You hear this often from small- to medium-sized shop owners: "I realize I'm never going to get rich, but I love my work and am very passionate about it. There's nothing else I would rather be doing."
The story from wood dealers is much the same. They wouldn't be in the business if they didn't appreciate the hunt or reveal of beautiful wood. They know they're not going to become wealthy, especially with diminished sales caused by the recent recession.
Woodshop News spoke with six reputable wholesale wood dealers to obtain a status report on the wood business in the United States. Each dealer has at least 20 years experience in the business and several have more than 30. All deal with both domestic and exotic woods. The wholesalers had no shortage of opinions about the issues affecting the industry.
What follows are some of their thoughts and, just maybe, the next time you purchase 500 or 1,000 board feet from a dealer, this story will enlighten you as to some of the issues they face in order to get those special pieces of 4/4 lumber, 8" and wider and 10' and longer that everyone covets.
Rick Hearne, owner of Hearne Hardwoods in Oxford, Pa., has spent years traveling the world in search of wood of all species and the so-called "perfect log." His business could be called a retail and wholesale complex; warehouses are loaded with more than a million board feet of wood and his outside yard is filled with mammoth logs. Rick and his son, Brian, spend much of their time on the road, looking for anything from European brown oak on a British estate to bringing up century-old sinker mahogany logs in Belize.
When it comes to wholesale customers, Hearne says it is best that they specify the reason they want the wood.
"The customer needs to have a design and a budget in mind," Hearne says. "Then it is up to us to communicate. If they are looking for something above and beyond the standard, which usually they are when they come here, then it becomes our responsibility to communicate to them what their options are on the high end as far as figure and bookmatches go.
"Now for the guy who wants to come in and buy 1,000 board feet of cherry, that's not a problem. He can just walk in the door. For the guy who wants to buy 1,000 board feet of cherry and needs 400 board feet book-matched, single-width panels, he should call a day or two ahead to make sure that he doesn't sit here for two hours while somebody operates a forklift."
Almost all of the wholesalers we spoke with had advice for interior designers and architects. Frankly, the message was to do the research and know what you want. Architects, in particular, seem to be a problem area for the dealers we spoke with and Hearne echoed the thoughts of the wholesalers. It simply comes down to a matter of education.
"The difference between the cabinetmaker and the architect or the interior designer is you can show the cabinetmaker a piece of rough walnut and they know what to expect from it," Hearne explains. "When an architect walks in, we have to take a power plane out, kiss it and pour a little alcohol on it ... to show them what to expect the final product to look like, especially if it is one of the big planks or something. If not, they'll just be looking at a big gray board. It definitely takes more time when you're dealing with an architect or an interior designer. We're not trying to kiss their ass, we're just trying to reveal the nature of the product to them and educate them."
Hearne added that when educating customers, there is a greater need to do so when selling exotic woods as opposed to domestic woods.
Net versus gross
Steve Wall has owned Steve Wall Lumber Co. in Mayodan, N.C., for the last 30 years.
"We've developed a good 15 suppliers over the years and each company has its own strength as far as what I consider they are good at doing; whether it might be cypress or Southern pine, or an exotic import company, or what someone specializes in the local domestic market," says Wall. "My goal is to find the better quality for the better price and having done that for a while, you call that guy first and see if he can come up with it."
Wall's method is similar to the other wholesaler dealers, but those that deal in larger quantities buy and sell in net or gross tally. For example, if you buy 1,100 bf gross tally, you are buying green lumber that the drying process may reduce to 1,000 bf. If you buy 1,000 bf net, you get 1,000 bf of dried lumber. As you've probably concluded, you're paying more for net than gross.
"I don't think people are clear on the difference between net and gross buying," says Wall. "That is one thing that I look strongly at when I am buying lumber. Since we are selling to other people beyond professionals, we do it on a net tally, which means you buy 100 board feet, you receive 100 board feet. Now when you buy on a gross tally, like I buy from all my suppliers, let's say I buy 1,000 board feet. We're charged for 1,000 board feet, but we're only getting about 900 board feet because most people [have] what they call a 10 percent shrinkage fee and that's when the gray area comes in because they don't understand why they didn't get their true 1,000 board feet."
"We sell everything net," says Matt Westmoreland of World Timber Corp., a wholesaler in Hubert, N.C. "I can't stand anything gross. There's nothing worse than buying 1,000 board feet of lumber and getting 800 board feet of net. So even if we buy something on the gross, we remeasure it, reconvert it, divide it into the cost and sell it back on the net."
"I think the grading laws have changed so everything has to be a net tally," says Dave Harris of Parkerville Wood Products in Manchester, Conn. "Essentially, the wholesalers who are buying the lumber green and drying it; they're realizing significant shrinkage through the drying process. So they're buying wood one size, they're drying it and it's another size and they absorb that part of it. When they sell to us, it is a net tally. It's supposed to be what it measures when the lumber dries.
"The other issue is when you tell people that buy lumber here that they have to figure a 20 to 25, and in some cases 30 percent, waste factor, that's another adjustment that you have to educate them on."
The perfect customer
The consensus among those interviewed is their favorite customers know what they want, buy on a regular basis and pay on time.
"We like the people who like the price code based on 'off the top,' " says Myles Gilmer, owner of Gilmer Wood Co. in Portland, Ore. "There are different degrees of wholesale and my favorite is the people who want to buy units [a unit is roughly between 600 and 1,000 bf]. They get the best price, especially if they order units frequently or they want a truckload."
"I think what makes any customer good is [my] ability to make a little bit of money on the transaction," Harris says. "I think the real value of your typical commercial account is repeat business. I think all wholesalers have a sense that if you have a wholesale account that is repeat business, it is a relationship that you've worked at building and that essentially affects the pricing over a longer period of time. That compares to a guy that may come in one time to buy 100 board feet of lumber and you don't think he'll ever be back. You may give him a wholesale price, but you may not give him the opportunities of someone who is obviously a contractor that you are trying to win their business long term."
"We do like people who order 1,000 board feet of padauk and will take it as it comes," adds Gilmer. "Typically that would be a Select & Better grade, so the majority of it would be 6" and wider and 8' long, but that also allows for some 4" and 5" widths and some 6' to 8' lengths. If they buy like that, then we will get a pretty good price on it. The perfect customer is the one who regularly or routinely buys and doesn't claim - instead of the person who says I ordered 1,000 board feet and only got 997 or one of those know-it-all people. What a nightmare."
Business is off
Since much of the wholesale business is directly related to the housing industry, sales are down anywhere from 10 to 50 percent. Although the retail business has also dropped, it has not decreased as much as the wholesale.
"The main people we deal with are cabinetmakers from one- or two-man shops up to the big guys who do architectural millwork from a small shop to a large shop," says Jerry Anton, a wholesaler with O'Shea Lumber Co. in Glen Rock, Pa. "Our average order is down to about 1,500 board feet, while the guy who used to buy 1,000 board feet is now just buying 500 board feet."
"The wholesale business is in the toilet," says Gilmer. "Typically, a lot of our wholesale customers who used to order half a truckload or a unit or two at a time, now they want 10 board feet of this and 20 board feet of that. You still have to give them a discount. You have to do something to keep things moving around."
So if anyone thought wholesalers were living the life of the rich and famous, think again. Just as with any type of business dealing with wood right now, times are tough.
"The way to phrase it all is the smaller the order, the bigger the problem," says Westmoreland. "It really is."
This article originally appeared in the May 2010 issue.