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Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by mepellet, Mar 29, 2013.

  1. movemaine

    movemaine Feeling the Heat

    Joined:
    Nov 28, 2011
    Messages:
    477
    Loc:
    Central Maine
    I didn't have a great experience with SIB this last season, and had to start looking elsewhere for deals. They were experience stock issues, and I was continually told my order would be coming in the next 1-2 weeks and it never came.

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  2. CT Pellet

    CT Pellet Minister of Fire

    Joined:
    Dec 1, 2012
    Messages:
    668
    Loc:
    Torrington, CT
    to SIB....
    When I first started my business, I lost money for my first two seasons....literally LOST MONEY. Like you, I shaved my margins and offered free delivery in hopes of winning over a good number of loyal customers who would be in it for the long haul. I would buy tractor trailers of wood pellets, one at a time, have them dropped off in my driveway, and when it came time to deliver, I would load up my pick-up truck bag-by-bag and deliver the ton to the customer bag-by-bag all for zero margin. I sold them for the same price that I paid for them. I did this so that I could learn the business and develop a customer base. Now...fastforward to my third season, I needed to make money. I had no choice but to raise my prices because I could not afford to sell at cost like I had been. I also had to charge extra for delivery because it was expensive to deliver and EVERYONE else that I was competing against was charging for delivery as well. In doing so, I was able to retain a good majority of customers who loved our personalized service. They were happy to see my business grow and appreciated the fact that I filled a void where they used to struggle to find good wood pellets. Sure, there were a few guys who pissed and moaned because my prices went up. Some of them griped and said they were going to shop elsewhere and others warned me that by raising my prices, I would lose all of my customers. I will admit that I did lose some. But most peoples warnings came as a result of trying to meet their own personal needs, not friendly advice that had my best interest at heart... That's all. When selling at a loss, you will never be able to make up for it in volume. Do not fear those that tell you that you won't sell as many tons this season.....so what. It is better to sell 10 tons and make $40 per ton than it is to sell 1000 tons and lose $1 per ton. Keep your chin up, cater to those customers who show you loyalty and just politely smile and disregard those nay-sayers who do not truly know your business as well as you do. This is what I did and eight years later, I am one of the largest wood pellet dealers in New England. Retail is a tough business and while most customers are awesome and many become good friends, there will always be a small handfull who feel entitled to call your shots. Good luck my friend.
    Scott
    Lousyweather and moey like this.
  3. Don2222

    Don2222 Minister of Fire

    Joined:
    Feb 1, 2010
    Messages:
    7,029
    Loc:
    Salem NH
    Good work CT, you deserve it! I am in a similar situation and am working harder and longer to provide better service. I hope to do better next year too.

    Just last week, I had a customer who said she never saw anyone work so hard on servicing her old pellet stove and made me some lunch before I went to my next service call. She was glad I am authorized service for that brand now and can get support and any parts she will ever need. She was also very pleased that I am a dealer of cleaning supplies and purchased a cleaner - brush kit I sell and a surge protector!
    Lousyweather likes this.
  4. Lousyweather

    Lousyweather Guest

    well, the customer IS always right, aren't they? ==c

    kinda the same story here. We used to hand unload our pellets into the customers' garage, their cellar, walk them down to the shed, etc., and we used to do it for free. So, send out maybe 3-4 tons on the back of a truck, 2 guys to hump the pellets to wherever they needed to go. In those days, when there was less competition, we would GROSS about 50 bucks a ton or so. Depending on where the pellets were going, a couple guys could do a few deliveries per day. If you sit down and math all that out, it really didn't pay to do it. Folks complain about carrying pellets into their cellar.....well, try doing that for 2,3, or 4 customers per day, 5 days a week. yep. So, we bought a truck and forklift......pretty big chunk of change with the equipment, repairs, driver, insurance, Heavy Highway Use taxes, IFTA taxes, etc. But in doing so, now a single man can deliver 28 tons per day (of course he isn't hand unloading anymore). If the driver is motivated, the record for delivery is 52 tons per day, but that's with planets aligning, and everything going right. I challenge anyone to unload by hand that volume in a day. So, things evolve.

    Even though sales is a two way street, its usually not seen as such. That's where the customer is always right comes from. Of course the customer cannot dictate everything, particularly where service or price is concerned. We, as independent retailers cant beat everyone else's price, because that only makes you as stupid as your stupidest competition. I've never heard anything bad about CT Pellet, their prices or their service.....and this is in a world where folks are want to tell everyone they can about a perceived slight by any retailer. I can only assume you are doing something right.

    Folks are always looking for the lowest figure, the best service they can. I know I do. Your job as a retailer is to sell at the fairest figure you can, priced to remain competitive, offer service to best benefit your customers, but also to price to afford you a reasonable profit to provide you a good level of living. It really doesn't benefit you to not make money, work like a dog every day, and still have to worry about how you're going to put food on the table and shoes on your kids' feet. If you are busting your butt, and have nothing to show at the end of the year, well, maybe you ought to go to work for the RMV, where service is the utmost concern of the folks who work there.....
  5. slls

    slls Minister of Fire

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    Loc:
    central maine Lat 45
    Got it now, my link went bad.
  6. save$

    save$ Minister of Fire

    Joined:
    Sep 22, 2008
    Messages:
    1,906
    Loc:
    Chelsea Maine
    I also liked getting pellet 's from SIB, but last year I got them MWP from HD for $168 ton delivered. I did get two tons of softies but hard to say they are way better. Price point rules.
  7. Lousyweather

    Lousyweather Guest

    yep, save$, price is one of the big 3!
    a. price
    b. service
    c. quality

    put them in the order you like, but no retailer can offer all 3.....2 is the best you'll find.
  8. save$

    save$ Minister of Fire

    Joined:
    Sep 22, 2008
    Messages:
    1,906
    Loc:
    Chelsea Maine
    Well, I don't follow "no retailer can offer all three". But indeed they can and did. I got the best price. Service, free delivery, quality, the same pellet. I bought three tons and saved enough money to cover the cost of a 4th had I wanted them.
    There are several retailers around here that try there hardest to offer all three. Each one of those points often is a matter of perception for the consumer. What one thinks of as good may be another's "I'll never go back there again". When I get what I wanted, when I wanted it, and it held up to my expectations, I am happy with my exchange.
  9. ScotL

    ScotL Feeling the Heat

    Joined:
    Feb 7, 2011
    Messages:
    297
    Loc:
    Central Maine
    From a manufacturing standpoint the order is:

    1. Quality
    2. Service
    3. Price

    The best price isn't any good if you can't get the product when you need it (service).
    The better price also isn't really a better price if the quality is poor because that will affect your end product.
    If the quality isn't good enough, the best service in the world isn't much good to you.

    Right now, my best quality bag vendor is giving me the lowest service (bags aren't ready when I need them and I'd run out if I didn't have multiple vendors) and my 2nd best quality vendor is #1 for service (they hold film in their own warehouse for when I need it). They both fluctuate on price and either one could be the best price at any time. The only real difference in their quality is with one of them I have to run teflon guides in the bagger or it will occasionally jam up and the other I don't.

    So, my #1 vendor is the one that provides the best service - keeps me from running out. To me, that makes it worth using teflon guides that wear out and have to be replaced more often. The price they always compete on and can often match competitors so out of the 3, that comes in 3rd.

    Which means in this example that the order is really:

    1. Service
    2. Quality
    3. Price

    because the difference in quality is alleviated by changes to the machinery so it's not an issue. A major difference in quality though would be an issue.
  10. Lousyweather

    Lousyweather Guest

    for sure, perception is reality!
  11. hossthehermit

    hossthehermit Minister of Fire

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    2,166
    Loc:
    Maine, ayuh, by gorry
    SIB called today, left message, said MWP softwood are in, I called back and left message .......... no word on price, if I hear back I'll pass it along .........
    jtakeman likes this.
  12. mepellet

    mepellet Minister of Fire

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    Central ME
    Called and they said $259/ton plus delivery charge. Delivery is not per ton. It is per delivery. Their site says that they are expecting their first delivery next week.
  13. hossthehermit

    hossthehermit Minister of Fire

    Joined:
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    $259 for the softwood?????
  14. mepellet

    mepellet Minister of Fire

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    Central ME
    Yup. $259/ton for the mwp 100% softwood. Went up $24/ton this year and added the delivery charge.
  15. pelletdude

    pelletdude Feeling the Heat

    Joined:
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    Loc:
    Eastern Conn
    Awesome Scott!!
  16. moey

    moey Minister of Fire

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    Southern Maine
    you guys are way to hard on this dude
  17. slls

    slls Minister of Fire

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    Softies $54 a ton more than last year, wellllllllllll?????
  18. Lousyweather

    Lousyweather Guest

    prices are up?
  19. mepellet

    mepellet Minister of Fire

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    20.8% price increase over last year if buying one ton.
  20. smwilliamson

    smwilliamson Minister of Fire

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    Southcoast, MA
    I just get such a kick out of you folks hemmin' and hawin' about the slightest price increase about anything.....:) He raised his prices $54 !!! You mean he isn't gonna sell below cost and provide free delivery anymore? Gosh dang it...
    Lousyweather and moey like this.
  21. mepellet

    mepellet Minister of Fire

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    Central ME
    Is anyone else seeing a 20% price increase on MWP 100% softwood? Not trying to be a wise guy, just curious. I think 20% over one year is more than a slight price increase. I’d be surprised if I was the only one who felt that way. It’s not going to cause me to go broke or anything but saving money was why I got into burning pellets in the first place so I pay close attention to prices….
  22. smwilliamson

    smwilliamson Minister of Fire

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    Southcoast, MA
    Seeing bulk prices go up or down $20 or $30 doesn't surprise me in the slightest, especially since the profit by the ton is somewhat next to nothing anyway..... Sill do not know why the industry wants to price these things out by the ton....by the bag would make more sense. We don't shop around for Fuel oil by the full tank do we?
  23. moey

    moey Minister of Fire

    Joined:
    Jul 12, 2012
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    803
    Loc:
    Southern Maine
    It really sounds like this person SIB's did not make any money and is adjusting his prices accordingly. The MWP blend last year was $210 at most places around me so seeing $259 for softwood MWP does not seem that crazy just trying to recoup last years loses I suspect.
  24. slls

    slls Minister of Fire

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    He buys direct, no middle man. The high price softies from Canada, gives the middle man huge profits.
  25. slls

    slls Minister of Fire

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    Wood pellets are being priced too high to save on heating.

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