill. One of the big differences is that mill prices are typically commodity prices. Art shows, however, tend to be specialty markets where the sky can be the limit. So if you have a product (like basswood or butternut carving stock) that is truly a "specialty product," then set your prices accordingly.
One of the secrets for success is the attention given to the customer. Remember, to make a profit you need to satisfy the needs and wants of customers. The Philosophy of Krantz Wood Sales is that "every customer has a unique need." I always keep a notebook handy," Krantz explained to me, "to jot down the name, address, and special needs of customers. Sawmill operators and other wood manufacturers should do the same thing. When you saw a product a customer can use, check your notebook and contact them. This is a special touch that keeps the customer coming back to you time and again."
