A better pellet experience

The bag is important to the first time buyer. I foolishly bought infernos over Greene Teams for my first purchase based solely on the bag.

That being said I think there there are generally three groups of people that buy things.
Those that shop bases on lowest price.
Those that like the art of shopping and try to find the best quality to price ratio.
And those that buy the most expensive thinking they are getting the best.
They key is to find out which of these groups you want to sell to. Then there is what Greene Team is doing. Going after all three groups with their different bags filled with the same pellets. But one would think that the quality is different bag to bag or price point to price point. Very smart on their part.

smwilliamson said:

To widen the topic, I know a lot of you have space constrictions for storage...how about if the pellet compnay could deliver a POD with 2 tons inside and drop it someplace where you want it. No lugging and stacking and no rearranging the garage or cellar to accommodate the space.

I'm really just trying to think outside of the box here...pellet manufacturers....are you reading this?

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I like the POD idea!

Scott, I got a message from mr warm, Just passing it on.

Okay here I am. Regarding Scott's post I have to take exception to some things he says…. price price price seems to be the major driving force for most people in the market today. Quality certainly plays a part and that's what we are trying to excel with, but IMHO having kids artwork on a bag or having special colors, paper bags, a burlap bag or some special plastic resin unless it really were to drop the price, (which it won't) I don't think most manufactures would truly be interested. The vast majority of manufacturers deal in bulk product not the home market so it's all about unit price. The larger mills in Canada and certain in the US South East are all selling their pellets to Europe or overseas simply because that market will take volume, 12 months a year and they know they are paid before it leaves the dock. You need less people and equipment in your mill to produce a salable product and most will leave the mill almost as soon as it is made and cools enough. That is where the huge growth in the industry is, not the home market….the next tens years will see massive growth, but to the utility companies of Europe and SE Asia, not so much in New England…..I don't think Joe public really understands this

If Scott wants his own branded pellet we would be more than happy to sell him…. but it comes in 5-10,000 ton lots and you pay for it upfront along with all the bagging/pallet/cover costs…..we don't want somebody else's bag with our pellets in them unless they are paid for first….Or he could spend a couple of million dollars and always start his own plant….that is an option as well

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So yes some of the pellet people are reading this. Many more than we'll ever know stop in and see what were chattin about. Pretty sure NEWP,GAP and MWP take peeks at this forum from time to time.

Being relatively new here I don't know who Mr. Warm is, but he makes some valid points. Along those same lines, I stopped at a small stove shop in rural Maine last week. The owner told me he heard that Corinth has stopped bagging pellets and is exporting all of their product.

well, if youre a pellet producer, and you can sell ALL of your product, paid AHEAD of time, in BULK, and make more money doing it than by selling it domestically, do you really blame them? I dont think people can appreciate how much product is sold in the bulk channel to overseas markets, and those markets are growing, every year. The "bagged" market is a small percentage of sales, and requires a large percentage of infrastructure that the bulk market does not. Overseas bulk is less work, less risk, and more profitable. No brainer.....

I dont think anyone here questions Scott's knowledge of pellet stoves, their maintenance, cleaning, technology, or operation. This guy knows his stuff! Because his business is a skilled business, I am guessing that he does not have to deal with bottom-feeders much (price is the #1 issue for these folks).....when you hire Scott, you know if your unit is fixable, he will fix it, so you are willing to pay what he asks for the work to be done. Now, what if you could go into a store, walk up to a shelf, and buy a packaged Scott to fix your unit? (I know, this is nuts, but bear with me), and this over-the-shelf Scott was, say, $50 cheaper than the "old" Scott? Yep, most folks are gonna buy over-the-shelf Scott. Until you have to deal with this, I dont really think you can readily understand it. Scott is a more akin to a craftsman, where you are buying expertise, rather than a packaged product that is the same wherever you buy it (brand vs brand).

Price, quality, and service. I think we all agree, those are the three things ALL consumers look for. Unfortunately, noone can offer all three for any amount of time and stay in business. Two is the best you can do. And this choice is what EVERY business needs to make at some point. From what I read of Scott, he offers service and quality. Will he drop his price because Joe Schmoe Stove Fixin' Service is willing to work for less? I doubt it. It is a neverending spiral, and in the wrong direction- downward. Tractor Supply, what do they offer? I think price and quality, like many of the Big Boxes......they might say they offer service, but do they really? DO they know how to fix the units they sell? No. Will they fix the units they sell? No. If you think them giving you the 800 number for the stove company is service, then you dont know what service is. I wonder how many of these units Scott works on? I know we do, and it can be quite appreciable.

Due to the economy, I believe that the percentage of folks who shop price BY FAR outweighs the folks who shop quality and service. There are always those people who will buy quality, or even service, but I submit that those numbers are dwarfed by the price shoppers. So, the majority of retailers go that route. This isnt to say that once and awhile you cant get a deal from a retailer running out for the season, or someone selling their stash, but thats rare...very rare, an abberation that most folks dont or cant take advantage of.

So, when people come up with ideas, and some of them good, they tend to cost money, thereby adding to the cost of the pellet. Ths inflates the pellet price, causing the bagged product to be even more expensive, so, its understandeable that there isnt much interest in anything which raises the price of pellets. As I said before, the PFI certification, some 6th grader from Kehoken, Wisconsin's artwork on the bag, eh, I dont care about it. All foof. Maybe that 6th graders' parents might buy the bags, or his relatives, but, everyone else? no...I dont think so.

Could also be I am too small-minded to appreciate some of the ideas, so, my bad there!

smwilliamson said:

Lowering a price as an incentive for a consumer to buy just means that you have not justified the enough value in other aspects of the sale. Two is the best you can hope for? Not true. I get people that call in and ask what my price is for this or that adn then I never hear anything back from them. Most of my customers never ask how much anything is until they are flipping out the check book. I do not charge more than market price for anything. I do my homework and find out what market price is and I stay there. I don't take advantage up or down. I freely communicate all of my pricing on the website...price is really not that much of the overall sale as many people think it is. Sure, it's important, but if people are forever asking you what your prices are for this or that or they give you push back when you tell them the price, I would argue that you have not done a very good job of marketing yourself, your quality or your service...when you do it well, people do not worry about pricing so very much.

I like the off-the-shelf-scott concept...where can I get one of those? *with Bowie like hair please...

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"two is the best you can hope for"...yea, maybe poorly worded....how about "two is the best you can get"? You can always HOPE for more! There is no "market pricing" for service work though.....it varies fairly widely depending upon who is doing the work and how they value their time.
I cannot agree though, that pricing is not really that much over the overall sale, but will agree that depending upon what you are selling, the importance of the pricing may be quite different. Sell a commodity, pricing is NUMBER ONE, hands down. Sell a product such as fixing a stove, well, its a skill, so pricing varies, unless you are willing to allow that your work is exactly like Three Stooges Stove Fixers.....no better, no worse.....c'mon, you arent going to allow that are you? I see many posts here about bad tech's and their lack of knowledge...you arent one of those, and frankly, your work is worth more. I also sell pellets, and maybe other pellet guys can chime in here, but trust me, price is by far and away the largest determining factor with people's pellet purchases. Maybe we disagree about the mercenarial nature of the general public.....me thinking its worse than you?

as for Bowie hair, how about Lenny Kravitz.....wow, that guy has some good hair!

smwilliamson said:

Finding market price isn't hard, call 10 service providers in your area and take and average after taking out the highest and the lowest prices.

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if you can have a market price for service work....like I said above, I dont think you can....

smwilliamson said:

AH just reread it...price price price seems to be the issue driving sales in NE because no one is doing anything to justify paying more. People pay more for a softwood because there are benefits...so that drives up the price. Now, if the pellet mills were actually located with spitting distance to the end user, perhaps that could lower the price.

When you look at it...people will go crazy to save .20 cents or so per gallon of gas (5.5% of total) but if you offer 10% off a ton of pellets...twice the discount, nobody cares....they want 30% off. Perhaps sellers of pellet fuel ought to price the product by the bag instead of by the ton and then offer 5% off.

Then again, there should also be a conversation about keeping a client base loyal. Good pelelts do it. Lousy pellets don't. Price doesn't do it either. If I were to sell pellets, price and profit per ton is actually a relatively low priority of why I would want to get into it in the first place. Because I offer service (and very good service at that!) the fuel and service now become a twofer and compliment each's value and therefore allow me to charge more for both...

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Interesting, but not true in all cases. I can save 15-20 cents a gallon of gas at times if I travel to Newmarket, NH, about 25-35 minutes away from my regular driving areas, but time is money too; so I dont do that, its just not worth it. By the way, I drive quite a bit. As much as possible, I use the General Store in my town over the 3 Irving stations that I pass to and from work. Why? I see the face of the owner at the GS who does not play games with prices. His prices change when he gets a delivery and not daily (or even multiple times a day) going along with the days oil fluctuation. He is sometimes up to 9 cents cents more and sometimes up to 9 cents cheaper but overall he is usually within a few pennies AND right here; in and serving my community. He works the store daily and works his butt off. That deserves some loyalty.

Regarding brand loyalty, that went away with today's corporate mentality of money first and quality second. Again, I am loyal to a local pellet house and have been since my 2nd year of burning. That house may be 45 minutes from me, but he carries all aspects of the product, has fair pricing and most of all he lets us know what works in HIS stoves heating his home and workplace and what doesnt. He is not a stove dealer. Most of all he stands behind the product he sells. If there is an issue, he will make it right. This isnt to say that I wont buy a small amount here and there elsewhere to try out, but my bulk purchase has been from one place 3 years running. Could I have found a better price and saved 10 bucks, maybe, but local relationships, good communication, quality product and good customer service are worth it for me. I can and do talk with him on trying to get other brands I may like. He does what he can, but it is not always doable.

Mr Warm's Price Price Price comment is important as I have not had a pay raise in 7 years, but balancing price, quality and service is the real key for me. As long as I can find a way to afford it, this wont change.

Just my 2 pennies on this subject.

I have been seeing some things from the pellet dealers that are encouraging. One is multi-ton discounts and the other is group delivery if you and you neighbors order together. Gimmicks? Maybe but if its increasing sales while saving folks some money. Sounds like a win-win to me.

LW, I don't think any of us boxstore users expect more than price savings. Even the quality can be iffy(specially with pellets), We need to know what were buying upfront! Service is pretty much non existent.

jtakeman said:

I have been seeing some things from the pellet dealers that are encouraging. One is multi-ton discounts and the other is group delivery if you and you neighbors order together. Gimmicks? Maybe but if its increasing sales while saving folks some money. Sounds like a win-win to me.

LW, I don't think any of us boxstore users expect more than price savings. Even the quality can be iffy(specially with pellets), We need to know what were buying upfront! Service is pretty much non existent.

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right, so we do agree.....you can get quality at the big boxes (well, sometimes), and you can get price, so, out of the 3, its service they dont do. the million dollar question is, how much will people pay for service?!

I care more about what is IN the bag, rather than what is on it

Lousyweather said:

right, so we do agree.....you can get quality at the big boxes (well, sometimes), and you can get price, so, out of the 3, its service they dont do. the million dollar question is, how much will people pay for service?!

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I do my own service(both with my stove and my pellet hauling/restacking) So I'm the wrong person to ask. But for the crowd that has difficulty doing it themselves and wants to burn? Yeah, I'm sure it adds value and people will pay more for goods with better service. I'd say use SIB's in jay Maine as an example. Not only do they deliver your pellets, they also restack them for you. It may not add value to the pellets, But I bet it increases sales by doing so. So the same should apply to stoves for some. And when in dire need, Service would be at its premium.

smwilliamson said:

The thrill of the hunt, the same reasons yard sales are so popular

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Excellent thread, thanks so much for asking - pellet vendors usually dont ask to begin with....

Me personally, I would love not to hunt and have to try many bags just to find Mr Right, so one of the things we would really need is a standard (a real one). Currently the quality of pellets vary widely (my personal scale is Instant Heat to Barefoots) at costs of 150 USD to 350 USD (geography, seasons, brands).

For a commodity product thats supposed to heat my house, thats a lot of price difference per ton - in fact unacceptably high given the market you are in.

Discussion forums like these are designed to break up information barriers that ultimately cause this redicoulus braod range of qualit and price. Go Team....

You have a valid point, the hunt is part of the fun and for sure what we truely do is trying to find the somewhat cheaper pellet that gives us the most bang for the buck....until one gets tired of it and sticks with the brand that worked great at one point ...until we leave that brand because they crank up the price to unacceptable levels because they 'added value' or the 'market demanded it' or some other nonesense that hard to believe and difficult to proove.

I am glad you are asking what people would like to see to make the whole thing easier. Well, here are some thoughts - and since I am working in a different industry you get the ideas for free :

- tear down the local market barrier: Pellets are heavy and so transportation is expensive causing local markets that inhibit true competition on a larger scale. Eg, I cant get Oakies in my area other than for prohibitive transport costs. Sure I can buy a truckload on the internet, but 15-24 tons is just a bit too much for me to store. I love your PODs idea - imagine US wide POD shipping of any pellet flavor you want to any location within the lower 48....you will piss of all the local dealer, you have flattened the market and true competition will weed out the crap pellets and cause mighty more business for the good guys....ooops, they might not be up to the demand...darn

- pellet bags: I personally dont care as long as they dont stink like chemical, I have never had water issues with my pellets so sealed pellets are no extra value for me. Recyclable bags would earn you extra points since greener, bags useful for something or composting would be even better. Having a kid paint the outside is fine, if you make it a school competition and draw a winner with a price it gets you extra points for community active....but by and large I dont care too much

- I have a big garage and can easily store my 6 tons of pellets, in fact storing in bags is easy, felxible, clean - easy and clean to carry into the house, through in teh hopper ect - I have zero need for bulk delivery and or single pellets. bags can be stacked up high along a wall - if anything bags are the preferred storage for me

- ANother thing that truely sucks IMO is the difference in delivery cost. Not only do I have to price shop for the pellets, no I need to price shop for the delivery service as well, in my area they even have different models (initial delivery, how many tons, stacking fee, basement fee vs ground level ect). I can end up paying 150 USD for a delivery or choose my own delivery guy who does it for 60...so that part of the pellet business sucks as well - I have to control way too many parameters to get to my pellets at a satisfactory price. Imagine a web site where you fill out a form and the next day a truck shows up with 5 guys asking you where to put them and the price was all included in the per ton price...I would like that...brings me back to your PODS idea.

- POD...love it the more I think about it, only caveat, I would need to drop the POD somehwere and it would be outside to get at in Winter, but I could self unload if I feel like it....you are on to something there...

- I am not so good at thinking outside the box, so lets start with peoples motivation for pellet stoves....well its simple: safe money heating the house. Yes there is also some environmental aspect and some remnant of a fire/cozy feel - but the majority is safe money. SO any marketing effort arguing to shell out more money is an uphill batlle. Maximum warmth for minimum money is the motivation....hard to innovate around this other than making top pellet at lowest price possible.

- I would love to see a bamboo based pellet, sustainable wood source with minimal environmental impact (grass is OK too, but did not seem to work well from what I saw) - I would be willing to pay extra for that (if grown in US that is).

- asking your customer would be a simple start. I am not on any companies email list (never got asked for), people love getting asked their opinion, makes them feel good (look at all the amazon reviews out there !)

- cut the middle man, why do we need local pellet distributors if you could drop ship to me directly (saves money). Well its the bagging handling thats in the way...need to find a way around AND the shipping cost for small units...

- make drop ships with a 22 ton truck and offer residential delivery....with different flavors to choose from...and no minimum order....would be a start.

- generate a label on th ebag thats really informative and adheres to standards (makes it comparable and the competition has to live up to your standard !), dont give 20 % range in BTU thats not helpul.

- generate loyal followers: dont raise the price 100 % over three years just because you can...that is as bad as making a terrible pellet and will burn your name

- dont generate a new brand name becasue the last one is burned due to bad quality and its box store distribution, make a solid quality product and stick to it, make consistant pellets - no customer wants to gamble 6 tons of winter warmth based on bad reputation

Wow, this is getting to lengthy already, anyway, loved your posting and this thread, maybe some people will think about pellets as a product a bit more. If anyone needs a product manager let me know...just kidding

Lousyweather said:

right, so we do agree.....you can get quality at the big boxes (well, sometimes), and you can get price, so, out of the 3, its service they dont do. the million dollar question is, how much will people pay for service?!

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jtakeman said:

I do my own service(both with my stove and my pellet hauling/restacking) So I'm the wrong person to ask. But for the crowd that has difficulty doing it themselves and wants to burn? Yeah, I'm sure it adds value and people will pay more for goods with better service. I'd say use SIB's in jay Maine as an example. Not only do they deliver your pellets, they also restack them for you. It may not add value to the pellets, But I bet it increases sales by doing so. So the same should apply to stoves for some. And when in dire need, Service would be at its premium.

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Service is a broad word and has many aspects. As an Operations Manager for a small sales/service company I have to know that to be successful (for me, our customers and the company). In part, It involves balancing what help can be given over the phone (help the customer) and where to draw the line for a billable service call (me and the company).

For me the service on pellets is in communication and knowledge. Yes I do have the 4-5 ton bulk buy delivered, for 45 bucks it is not worth the wear and tear on my vehicle (half ton rated but can do a ton per trip), my back, and my time.

I will be 50 next April and have gone from the stubborn bulldog to knowing limits. As long as the delivery charge is not outrageous, I'm OK with that. I do still have to lug the 4-5 tons from the garage to basement but that can be done at my leisure between July and November: usually happens in 1 or 2 afternoons in October-November . Heck last year I left a ton in the garage and brought those in directly to the stove during the shoulder season.

I do all the work on my own stove, so that service has not been needed. This carries to other areas in my life. I have not been a professional auto mechanic for 20 years but still have all of my tools.These days I no longer will pull a transmission in the driveway to do a clutch, I wont do any exhaust work without a lift and torch. I will research an issue and attempt a repair if within my limits. Oil change, tune up, brakes are a no brainer for me, so those I do easily myself. The key is knowing limits and haveing a trustworthy, capable mechanic when I need it and that charges fairly.

How much people want to pay for service can be a wide margin, especially to those who dont realize that the charge for service includes training and experience, not just time spent.

So, service is an area that has alot of meaning around it.

gbreda, LOL.

Wait a few more years. I've got a few on you and I draw the line at working fast or in the summer sun or up high off a ladder.

Mr. Takeman has a good handle on what is a decent service provided by Steve at SIB. The only thing is I can't see is having him or his crew do all of the pellet re stacking.

My feelings on servicing the stove falls along the lines of if you have the few needed tools and something in the way of common sense there should be no problem doing that work yourself if you have the time.

Otherwise, make certain you don't hire a Carl.

dang! who is this "Carl"?!

Carl is the mythical stove installation and service guy that hasn't a clue and usually his customers have to have someone else service their stoves because of his mistakes.

ah, Thanks, Smokes......Im guessing that Carl has already been paid after he "fixed" the stove too, right? Prior to the next person having to come out and unfix Carl's fixes?

You've got it.