Seems like every week I get more contacts regarding urgent buying strategies. I want to share two of them with you today. One was a contractor yard, preparing to requote a $3 million multi-family framing package. The member was advised by the contractor that his price was roughly 10% high, $300k. The question was, “Are my numbers in line with the market? How can I trim $300k?” The other was a lumber yard looking for one truckload of a specialty item of sorts. The question was, “What should I offer?”
First, do not trust the information given you as completely accurate, rather just a clue that making a trade is possible.
The most critical component of a good trader is personal relationship. It must be more than just customer and supplier. What we want to establish is that day in and day out, you are perceived as a problem solver, a pain remedy. That keeps you always near or at the top of the “favorites” list.
Why is that so important? FIRST & LAST LOOK! This is the single most advantageous buying or selling position, first and last right of refusal to buy or sell.
The advice I gave on the multi-job, “Requote with a small 2-3% margin, ask for last look, then buy in your remaining profit in a month.”
The advice in this strong market for the specialty truck was to solve the mill’s problem of having two trucks on the ground. “Counter $40 and take both.” He got the price plus 30-day billing.
The important thing to realize is old relationships are not transferable. Whether a new-to-you supplier or customer, or well established, realize someone is always trying to take your spot. Re-earn the privilege of first and last look instead of riding a predecessor’s coat tail. That is the mark of a great lumber trader.
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Looking Forward...ML
Are you fed up with being caught on the wrong side of the market...losing orders because your lumber prices make you uncompetitive. I can assure you the orders you lose are not because the other guy is selling at a loss.
It’s not you or your buying style. It’s just timing. I forecast when the Lumber Market will rise and fall. Why? Because after 30 years, I know it better than anyone. No one else tells you months in advance when prices will reverse....no one! Call me 336.516.6684.
A veteran lumberman, Matt Layman publishes Layman’s Lumber Guide, the weekly forecasts and buying advisories that help component manufacturers save money on lumber purchases every day. You can reach Matt at 336-516-6684 or Matt@laymansguide.info.