Will economic woes help or hurt the hearth industry?

[carlo]

Too many businesses these days. Too many restaraunts, nail salons, carpenters, doctors, oil companies, etc. Too much overcapacity. This is what FED policy of low interest rates has done to this country for the last 20 years. Instead of letting the market dictate real interest rates, we had Greenspan and Bernanke thinking they were our gods. They waved their magic finger when the country was teetering on recession and fixed the problem with lower interest rates every time. They also allowed mad crazy lending standards to be allowed under the guise of securitization. What a joke. Well now from these crazy policies we have overcapacity up the ying yang and asset prices that are way overvalued. What happened to the days of recessions when excess in the economy was wrung out ? I guess we thought we were smarter than "the market", or at least Greenspan and Bernake thought they were.

It looks like this crazy spending spree we've embarked on has failed miserably in restarting the economy. The quickie recessions of 1987 and 2001 did nothing to fix the excesses that were in the economy. As the markets sold off during these periods I guess our leaders felt the pain too severe for some, so the decision was made to spend our way out of the recessions. And magically .... it worked ! ...... but all we were really doing was kicking the can down the road. Now the can is filled with cement and we're still trying to kick it ........ unbelievable !

I believe we are facing a deflation like we experienced during the Great Depression. ALL ASSET CLASSES will drop big IMO. But I do believe that the energy sector as well as the food sector will rebound strong after the initial overcapacity is wrung out of the economy. Those sectors will have pricing power as their commodity will always be in demand and they will have less competition keeping prices down. I believe the stove business will be a good business in this environment as competition to the big energy company. There is also no doubt in my mind that Uncle Sam will be taxing the heck out of energy which is even more of a feather in the cap of the stove business.

Don't get me wrong here .... I'm not saying the stove biz is gonna directly compete with the energy companies ...lol. But they will offer many people an alternative to a very pricey commodity that people will need. I see cheap stoves selling real well when TSHTF. I'm a retired finance guy looking to get into the food service business, but the idea has crossed my mind about getting into the stove biz. But when I read this forum I realize how totally ignorant I am compared to so many out there. I'll stick to what I think I'll be good at and enjoy at the same time.

 

[stoveguy2esw]

Rocky, do you have any evidence that wood burning could be banned in the next 4 years? That just seems absurd. Here in Pennsylvania, some people must burn all there trash on certain days of the week becuase there is no pick-up outside of the cities/towns. At least burning wood is a renewable source of energy - unlike coal or oil.

No, he doesn't. It's a silly paranoid fantasy that gets repeated around here every once in a while. The amount of pollution emitted in the course of getting those heating oil deliveries to the tank in your basement certainly exceeds the amount emitted by a modern stove. It's nonsense.

I can imagine a movement towards stricter rules about actual smoke that would affect only pre-epa burners, some of those horrible older wood-burning furnaces, etc., but only here and there on a community-by-community basis, and it will rarely be enforced. We aren't going to be seeing the Stove Police in our neighborhoods anytime soon.

This is how it will start.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/01/BA3313SCRV.DTL

gawd do ya think Bohdi wrote that ? so they fire up the central heat and burn fossil fuel, guess the power plant aint upwind of SF

 

[stoveguy2esw]

i think alternative heat willbe both up and down , up due to tax credits and still a bit higer (though not too bad) cost of traditional fuels, down due to the sluggish economy. i think the higer end lines will be more down than up and the lower end will be a bit higher than low. but then again , what do i know lol

 

[Nonprophet]

The deforestation is not from wood-burning, it's from agriculture (duh) and heavily from ship-building. The Scottish highlands, for instance, were stripped bare by the English in the 18th century for masts for the English navy.

Worldwide, 50% of deforestation comes from logging for timber, and 50% comes from heating and fuelwood gathering (for cooking).


NP

 

[summit]

"I love how some people say wood is renewable. True it is, but I bet I can burn through 3-4 cords faster that what it takes nature to grow back. Take a drive through Italy or Germany, not much forest left there."

Love it all ya want. This place is five and a half acres, four and a half of it woods, and I have heated this joint with wood cut off of this property since 1985. And last year a wood whacker stopped by to ask if he could cut any for me and he said that I had the thickest, best looking woods around here.

Up until I got the EPA stoves I was cutting and toasting five to six cords a year. Down to three cords a year now. The cash crop on this farm is trees.

I hear ya, BB... we got 3 acres on the home lot and it is always possible to scare up a cord of mixed wood for the closest 2 acres to the house. The other side I'm savin' for later. Each year I go to trim it out, and I always get a bunch. The real wood I get off the big 160ac lot 30 minutes away. I'll Never live to exhaust that.

 

[Fsappo]

Since it popped up again and we are about at the halfway point of 2010, I'll say this much:
Sales in 2010 are up 34% over 2009 with higher margins and expenses running almost exactly the same
Sales and margins in 2010 are running almost exactly (with .5%) of 2008 which was a great year expenses are tracking about 8% lower.
So I'm very happy with 2010 so far.

Hard to imagine with fuel prices for all fuels low and available cash in the pocket for a stove and installation being low. When existing heating units are already installed.

Glad to hear it. Just don't understand it. The only answer has to be the tax credit. So since I ain't buying a stove this year but will be paying off the deficit, you are welcome. ;-)

Glad to hear it and not understanding pretty much sums up what I feel. Part of it is aggressive free local marketing and staying in contact with just about every builder and architect within 100 miles of me. When pickins are slim, a lot of builders are doing fewer projects but those projects tend to be more upscale. We have that kind of showroom, service and reputation. Honestly, the tax credit is helping some, but we are doing a huge job with gas fireplaces. If we can match 2008 numbers in 2010 I'll be thrilled. Part of keeping the expenses down is watching very closely the time billed for labor compared to payroll, taking term discounts which vary from 1-5% and me doing the sales, marketing, scheduling, a/r, a/p, loading, unloading, etc. So our payroll is me, a full time installer and a part time helper. It's 60 hours a week but it helps on the bottom line. One thing about a bad 2009 is it made our company much more ship shape to handle 2010.

 

[thechimneysweep]

We hit the tax credit pretty hard on our website, media advertising and in-store signage, and the resulting spurt in wood stove sales helped keep the wolves away from the door.

Not saying how great the year 2010 has been, but so far my only complaint is, why does it seem there's not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

 

[BrotherBart]

We hit the tax credit pretty hard on our website, media advertising and in-store signage, and the resulting spurt in wood stove sales helped keep the wolves away from the door.

My only complaint is, why does it seem there's not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

They bought the little umbrellas online?

 

[begreen]

Economy is tough in the islands. They must be recycling the umbrellas.

 

[webbie]

The hearth industry tends to be what a dealer makes it - that is, there is always business to be done!

I was in the retail biz from 1978 to 1998, a time with only one energy shock (1979), which I was too new to take advantage of. We simply could not get any product since we were a relatively new and small dealer. The other 18+ years were a time with no tax credits, $1 a gallon oil...sometimes less, no public awareness, etc. - yet we increased sales every year except one. We also were profitable every single year.

Since I left the business there have been 3 decent "shocks" (Y2K, post-Katrina and 2008) as well as more awareness and now tax credits. It would seem that a savvy retailer should be able to make a go of it.

As to wood being renewable - that is not even a question! It is, of course, renewable! However, IMHO it is best used for "Heat Local" thermal heating on a small and mid-sized scale. I don't get excited about massive wood burning electric generation, etc...but do think that in forested regions of the country, it can be a decent part of the mix when used responsibly.

 

[sauer]

We hit the tax credit pretty hard on our website, media advertising and in-store signage, and the resulting spurt in wood stove sales helped keep the wolves away from the door.

My only complaint is, why does it seem there's not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

They bought the little umbrellas online?

zing

 

[Fsappo]

We hit the tax credit pretty hard on our website, media advertising and in-store signage, and the resulting spurt in wood stove sales helped keep the wolves away from the door.

Not saying how great the year 2010 has been, but so far my only complaint is, why does it seem there's not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

LIfe is hell. I feel for you brother.

 

[ControlFreak]

We hit the tax credit pretty hard on our website, media advertising and in-store signage, and the resulting spurt in wood stove sales helped keep the wolves away from the door.

Not saying how great the year 2010 has been, but so far my only complaint is, why does it seem there's not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

LIfe is hell. I feel for you brother.

You may find this odd, but I'd rather be sitting in the living room watching the fire with a raging snow storm outside knowing that there's no chance of being able to make it in to work tomorrow. There's just something that is so peaceful and comforting about this.

 

[Slow1]

LIfe is hell. I feel for you brother.

You may find this odd, but I'd rather be sitting in the living room watching the fire with a raging snow storm outside knowing that there's no chance of being able to make it in to work tomorrow. There's just something that is so peaceful and comforting about this.

You seriously think there are many of us HERE that think that is odd? Bring on the snowstorm!

 

[Todd]

LIfe is hell. I feel for you brother.

You may find this odd, but I'd rather be sitting in the living room watching the fire with a raging snow storm outside knowing that there's no chance of being able to make it in to work tomorrow. There's just something that is so peaceful and comforting about this.

You seriously think there are many of us HERE that think that is odd? Bring on the snowstorm!

Not so fast Slow1, summer is just beginning and even though I have a new stove I still want a little warm weather.

 

[BrotherBart]

Not so fast Slow1, summer is just beginning and even though I have a new stove I still want a little warm weather.

Ya got that right bro. Let's see what he says after thirty more years of wood burning. Well, I would be 92 so maybe you see what he says.

PS: How's the fishing this year Todd?

 

[thechimneysweep]

Not saying how great the year 2010 has been, but so far my only complaint is, why does it seem there’s not a single waiter or waitress in the entire Caribbean who can manage to deliver a Mai Tai to my beach chair with the little paper umbrella intact?

LIfe is hell. I feel for you brother.

You don't know the half of it. The Formidable Mrs. Oyen just scanned my original post over my shoulder, and suggested I correct a few typos:

Instead of Caribbean, read City of Ferndale
Instead of Mai Tai, read brewski
Instead of paper umbrella, read coaster

 

[begreen]

Oh that's bad, real bad. You and the missus come on down to our island and I will have a cold one waiting for you, with coaster and umbrella. (But no grass skirts. I have to draw the line somewhere.)

 

[Slow1]

Well, this weekend I was moving a pile of crushed stone in 80+ degree temps with humidity that seemed to match. Cooler weather would have been most welcome I'll tell you. They keep promising a T-storm which I would welcome if it would drop the temps and humidity but so far they have missed me it seems. Oh well. I think I handle cold better than heat - I can have so many clothes to take off after all. Mind you we moved up here from TX to avoid this kind of heat. Guess we should have stuck to the original plan of moving to AK.

So what was the original point of this thread anyway?

Oh yeah - impact of the economy on stove industry. I have little to contribute there I suppose - I sure hope it only wipes out the weak (poor service etc) and the good shops and brands thrive. That is one good thing about a weaker economy perhaps - some of the "anyone can do this" yahoos in any given industry get wiped out.

 

[BrotherBart]

Mind you we moved up here from TX to avoid this kind of heat. Guess we should have stuck to the original plan of moving to AK.

Should have moved from Texas to Virginia like I did. Today was the 18th day this month over 90 degrees and the heat index was 108. Again. :ahhh: