Oil City pellet prices.

[buildingmaint]

Agway has Hammer pellets for $195.99 a ton until May 31st. Has any one heard of some place with a better price? $189.00 a ton at that place in Pleasentville, don't know what kind.

 

[richg]

After having burned probably ten different kinds of pellets, I would have to say that Hamer was by far the worst. massive amounts of fines, giant pellets that would bridge the feed mechanism (I measured one at 3.75 inches long), mega clinkers, etc. I complained about pellet length to Lorie Hamer, and she said I would get 15 free bags. That was 2003, and I'm still waiting.

 

[Corie]

Hrm, boy they used to burn great in our Jamestown. I wonder if their quality control has gone down or that stove was just less picky. They were among our favorite pellets to burn.

 

[buildingmaint]

I burned 75 bags this heating season with no problems, I don't think my stove is real picky when it comes to size.

 

[Rocket]

The place in Pleasantville brands are American Fiber and Allegheny. I burn American Fiber and havent had any problems.

 

[buildingmaint]

I'm buying 4 tons from Agway Thursday [$ 195.00 a ton], I don't want to wait and have to pay more because gas prices are going crazy.

 

[stoveguy2esw]

After having burned probably ten different kinds of pellets, I would have to say that Hamer was by far the worst. massive amounts of fines, giant pellets that would bridge the feed mechanism (I measured one at 3.75 inches long), mega clinkers, etc. I complained about pellet length to Lorie Hamer, and she said I would get 15 free bags. That was 2003, and I'm still waiting.

being nosey: what type stove richg? also im suprised you didnt recieve what you were expecting from them. what dealings ive had with hamer pellets have always been very open and professional , especially with lori. we ran a comparison of fuels last year and i called her and asked for a few bags , she asked if i would like a ton, then ups'd me twice what i asked for. had em in 2 days. of course we are close to them here in Va. but she had to have gotten them out to me that same day. incidentally they came in as one of the best we ran in the comparison.

 

[stoveguy2esw]

The place in Pleasantville brands are American Fiber and Allegheny. I burn American Fiber and havent had any problems.

both are good pellets as well

 

[buildingmaint]

I talked to our local Agway owner today when I picked up my 4 tons, and he told me that Hammer makes Agway brand pellets and just bag them in Agway bags. He also told me that he thinks that pellet prices should stabilize as far as demand, but go up along with fuel prices. Im glad I won't have to worry about heating my house until this time next year.

 

[richg]

At the time I had a Quad 1200.

 

[HarryBack]

He also told me that he thinks that pellet prices should stabilize as far as demand, but go up along with fuel prices. Im glad I won't have to worry about heating my house until this time next year.

I agree with most of what you said, build. Buying your pellets early, now...good move. As for prices, they will go up with fuel costs, so Im not sure I agree with the stabilizing costs comment.

 

[GVA]

That's ok check this out.
The Mrs called a local shop yesterday and his price per ton right now...........$275 hh:
But he did tell her to hurry cause effective June 1st the price will be $299 :bug:
This is one of the many local knobs that are gouging based on the area... I just picked up a ton at another store 20 miles North for $220..

Anyway just wondering here dealers, you do not know how much the pellets will cost you yet do you?

I Think I should start buying and selling pellets in this area myself and undercut these guy's by 20 bucks a ton ;-)

 

[restorer]

That's ok check this out.
The Mrs called a local shop yesterday and his price per ton right now...........$275 hh:
But he did tell her to hurry cause effective June 1st the price will be $299 :bug:
This is one of the many local knobs that are gouging based on the area... I just picked up a ton at another store 20 miles North for $220..

Anyway just wondering here dealers, you do not know how much the pellets will cost you yet do you?

I Think I should start buying and selling pellets in this area myself and undercut these guy's by 20 bucks a ton ;-)

GVA,
I looked into this. Seems that it'd cost about $30-50,000 to do a start-up to sell pellets. That's facility rental, truck and equipment purchase and the usual business expenses. That would also buy start-up inventory, if you could find a manufacturer who will sell you pellets. Most have fully contracted for sales this year.

 

[HarryBack]

That's ok check this out.
The Mrs called a local shop yesterday and his price per ton right now...........$275 hh:
But he did tell her to hurry cause effective June 1st the price will be $299 :bug:
This is one of the many local knobs that are gouging based on the area... I just picked up a ton at another store 20 miles North for $220..

Anyway just wondering here dealers, you do not know how much the pellets will cost you yet do you?

I Think I should start buying and selling pellets in this area myself and undercut these guy's by 20 bucks a ton ;-)

prices DO go up on June 1st, I believe, GVA, so that part is truth. For example, lets use New England Pellets as an example. Their hardwood pellet IS going up June 1st, but it isnt $20/ton. Much less than that, actually. The Canadian Premium New England Pellets ARENT going up in June, far as I know. The Standard pellets, not sure there. Yes, I DO know what the SCHEDULED June increase is, but that isnt to say New England will follow their scheduled increase.

I cant understand why the prices from that dealer are so high, GVA, our Hardwood Premiums are $229/ton, and our Premium Canadians are still $199/ton.

The problems with pellet sales, Ill address below as per Uncle Rich's statement.

 

[HarryBack]

;-P

That's ok check this out.
The Mrs called a local shop yesterday and his price per ton right now...........$275 hh:
But he did tell her to hurry cause effective June 1st the price will be $299 :bug:
This is one of the many local knobs that are gouging based on the area... I just picked up a ton at another store 20 miles North for $220..

Anyway just wondering here dealers, you do not know how much the pellets will cost you yet do you?

I Think I should start buying and selling pellets in this area myself and undercut these guy's by 20 bucks a ton ;-)

GVA,
I looked into this. Seems that it'd cost about $30-50,000 to do a start-up to sell pellets. That's facility rental, truck and equipment purchase and the usual business expenses. That would also buy start-up inventory, if you could find a manufacturer who will sell you pellets. Most have fully contracted for sales this year.

The first problem, as UncleRich stated, is you'll need to find a pellet co to sell you pellets. Right now, most of the production is tied up with the local mills, and if you had to bring in one not local, youd pay alot for shipping, possibly forcing you to be less competitive. Also, many mills wont opne up a "new" guy, for fear of pissing off a company who supported them for years.

As for UncleRich's figures, you could try it "on the cheap", basically renting a SMALL facility, getting a rental or junker forklift, but you wont get a truck for delivery in there. You'd have to do a pickup only business, as the truck alone is quite expensive...I know, I own 2. You'd need to buy inventory, pay someone, get insurance, Workmen's comp, etc. I think Rich's figures are WAY low tho, given the margin we seem to get with pellets. I know he'll argue this one ;-P , but we've been doing this a long time, and though I might be wrong, I dont think so. The truck/forklift alone, assuming you buy new, will cost $160-189k, EACH. If you think you are going to deliver by hand, I'll challenge that. Last Friday, I (myself, no help), delivered 52 tons of pellets. I seriously doubt you could find anyone who could do that by hand. Even delivering that quantity, its hard to keep up. I can bore you with the problems of delivery, but anyone who has ever done it knows the same stories. The more I think about it, a "no frills" pellet biz would be pickup only, a small shed with power, a stove, and a portapotty, and a small forklift. Everyone comes in, pays cash, check, or credit card, and carts their product away any way they can. Then you have to figure your margin, what you wanna make per year, incidental costs, etc....in doing so, I think you'd be hard pressed to be much cheaper than most others, except GVA's enterprising dealer......

 

[restorer]

;-P

That's ok check this out.
The Mrs called a local shop yesterday and his price per ton right now...........$275 hh:
But he did tell her to hurry cause effective June 1st the price will be $299 :bug:
This is one of the many local knobs that are gouging based on the area... I just picked up a ton at another store 20 miles North for $220..

Anyway just wondering here dealers, you do not know how much the pellets will cost you yet do you?

I Think I should start buying and selling pellets in this area myself and undercut these guy's by 20 bucks a ton ;-)

GVA,
I looked into this. Seems that it'd cost about $30-50,000 to do a start-up to sell pellets. That's facility rental, truck and equipment purchase and the usual business expenses. That would also buy start-up inventory, if you could find a manufacturer who will sell you pellets. Most have fully contracted for sales this year.

The first problem, as UncleRich stated, is you'll need to find a pellet co to sell you pellets. Right now, most of the production is tied up with the local mills, and if you had to bring in one not local, youd pay alot for shipping, possibly forcing you to be less competitive. Also, many mills wont opne up a "new" guy, for fear of pissing off a company who supported them for years.

As for UncleRich's figures, you could try it "on the cheap", basically renting a SMALL facility, getting a rental or junker forklift, but you wont get a truck for delivery in there. You'd have to do a pickup only business, as the truck alone is quite expensive...I know, I own 2. You'd need to buy inventory, pay someone, get insurance, Workmen's comp, etc. I think Rich's figures are WAY low tho, given the margin we seem to get with pellets. I know he'll argue this one ;-P , but we've been doing this a long time, and though I might be wrong, I dont think so. The truck/forklift alone, assuming you buy new, will cost $160-189k, EACH. If you think you are going to deliver by hand, I'll challenge that. Last Friday, I (myself, no help), delivered 52 tons of pellets. I seriously doubt you could find anyone who could do that by hand. Even delivering that quantity, its hard to keep up. I can bore you with the problems of delivery, but anyone who has ever done it knows the same stories. The more I think about it, a "no frills" pellet biz would be pickup only, a small shed with power, a stove, and a portapotty, and a small forklift. Everyone comes in, pays cash, check, or credit card, and carts their product away any way they can. Then you have to figure your margin, what you wanna make per year, incidental costs, etc....in doing so, I think you'd be hard pressed to be much cheaper than most others, except GVA's enterprising dealer......

Harry:
Not disputing your calculations. I was a little muddy about the costs. Everything would be leased/rented except the pellets, and yes it would be a cash and carry operation. The problem was in getting pellets to a sales yard. The yard has to accommodate a double TT rig. Alternative was a drop ship arrangement and local pick, or using a rail siding drop. We thought about it all, and couldn't make the numbers work. Mostly because we weren't able to get more than one reliable source of premium pellets to even talk to us. You are right, they manufacturers need to stick to their long term customers.

 

[GVA]

I'm not really gonna do this but if Idid this is what I would do...
Well I'd start off small Maybe 3 truckloads, I'd store most outside at the place I work at now (and it's surrounded by fence and razor wire already).
I would have pleny of forktrucks on hand for loading but delivery would not be an option. But I could do a system where people buy a ton and can store it here and pick up the 10 bags at a time that alot of the yuppies in this area do, (these are the trendy type heating people).
I would cater towards the locals in the area where there is a stove shop that sells stoves the next town over from my plant but doesn't sell pellets.... I live just North of Boston so I'm sure I could charge 20-30 bucks a ton more in Boston, than the nitwits here are charging me :cheese:
So if I paid $200 a ton I could easily sell them in Boston for about $330 a ton, nice little profit margin here ;-)

And also as far as a company selling to me........ I could call one of those online sales co( which seem to be growing) order me 10 ton at a time if I had to and then tack on to thier per ton charge another $50 bucks :coolsmirk:

See the problem here is the market in this area IS gouging...
We have the gasoline/ heating oil/ NG etc... Coming into the port here and the price charged locally is the same as someone in worcester (as an example). The cost of shipping it from the port of entry should raise the prices correct? Ahhhh nevermind I live in an area that charges the max for everything.. Maybe I'll move .... Well let's look at what has happened to the west coast this year with pellet prices..... They are paying more than the east coast right now.. So I won't go there..... Uncle Rich hows Utah? ;-)

 

[HarryBack]

possibly if there were an overabundance of pellets in a given area, the manufacturers would be open to negotiations, but if that were to happen, I think it more likely you'd see a direct-sell pellet manufacturer.

We looked at a "no-frills" pellet biz as well. Problem seemed to be the folks who wanted it delivered, at least in this area. The yuppies dont have a pickup or trailer....God forbid, they might actually break a nail or strain a muscle that they worked so hard in the health club to build up. At least 50% of our sales are delivered...maybe more. Biggest problem in delivery? Catering to the customers. One guy can only be contacted before 7am, or after 5pm......another insists on getting pellets on sunny Saturdays only, and before noon, another wants them delivered over the stone wall next to the barn, another wants them in the back yard by the bulkhead, over delicately manicured lawns....but dont bend a blade of grass, another wants theirs stacked in the cellar, oh, and they all want that for free.....(laugh, but I didnt make these situations up...all true).....the most challenging thing for us is the idiosynchracies of the folks. Add the fact that the pellet co's change their "rules" for distribution every year, so its a different biz each year, and its a pretty tough business.

The other thing you'd need to beware of is the dealer who has deeper pockets than you do, and can afford to sell at very little profit (or NO profit, or selling at LESS THAN cost), forcing you out of business in a very short order....its called predatory pricing. I think it'd be easier to work for the gummint or the state......every weekend off, great benefits, pension, each and every foolish holiday off, etc. We are closed a total of 8 days per year....so, if you want to work more than 357 days per year, be my guest.... :lol:

 

[restorer]

Maybe I'll move .... Well let's look at what has happened to the west coast this year with pellet prices..... They are paying more than the east coast right now.. So I won't go there..... Uncle Rich hows Utah? ;-)

We stayed pretty stable with prices here, but there were shortages for those that didn't plan ahead. Right now, you can't buy a decent pellet. The BigBox stores, and stove shops think it's not the time to sell. My last source said maybe September, probably October. I cringe at the thought of what they might be then. I have two field trips planned before the end of June. One to a plant in Evanston, Wyoming. Not a national company, but heard some positive things from users. I will buy two ton if the quality is good and the fines are small. Plus I'll, make a swing to Flaming Gorge for a couple of 7-10lb. lake trout. Second trip will be to Southern Idaho. They will only sell me two at a time (tons that is) but they have a good rep, and a few dollars more.

The local plant offered me two ton at $160.00 each, but I pointed out to the manager the crap in the bags meant about 25-30 lbs good pellets. No deal there. They need to clean up their processing. Might help if someone spoke English........ (let's not go there, OK!). I suspect the Eurekas and Lignetics will be in the $300 per ton from the get-go. There is no such thing as old stock here. If I still had a contact in Eastern Washington, I'd go for a buy at Eureka, Lignetics or North Idaho. Maybe even go down to Bear Mountain. Unfortunately I'm in the, crap on Utah state. I can get a trailer to haul three ton with my van, or I can fire up the big truck and load three on it plus the trailer, but the gas goes to the toilet, about 4mpg fully loaded. A 1,500 mile road trip is not practical.

So, Winter 2007-2008 may mean a major increase in fuel costs. Still, it'll be less than NG, way less than oil. My latest search is for a high efficient coal burner. It's still cheap. A case of OUZO, and fifty bucks gets my pick of bags or bulk. I still think it's not clean, but I'm thinking of the old stoker-matics. Corie has me looking at those Esse's in Portland. Hmmmmm, pellet, rock, pellet, rock, pellet, rock.....

 

[HarryBack]

ugh.....September? October? I bet the florist only wants you to buy roses on Mothers' Day too, right? Thats a sound strategy for the consumer....wait until demand is high and the supply is low, THEN buy the pellets! We had a pretty good April.....sold around 1000 tons.....but then it was cold, wasnt it? Around here, the big boxes dont sell pellets till at least August as well.....it completely boggles the mind.
Maybe you could sell pellets, UncleRich, with brilliant competition such as you have there.....and the marketing....wow.

 

[GVA]

Well if they put me out of business I would have a nice supply of pellets for home...
I would never deliver pellets because of the reasons you stated, and more...
Most dealers seem to have reasonable prices except here on the north shore.... HB when your Quality's hit $199 the local yocals were still $325 a ton. They need a reality check up here.... And the no frills guy like me would buy from a guy like me :red: .
It's all a dream anyway I only could afford a ton at the early buy rates this year and will have to take my chances through the summer and fall to accumulate more at a reasonable price... Let alone 75+ton to start a business.

 

[restorer]

Well if they put me out of business I would have a nice supply of pellets for home...
I would never deliver pellets because of the reasons you stated, and more...
Most dealers seem to have reasonable prices except here on the north shore.... HB when your Quality's hit $199 the local yocals were still $325 a ton. They need a reality check up here.... And the no frills guy like me would buy from a guy like me :red: .
It's all a dream anyway I only could afford a ton at the early buy rates this year and will have to take my chances through the summer and fall to accumulate more at a reasonable price... Let alone 75+ton to start a business.

Go on a righteous campaign, "STOP BUYING" The dealers will change their tone when they can't sell their inventory. I do work for a resort community. They repair folks up there used to bring us repair work, we'd give them a break and then they would double the costs to the "locals". We got a little irritated and doubled our costs to the repairmen and ran an add in the local paper, offering a fair quote. When the locals found out we were doing the work all along and charging half or less, and the customer was on the receiving end of the deal..... Well, you get the idea. We still charge the shops there the doubled rate, be we are the only ones in town that do the work.

I carefully buy from the independents when ever possible. Even if it costs a little more, I buy their products. I spent about $150 with Homed Depot, and probably spent twice as much driving past their store to buy from a local supplier. I spent $6,500 with them, and I still get the best discount they offer, to shops that do 10 times my volume.

I handle glass for three shops in the Boise, Idaho area with three local shops here. They as much as told the local glass conglomerate to pound sand. I think they do about $20,000 in glass here. The price of specialty glass has dropped 50%, but it's still cheaper here.

You need to spread the word, get all involved and refuse to pay, or organize a pellet run to a cheaper and more customer friendly source.

 

[restorer]

possibly if there were an overabundance of pellets in a given area, the manufacturers would be open to negotiations, but if that were to happen, I think it more likely you'd see a direct-sell pellet manufacturer.

We looked at a "no-frills" pellet biz as well. Problem seemed to be the folks who wanted it delivered, at least in this area. The yuppies dont have a pickup or trailer....God forbid, they might actually break a nail or strain a muscle that they worked so hard in the health club to build up. At least 50% of our sales are delivered...maybe more. Biggest problem in delivery? Catering to the customers. One guy can only be contacted before 7am, or after 5pm......another insists on getting pellets on sunny Saturdays only, and before noon, another wants them delivered over the stone wall next to the barn, another wants them in the back yard by the bulkhead, over delicately manicured lawns....but dont bend a blade of grass, another wants theirs stacked in the cellar, oh, and they all want that for free.....(laugh, but I didnt make these situations up...all true).....the most challenging thing for us is the idiosynchracies of the folks. Add the fact that the pellet co's change their "rules" for distribution every year, so its a different biz each year, and its a pretty tough business.

The other thing you'd need to beware of is the dealer who has deeper pockets than you do, and can afford to sell at very little profit (or NO profit, or selling at LESS THAN cost), forcing you out of business in a very short order....its called predatory pricing. I think it'd be easier to work for the gummint or the state......every weekend off, great benefits, pension, each and every foolish holiday off, etc. We are closed a total of 8 days per year....so, if you want to work more than 357 days per year, be my guest.... :lol:

Damn the sins of trying to be a retailer. I have closed the store, so people now have to deal with my eccentricities. I do pick up and delivery only. No one visits my shop, period. I set the time for pick up and negotiate the delivery. I do the work on my schedule, I try and accommodate the customer, but it's first-in-first-out. No exception, even a double the price bribe doesn't work. The customer for twenty years understands, if the wait list is two months, that's it, but if it's I can have it tomorrow, be prepared for a delivery.

Harry, Make a new price schedule. Tell the customer what you will do for what price. Tell them if they want more, they can hire someone else to do the fine points. Have a list of casuals that can move them down the lane, over the wall, through the garage and down the stairs to the cellar. The only thing is, the folks doing the work are the customers hire, and you have nothing to do with the cost or quality of the work. Charge on paper for all extras. It is truly amazing how those yuppies can come up with a truck and loaders if it saves them $50. Explain to the long-time customers, you can't afford to do it the old way for too man reasons to explain. Just, BE FAIR. Don't do for some and not others. I have a refinisher that I work for that has never seen my shop in 15 years. He knows how I work and I am fair. He's asked to stop by and check things out, and I've asked, "Something wrong with the way we do business." That usually gets a nice lunch and a friendly chat.

The cost of doing business needs to be shared with our customers. We can no longer hide behind vague references to rising costs. Tell them you can't afford to deliver for free and keep your prices down. Ask if they can handle the delivery, or can you refer them to someone who might be able to give them a good deal. Tell them this is what you'll do, but they may be able to find a better deal. And of course, they can go to the Big Box stores and get a deal.

What the public expects costs us money. I like to eat too, I haven't had a pork chop for weeks, do you think they care? Not in the least. Three bucks for a coffee is nothing, why should I have a cup of Folgers? Facts be known. I don't have ulcers, high blood pressure and sleepless nights since I started saying, NO. Won't do that.