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Anyone have experience buying lumber direct from producers?

6236 Views 7 Replies 8 Participants Last post by  Framer53
We use the same four dimensions of lumber in a large volume which is growing. We are looking to improve our margins further.

Anyone have experience buying lumber direct from producers/mills/wholesalers?

How common is it in your area and trade?

How did you get started?

Do you buy less than truckload?

Are you in the Northeast?

Are you willing to share your contact info by private message?

Does your main suppliers also sell to the public in a retail setup?

What lumber retailers do you frequent?

What 3 to 5 things you look for in a lumber supplier in order of importance?
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Buying direct from lumber mills can tough for a small business as you have to buy truckloads and wait several weeks for delivery of an unseen product. When I ran a lumberyard to supply my deck building co. I opted to buy from wholesalers instead. Here I had to set up as a retail yard with forklift, fenced yard, signage and sales tax I'd number.

I still buy from local mills from time to time if I have need for locally grown lumber, mainly logs used for peeled post. Sometimes I get a call for Texas red cedar or cypress but not much.

If local sawmills produce the type of logs you can use for your pole barns they could save you major bucks.
You might be better off finding out what a wholesaler requires on a truck to make a special delivery write up an order that large and let all the local yards bid on it. Their markup would be minimal as they are not touching the product
Yes the unseen product. No selection, no returns.

I don't know the margins on lumber per say, but buying truckloads of siding, soffit, j and coil. The savings of less than a 7% cost over buying 20 square at a time. I didn't see the benefit of upfront monies or warehousing the materials. Cardboard doesn't do well in the weather.

You'd probably be better buying a pan former to run off the metal roofing and siding.
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A good friend from high school and previous employee is the main salesman I purchase from. He tells me he let's stuff go to me at 4-5% all the time. The small guys with cash accounts are paying 10-15%.

I'll buy some items in bulk. The savings mainly comes from having it in stock and readily available.
I buy in bulk every once in a while. It can save you like 4-6 percent. So if you buy like 3 or 4 semis at a time its worth it. How much do you use?
I am passing familiar with a 4 generation family business here.

Garage builder-so a somewhat related business to what you do.

the Garage builder stocked their own lumber,shingles, concrete block. they had facilities to keep everything except the concrete block inside.

At the time I knew them best they had 3 generations of the family working in the business in various capacities.

they have been out of business for about 2 years now-so the business lasted from the 1930's to about 2011-2012.

Very good people and I learned a lot when I was somewhat associated with them.

Again-very good people and it saddened me to see them close- but what had worked for them in the 30's/40's,50's,60's,70's,80's was beginning to mis-fire by the 90's. their buildings and yard are currently for sale.

A lot of capital tied up in facilities-and A LOT of capital tied up in lumber/shingles. Imagine you stocked up in 2007-2008-and then the market went in the crapper for YEARS????????

money tied up in lumber-wasn't really earning for them in the 90's,00's I suspect.
AND they never updated their marketing. Right up until the end they were literally still handing out dusty black and white brochures and running 2"x2" adds in the newspaper sports section.

Got to think money tied up in inventory-would have been better deployed in an effective marketing strategy.....
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Buy from the wholesalers, not the mills.

I have seen this occur with one local company that started by building picnic tables on a road that was heavily traveled by people going to their camps.

Today the business has morphed into a small lumber yard that sells replacement windows an installs them at a fair price.

If you are building enough trusses and selling enough pole barns then buying this way if you have the financials to do so will increase your profitability.
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