Profit with a Portable Sawmill

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Although cutting is the first step in converting trees to value-added lumber, it's also the one that produces the lowest net profit. "Niche marketing is where the money is," Best says. Understanding the preferences and buying habits of potential buyers is essential to developing your markets. "It's not the act of cutting that makes you money. It's knowing how to cut it for people, and who to cut it for."

Rod Wilcox of Minong, Wisconsin, couldn't agree more. Unlike SMAC, which does strictly custom cutting Wilcox took another route when he started his sawmill business after 25 years as a logger. "About 90 percent of our business is cutting lumber from logs we buy." This, he says, is how you really serve niche markets. "We buy logs, saw them into boards and raise the value by getting closer to an end result. Using a niche marketing system, every part of the wood is used."

Before starting his business, he and his wife got phone directories from cities within 300 miles and called every company they could find that used wood products. "They were almost all real responsive, and were looking for stuff we could provide," he remembers. Wilcox also thought he might be able to sell wood blocks to carving-supply houses. "So I bought some carving magazines and started making calls. Most of the companies already had suppliers, but that day we became the supplier to two of them."

Wilcox's experience as a logger devel oped into another niche market: cutting staves for a barrel maker. "We used to sell them logs when I was logging," he says. "When they shut down their own sawing operation, they called me." Cutting staves led to the purchase of a kiln, which, in turn, opened up additional markets.

Diversification, Wilcox says, is a key to success. "We make enough products now that if the flooring or paneling market goes soft, we make it up with wood for cribbage boards or with handles for barbecue grills."

You have to learn the markets, he says. When Wilcox first started, he bought some aspens to practice on, and learned how to use his new TimberKing B-20. Figuring there was always a market for it, he fumed the logs into tongue-and-groove paneling. But aspen is too plain: People prefer paneling with some pattern in the grain. The aspen wood just sat. Finally he ran an ad, pricing the boards to sell.

"A couple drove up and bought the whole load to use in their business making wine racks," he says. At the time, clear aspen sold for $1.40 per board foot in lumber stores. "At our price of 75 cents, they could afford to cut off the tongues and grooves, and still be ahead of the game. If I had researched the markets first," he says. "I could have saved the labor of cutting the tongues and grooves, and sold the boards for $1.40.

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