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Pellet Price Gouging

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by aweya, Jul 16, 2008.

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  1. aweya

    aweya New Member

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    Loc:
    South Shore, MA
    I ordered and "paid" for 26 tons of New England hardwood pellets from a local vendor back on May 16, 2008 for $215/ton delivered. Myself and two friends pitched in for the purchase and New England Wood Pellets were supposed to deliver them direct to my business the first week in June. Well, its July 16th and they are still not here. I called the vendor several times and also New England Wood Pellets themselves. I was told by NEWP (Allison) that they have no idea (can you imagine?) when I will be receiving them. All I was told is "possibly" in November. Well run business, eh? I was then told by the vendor that Pelletsales.com bought out NEWP and they are holding stock until the fall when pellets are supposedly going to be sold for $300+ per ton. I was also told that NEWP has over 200,000 tons of pellets in stock. I dont know how true this is because right now its just hearsay but its making sense in my particular case. I was wondering if anyone else had any information about the buyout or if they had issues getting large quantities of pellets. This is no different than the oil companies greed. I am beside myself right now. If this is true, I will never buy from pelletsales.com or NEWP ever again and will go out of my way to discourage others from dealing with these whores. Lets stick together in here because I think we're going to get porked by these greedy businesses.

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  2. Mom2Czars

    Mom2Czars New Member

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    Jul 10, 2008
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    southernNH
    Well, I haven't finalized the purchase yet, but pelletsales is quoting me 279/ton plus delivery and I'm close to their location. They're quoting July/August delivery at this time and their pellets are not NEWP pellets. Their LG Granules from Quebec at this time. I'm also not buying years' worth of pellets at once.
  3. webbie

    webbie Seasoned Moderator Staff Member

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    Western Mass.
    Not much one can do not to get "porked" if pork is on the menu......

    In a market like this, a person would have to be a fool to take less than they can get for their inventory. That said, if they made a sale and a promise to you they should keep it. Honestly, I think it is presumptuous for you to blame ps or newp - for this reason - you "bought from a local vendor". Any info past that local vendor is hearsay.....none of those companies contracted directly with you, so they own you nothing....not even the original order. It is the local vendor who has the beef with them....my opinion, anyway.

    Local vendors often have problems with late deliveries and such things. That is one risk you run by not just picking up a couple tons in stock. Not making excuses for anyone here, just stating some of the obvious.

    PS buying out NEWP sounds suspect......PS is a tiny business compared to NEWP. NEWP is owned by a number of investors. Yes, the two companies have and have had a relationship, but unless I had it from a Press Release or the horses mouth I would not put much faith in that rumor.

    BTW, similar situations are responsible for the oil price rise. Inventories are short BECAUSE refiners refuse to buy decent stocks of oil at the high prices. Tankers full of oil are sitting and waiting for higher prices.

    After all is said and done, pellets are a "market" and will respond exactly as other commodities do - when someone bids up the price (is willing to pay more), that is where the pellets will go.

    Did you leave a deposit and get a contract of any sort?
  4. aweya

    aweya New Member

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    Loc:
    South Shore, MA
    Craig,

    I own a business so I disagree with holding out for the highest price. If that were the case I wouldnt be in business very long. Word of mouth travels fast, reputation is everything. I dont need to be admonished for planning well in advance.

    I paid for the pellets up front and was never told I wouldnt receive them it was just they didnt know when. Possibly in November is a far cry from the first week in June. You pay for something, get promised a date you will receive it and its gets received when promised. Its a very simple concept this business thing.
  5. Dougsey

    Dougsey Feeling the Heat

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    Loc:
    Epping, NH
    I just had my 4 tons of NEWP's delivered this week by my local stove shop so I'm not buying into this PS buying out NEWP story.
  6. timss13

    timss13 Member

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    Jun 6, 2008
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    Loc:
    Peterborough, NH
    No chance PS is buying out NEWP. They don't have the capital or investors and NEWP is in high growth mode with great investors and increased production capacity. NEWP might be considering a merger with a like company or acquisition but they will not be acquired by a smaller reseller of their product. I agree with Craig- your beef is with your local supplier. Go find someone else who has product on hand and will deliver and then get your money back from your supplier.
  7. jsvo

    jsvo Member

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    vt
    sounds like a problem with your dealer. most pellet places have pellets,but have trouble getting delivered.
  8. hoverfly

    hoverfly Minister of Fire

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    Southern NH
    People buying large amounts now may not translate in to such sales during the winter, also stores like Lowe's and Home Depot could under mine them in price from imports form Canada. Right now I have not been able to buy any so when the time comes as long it's cheaper than oil by 40 to 50% I will still buy them, if not I will just wait and burn what oil I have.
  9. webbie

    webbie Seasoned Moderator Staff Member

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    Western Mass.
    I agree, and that is why I think you should get what you pay for and something in the time frame promised.

    My comment on "market price" pertains to those which they did not promise to people at lower prices. I understand about reputation, etc....but if you go to trade in your car or sell your home, you are usually going to do so for the highest price, all else being equal. Being as it could be many years before the pellet market is saturated...and being as they have invested many 10's of millions of dollars in capital equipment, they are going to do what is right for them and the investors (whatever that is)...

    My main point here is that your beef sounds to be mostly with the dealer if he is the one who took your money and made the promises. If not (if you contracted with NEWP or PS.com), then the situation is obviously different.

    I was in the stove sales business for 20+ years, and unfortunately never had a situation (like today) where demand exceeded supply, so we always had to present the lowest price and best service available....I guess that was good training!
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