New Policy @ AdvantageLumber

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wseavey asks:

Small quantities, tied to S4S versus large quantities of of S2S or rough. Lots of difference there. The buyer gets to eat the trimming in both cases, of course, but the result is much higher pricing for the S4S. Advantage is set up to deal with lumber in large amounts; Lee Valley is set up to deal with almost everything in small amounts, relatively speaking. Lumber always costs more per unit in small bits and pieces. I think if you'll check a couple of other mail order general woodworking supply places, say Rockler and Woodcraft, you'll find little or no difference in the prices. Woodcraft actually does more, shipping S2S wood to their local stores that isn't available by catalog or on-line. I don't know if Lee Valley does the same. Even then, Woodcraft keeps a fairly large scale wood shop going to get the wood in shape for the catalog.
Add that to the simple fact that the more wood you buy at one time, the less you pay for it, and you'll note that Lee Valley, Woodcraft, Rockler and others are almost certainly paying more per BF than is Advantage.
A few years ago--2-3?--Grizzly started adding wood to their catalog. IIRC, that venture lasted about one catalog series. Grizzly's owner is no fool: in fact, he's a very astute businessman. If there had been more money than hassle, he'd have kept it going. Rob is almost certainly correct in saying providing wood, at whatever cost, is a customer service and not a profit center of any kind.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
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snipped-for-privacy@aol.comnotforme (Charlie Self) wrote in message
<snip my question>

So there is a qualitative difference between Rob and Robin's stock? I want to be sure you know that for sure because Rob's post implies that there is not: he compared them as equivalents.

True, but even if Robin were to buy retail from someone like Rob, a jackup of 4.7 times seems steep, that was the issue. I would assume, furthermore, that someone like Robin would be able to get wood for less than what Rob retails it.

My question would be the same to Rockler, Woodcraft and the others. Are they selling wood that is really 4.7 times the value, at the consumer end, than Advantage?

<snip about Grizzly>

[I think you'll want to revise that last sentence on several grounds....]
Man, there is something I'm just not understanding about this. Before Renata et al. were discouraged by the new minimum limits, they apparently thought Advantage's wood was fine in terms of quality. The boards at Rocker, Woodcraft and LV are by reason of quantity more expensive, but surely not 4.7 times as much. Is that great a difference to be found in quality and prep? If so then Rob's earlier post equating his wood with Robin's was misleading, right? [NPI!!!]--but no one jumped on him for that, so I'm left to think otherwise.
Floundering in a sea of construction-grade pine, H
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wseavey asks:

Rob implied a lot of things. Actually, when selling small quantities (really, small pieces) of wood, it's easier to get pieces that are top quality, because you can cut around the faults. All boards have faults. Almost all, shall we say. Faults are allowable under hardwood grading standards, within certain limits. But when you take a board down to 3/4" x 3" x 24", you cut off the faults and either toss them or use them elsewhere...usually, they're tossed. That means you get less out of the big board, with more going to the scrap bin, so you have to charge more. Add that to the extra processing and you should start to see the light.

I don't know the actual costs in either case, but as Robin said, his turnover of wood isn't that great, so he's got to supply warehouse space for several pieces of each size in each species in each store, as well as in the main warehouse. That is an expense. Why would you assume Robin could get wood for less than Rob retails it? He's not buying huge amounts, so the mills that turn out loads of many thousands of board feet aren't going to be interested. He may be able to work the price down, but how much?

No. Really, your question should be for the customer: is the wood they buy worth 4.7 times (and this is Rob Pelc's figure, IIRC, and one I've not checked--have you?) what Advantage charges for it? For those who find it a sensible value, I see no problem. They can avoid buying a jointer and planer, and build their projects, saving the shop room and tool expense of prepping their own wood. For those who do not find it a sensible value, then there is no need to purchase it. Go to Advantage, Steve Wall Lumber or another, lower cost, supplier who get about 6 or 7 or 8 times what I pay for green, rough lumber at most mills around my Virginia house. But I have to have the machinery to work those boards up, the space to store them green until they're ready, and the strength to handle larger boards. I wonder how many woodworkers out there are limited to handling smaller lumber for any of a variety of physical reasons. Is the smaller size worth more money to them?

There is no argument about quality, nor have I seen one about price until Pelc brought it up. The argument was about his treatment of a customer who publicly complained about his new policy aimed at keeping only large customers. I once had a book publisher like that: I bitched about his contracts to a writer's organization after I received checks for many thousands of book sale royalties that looked more like checks for a couple of relatively short magazine articles. He jumped all over me with half-factual material and a refusal to do business with me again (a foregone conclusion in my mind when I made the complaint).
And yes, there is that much difference in quality and prep. Lee Valley really, really does have to pay someone to run all that material through machines until quality is near perfect and size is something that will fit within their normal shipping limits. And they really have to pay for the machines and the electricity to run them. And they really have to discard more scrap...and I am sure they have to pay to have the scrap hauled away. And they provide storage space.
Is the actual difference 4.7 times? I have no idea. And, in fact, it's none of my business. (But I just ran a check, and Lee Valley gets 3.65 times the Advantage price for cocobolo, so Rob Pelc's 4.7 is not exact.) If I find the wood a good value, then I will purchase it. If I find the wood a poor value, then I won't purchase it. The mark-up over another company's prices doesn't enter into it unless they are offering exactly the same thing, which they are not. Actually, even then it doesn't enter into it. There is no pistol held to the customer's head, so he, or she, can choose freely.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
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Bingo.
I've bought cocobolo from Lee Valley, mail order. It's very, very convenient to add $10 or $20 worth of small pieces to a $150 order (along with the set of 30 natural bristle brushe for $13 CAD... I add those to almost every order) and it doesn't even increase the shipping charges on what I'm already buying.
And considering my geographic location, even more so.
I could probably get that $20 worth of cocobolo for $10 somewhere else... If I was prepared to drive 5 - 10 hours, or pay $10 in customs duties, or buy a $100 board at one of the two places in town that sell hardwood of any description, and mill it myself in my tiny basement shop...
Or, I could chew on tin foil while shaving my head with a cheese grater.
I've said it before, and I'll repeat myself: Lee Valley offers great value and trememdous customer service. Value and cost are not interchangeable.
The ONLY problem I have with LV is the lack of a store here in Saskatoon... But I suspect a cabal of SWMBOs is paying Robin off.
djb
djb
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Charlie, thanks for an articulate reply that answers most of my questions. I get it now about the size differences: yours and Mike's responses make it clear that the two products can't really be compared fairly (although their cost and profit margins might be if we had a few more figures). Apples and Oranges. I was kind of hoping Rob would jump in to clarify his original comparison....
<snip good explanations>

OK, but given Mike's description of the size of Robin's bins ("a cabinet rougly 5'x3'x24"), that seems a negligible expense--what, a few pennies, literally? Educate me if I'm wrong, because I have no experience with warehouse costs, that's just an intuitive guess. Plus, Rob has the same warehousing issue, no?

Simple: because I can get it for what Rob retails it. I, a nobody, a destructor and mangler of constuction grade pine, an academic nerd. If a man who owns a fairly large and successful business in the industry can't get it for a better price than I can, then I need to adjust my view of how the world works.
<snip comment comparing other WW stores>

My question was for the customer ("at the consumer end")
No, I have not checked Rob or Robin's figures. They both stated them in a public venue, and no one challenged those, so I took them both at their word. Foolishly academic of me, I know.
<snip "de gustibus" comment>

Are you serious? That gives me hope....
<snip>
<snip some obvious observations from both of us>

As a consumer I feel it's my business--just now I don't think it's really possible (Apples and Oranges thing, not enough financial data, etc.). 4.7 was my, not Rob's, figure. I arrived at it by adding the prices of the three woods Rob mentioned and dividing them into the figure Rob presented for Robin's wood. It was an average, IOW. Paduak would be 6.3 times the price.
I did not include any other factors into the equation, which you and Mike were quick to point out. For instance, Rob noted that he provides "surfacing" for .30 bf. I don't really know what he means, but I'll assume a 2s2 surfacing. So, for a 4/4, 8' Paduak board surfaced 2s2, Rob would charge me $34, right? Let's even assume it gets down to 3/4 thickness--that matches Robin's thickest project wood piece (3"x24"), which goes for $12.50 (1-4 quantitiy) or $10.60 (5+). I would suspect I could get more than three pieces out of Rob's board, which at that point would match Robin's price. The more boards (than three) I get out of the eight footer, the better Rob's price becomes. I don't have enough experience cutting boards like that, so I can't begin to estimate if that's a gamble or not.
Your point about customer needs is well taken. If I don't have or don't want to use a TS and jointer or router to get those pieces out of Rob's board, then Robin's service is worth it were he to charge twice as much as he does. It's Apples and Oranges to this consumer.
But for the consumer who uses a TS/jointer, that's a relatively easy, even enjoyable procedure and the circumstances now become more a same-fruit type of problem, no?

Yes, that would be my point too, except that freedom of choice only happens for those who have the knowledge and experience that makes for an educated choice. Thus my questions--which, I fear, are beginning to wear thin, so I'll end here.
Yours, H
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wseavey notes:

Display bins and warehousing space are different. I don't recall what size, if I even noticed--there's one heckuva lot to see--in the Ottawa store, the bin was, but to keep it fed, there has to be more wood stored in back, plus what's stored at the central warehouse, plus what is stored before being run through the machinery. Unfortunately, the answer is never as simple as we'd like.
For the most part, Rob Pelc should be able to store most of his wood in an enclosed environment with little in the way of shelving, etc., as most will be palletized and stacked. This can't be done in a warehouse that also carries a supply of 8000 other items (that figure may be low).

You can get it, if you buy $500 worth a time. Seriously, though, I really have no idea at what stage Lee Valley buys their lumber--S2S, S3S, rough, dry, green, half-dry, etc.--so I'd hesitate about making assumptions on price.

Generally, I pay from 50 to 75 cents a bf for rough, green lumber. I usually figure 50% of that will make usable--not FAS--lumber, with a year drying, a couple months finishing in the shop, planing, jointing, ripping. Sometimes I'm wrong and I lose 70%. Sometimes I'm luckier and lose about 20% and on those batches, I usually find much more FAS and much less #1 Common.

Suspicions don't always work out, as I noted above. I've seen some wood that looked awfully nice in the rough turn out not so nice when planed. Usually, if it looks really bad, it IS really bad. Sometimes, if it looks really good, it's still really bad. Not always, maybe not often, but often enough to reduce suppositions to a guess. There are many people out there who can read a rough board better than I can, which is why I like skip planing once my wood is 6 months dry. Then, I can just about state I know what I'll have in 6-8 months.

But it shouldn't be a problem, because this is not the customer Robin's wood is aimed at pleasing. As someone else noted, it is often easier and cheaper to get inlay material from Lee Valley because handling is so much less of a hassle, but for the most part, those of us with jointers and planers won't be buying this wood.

Don't sweat the petty stuff. And don't pet the sweaty stuff. It isn't hurting anyone at all for you to ask questions, and it may be helping others, so if you have more questions, keep asking. I'll keep trying to answer.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
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snipped-for-privacy@aol.comnotforme (Charlie Self) wrote in message
<snip>

True, but real estate is real estate, and both have to pay for that. The differences in building types and storage, for the same amount of lumber to be stored, still amount to pennies--perhaps using the plural here is excessive.

Or if I picked it up myself, or shared the cost with others for a minimum order, as Rob pointed out, or if I go to a comparable lumber supply.

But regardless it would be safe to assume that the cost would be lower than what I would get the same lumber for, no?
<snip>

Ahhh...the light comes on. Thanks, Charlie
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Hylourgos wrote:

Ah, but I also said, I don't know how much they keep in the back. I only see what is out on the floor, and that is just a small cabinet.
I'm guessing you have never been to a LV store. They don't operate like most stores. Other than a few exceptions (the project woods being one of them), you can't just walk in, pick up your items off the shelf, and then head to the cash. They keep one of everything out on display, and everything else is kept in the back. You fill out an order form, give it to one of the friendliest people you will ever meet, and they go gather it up for you, and bring it back for your inspection, and then you unfortunately have to pay for it (Rob, can you do something about that ;)).
...Mike
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<snip>

Bingo. In fact, I've only seen the inside of one store that would qualify as a real WWing store (can't remember the name, it's opposite a HF in Raleigh NC). And where I live now I don't know of any nearby (Sewanee TN) so I live the vicarious existence of a catalog reader. Some of that stuff you have to see up close, though, I understand.
Regards, H
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Hi -
Yes - the economics are strange but here are a couple of the factors...
1) the smaller the piece - the more discriminating the buyer is, and higher the "reject" rate is...when a consumer buys a 3" x 24" x 1/2" (.25 bd ft), it has to be virtually perfect - no knots, sapwood, dings, bark, warping etc. - an awful lot of it gets sold at much lower prices.
2) the volumes are not high - even in the best sellers, we would only order at most 100 pieces at a time (see #3)
3) the turn rates are lousy - there are so many species, and so many discrete sizes, that it really takes a lot of inventory to keep in stock
4) it's a pain for most wood suppliers to produce - again small quantities, lots of labour - set-up etc.
5) small shipment sizes make for large freight factor.
If we sold in larger lots (say....500 bd feet or so ) then yes, the price would definitely be a ton better. It's sort of like the difference between buying a Coke from a vending machine, and buying a case from Costco....and also realizing that the same Coke from a soda fountain only costs cents for the same amount.... volume, packaging, ease of production, costs of fulfillment - all factors that determine the product economics....
Cheers -
Rob

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Thanks, Robin, for a fairly cogent reply. I like the Coke analogy, which is illustrative except for the fact that instead of one conglomerate selling in different venues, we are comparing here two (quasi-competing) businesses in different venues. Makes it hard to compare, I know.
As I understand it then, would you say that the difference in price (4.7 times) is accounted for by a) wood quality and b) prep work for smaller stock/higher quality items in a non-wood supplier store? Do I have that right?
It's perfectly sensible, even probable given the many things I don't know about preparing stock at that level of marketing--but still surprising. I'm inclined to believe it if you tell me so.
Regards, H

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Hylourgos wrote:

It's as Robin said, LV is not a lumber yard. They primarily sell tools and garden stuff.
The project wood they sell comes in 3"x24" pieces, with thicknesses ranging from 1/8" to 3/4". There is no pine, oak or even cherry. It is all reasonably exotic woods. When you are dealing with pieces of wood that small, nicks and knots, or any other imperfections make a piece unusable, so all of their pieces are completely clear.
As for volume, I don't know how much they keep in the back, but all the pieces they keep on the floor in the store I go to, fit in a cabinet rougly 5'x3'x24". That is for all species. That's pretty low volume, but as Robin pointed out, it is meant as a convenience item for their customers, not a major profit item.
I wouldn't be going to LV to buy enough lumber for a table, but if I just need a little bit of something exotic for an inlay, it's much better than the long drive to the lumber yard where I'll have to buy a piece much bigger than what I really need.
...Mike
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Mike Alexander wrote:

Doh! Forgot the hardware. They also sell hardware. Not like plumbing and such, but rather hard to find hinges and knobs and handles and such.
...Mike
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Makes good sense, Mike. Thanks. Pretty much apples and organges....
H.

Well...I too said that, right above ("in a non-wood supplier store").

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I'm not Rob, but I'll chip in anyway.
Here's the gist of his point: a customer wanting 1 bf of nearly perfect wood can buy it from him at a price that seems shockingly high per bf when compared to quantity suppliers.
Ripped off? No. Consider this: to get the same perfect 1bf piece from a quantity supplier would require purchasing several times that amount -- 4 or 5 bf if you're lucky. Then you've got to join and plane it, sort it, and hope you get the piece you need, or else it's back to the lumber yard.
In short: if you're building 24 linear feet of walnut bookshelves, then don't buy your lumber from Lee Valley. But if you need a premium quality 1x3x24 board of a species you don't have in your wood shed, then buying from LV (or Rockler, or Woodcraft) probably won't cost you more money, and will certainly cost lest time, labor and aggravation than buying in quantity and milling your own in hopes of finding a select piece.
Kevin
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If I understand it right, it's that and more. From a 10bdft board, it's quite possible that only 1/2 of that is good enough to sell to their audience, so the price doubles. Next, add actual milling costs. Next, consider that they have to keep a large variety of sizes of each species, and they do not sell quickly, so there is a lot of cost in just keeping them on the stock (shelf space that could be used for things that move faster, costs of money invested in this stock generating no revenue, etc). Finally, pieces get damaged while they're around, and are lost that way as well.
That's my take at least.
--randy
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To Kevin and Randy both: very clear explanations, thank you.
H.
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You sir, Mr. Lee, are top-notch, in all respects. Please take this in the best spirit I intend, when I say "Your parents did good on you!" :)
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LOL! First you trash a customer, now you trash other merchants. I'd tell you to quit while you're a head, but we're passed that now aren't we...
Matt
snipped-for-privacy@iplogics.com (Rob Pelc) wrote in message

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    Greetings and Salutations.
On 18 Dec 2003 12:13:29 -0800, snipped-for-privacy@canada.com (Matt) wrote:

fine...I am sure that they realize that they are cutting out a chunk of the population that might buy (or has bought) from them.     It always is a bummer when life changes like this...and we have something taken away that we had before. However, there are other sources of wood that still will go with the smaller consumer...so the best thing to do is find them and move on.     Man...from all the testiness in this thread, one would almost think it is the Christmas Season!     Regards     Dave Mundt
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