Five value-added approaches
by Gene Wengert, President
1. Add value to present product
--Make it better; upgrade it
--Make what the customer wants
--Rename "low grade" lumber to "industrial grade" lumber
--Manufacture short lumber (at least 10x more valuable than chips)
2. Sell the same product you now manufacture, but sell it to a different market (where it is more valuable)
--sell to hobbyist
--sell No.2 Common to furniture/cabinet
--sell No.3 Common to flooring mill instead of pallet mill
3. Make a new product (i.e., "new" for your operation)
--Try to enter an existing market for wood; BEWARE: Often competition is well established
--Enter a market where you are substituting wood for another non-wood product
--Enter existing market, but market not well served or market with room for expansion
--Enter new/developing market
4. Get more value from the present resource (less low value, less waste, better processing)
--end coat logs (at least 4%) and lumber (up to 4% gain)
--sawyer efficiency (up to 22%)
--Don't sell veneer logs
--Make lumber without stain; lumber that is flat and smooth
5. Improve marketing and sales
--"I'd rather justify my prices being high than excuse my quality being low."
--"Are you interested only in price" (17% say yes!) "or are you interested in quality and availability (delivery)?" (27% are not strongly interested in price)
* quick delivery
* low price
* high quality
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