Value = Best possible pellet at the Best possible price................. You might mean Quality? If money wasn't an object. Then it would only be Quality of said product. But the money is a big part of the deal or should I say bargin................. Maybe the biggest for some that live paycheck to paycheck. And if money didn't matter we'd all be burning the easy fuels that didn't require the work we must do. I'd certainly turn on my electric/oil/propane/NG heat and sit on my can and drink from a fancy glass. But my pockets aren't that deeeeeeeeep! Just saying! There'd be a lot less beer in my fridge if I didn't have box stores in my area.
as for Home Despot and what they sell stuff for....I think in this case they are selling below cost, and while I don't blame you folks at all for buying those great pellets for such a low cost, I do think that basically HD feels the HAVE to be the low cost leader, and while they are most likely aware they are losing money there, well, for the truck or two they will get in before they decide not to stock pellets anymore....again (this season), they will just bite the bullet and do so...they have myriads of stores, and tens of thousands of sku's they do make money on to offset the loss they will have on the pellets. Now, most pellet retailers just cant do this, as they don't typically have multiple stores, Big Board income, etc. Trust me though, those Doug Fir pellets are like crack......once you try them, you will realize they aren't just a "little" better than what's normally out there, but ALOT better. As for value, well, that's a personal view. Some folks only eat Ramen noodles because its cheap and all they can afford....but if you can buy Kobe filet for the same price as ramen noodles, why not buy the beef? But once you try the beef, you're gonna have a hard time going back to the ramen.....trust me.....come to the dark side.......bwahaha....
I agree with Doug's choice of the word "value". Focusing on "price" the consumer will buy the lowest cost pellet regardless of quality. Focusing on "quality" the consumer will buy the best pellet regardless of price. Focusing on "value" the consumer will look at the combination of "price" AND "quality" and buy the pellet that makes sense given the combination of the two. As pointed out earlier, there are some who would see the Blazers for $5/bag at HD and walk away saying that HD was price gouging without an understanding that even at that price, it would still be a "value" buy.. Just my non-pellet burning, looking from the sidelines, but ready to go to Home Depot and buy a ton of Blazes opinion....
Knowing Doug for a number of years. I read his comment as "Go spend a bit more money for a higher quality pellet" and "The box store should also be charging more for a higher quality pellet(ie the Blazers)". Most people that shop at the boxes aren't as pellet looney as us folk. We are value(best price on best quality) buyers, Where the average user is price alone and quality isn't even considered. Box store mind set is all pellets are the same and it is also the same thought of the average pellet burners. I have been throwing rocks in this puddle and causing ripples for some time now. Sure has been fun too!
How much do you think they may be losing per pallet?? They are in multiple states and every HD in my neck of the woods. I would guess they are selling thousands of pallets.
My guess is $80 bucks per pallet($219 compared to roughly $300/ton). The boxes could still be making something on these! Box stores speak volume. they buy in large volumes. So a better bottom line is had from the mill. If a pellet house bought 100,000 tons the price per ton would be cheapier than the guy that buyes 1000 tons. Again, just saying!
I find myself looking at the pellets every time I go to my local HD and Lowes... Just to see what they have and compare it to the recommendations I've seen on this site.. I was at HD about a month and a half ago and I ask the sales guy what he would recommend.. He pointed to the Green Supremes and said "these are the one that we sell the most of".. "customers seem to like 'em". I thanked him for his time.... The box stores are too much of a big bureaucracy. If they wanted to sell quality pellets at discount prices first they'd have to educate their sales staff then they'd have to educate the consumers... Question is what would cost less? Educating their staff and the consumer or selling pellets at a loss for the next month or so. The downfall of #2 is that some (a small percentage) consumers may actually realize that the Blazers are FAR better than the GS's they've been burning for a while and change their suppliers next year when Blazers don't show up at the HD again in the fall. Selling at a loss certainly can't be a long term strategy for HD... Just a way to keep customers happy now.
I believe that HD is making money on these pellets. For those that think they are selling them for a loss how much of a loss per pallet? At thousands of pallets even ten bucks adds up to a pretty significant loss even for the box stores.
I could never get a straight answer when I asked. I did get a "Its a wash for us" answer, but felt I was being fibbed to a bit. IMHO like anything else they sell, There has to be some profit involved. Just not as much as the little guy mom and pop selling them.
Not sure how it is in their industry, but in ours many products that come in may have a 90,60,30 day dating program. Maybe they are getting a quick turn and using the manufactures money for 30 days or so! Gary
Same here....the GT's were available in the early heating season, but once they were gone, never saw any more.
Up in this neck of the woods, Some of the box stores are stocking pellets year round. However, come May and June, the price goes up 20 to 30 bucks. As for higher value. Look at the BTU output. The spread isn't that huge. Look at Blazers. They have a 9,200 BTU rating and 0.37 % ash. Now look at MWP, they have a 8390.18 BTU rating and 0.47 ash. So, Blazers are about 10 % more heating quality, and less ash to clean. So if you have a stove that you set the temp on, and it adjust the feed to keep the heat at the set level, then in theory, you should be using about 10 % less pellets using Blazers to achieve the same outcome as using more MWP to get that same heat. My conclusion now and has always been, why would I then spend more than 10% of what MWP for the same heat? With the new Harman, it adjust itself. Cleaning is a breeze. If you want premium heating, buy an efficient heating unit and insulate at a premium level. Then buy pellets that you can afford. If I can heat with 250 bags of $300/ton. that is $6 per bag = $1500 per year. To get the same amount of heat with MWP, I will need 25 more bags. HD's price of $4.18 per bag x 275 = $1149.50 and a savings of $350 http://woodpelletreviews.com/
I try to buy the hottest, least ashiest pellet at the cheapest price possible for the cold spells. Typically, in my case, it's Somerset ($230) and Turman ($240)...that is this year's pricing.
If you want good clean oats you pay a fair price, if you want oats that have already been through the horse that is a different story! Gary
you'd be wrong. Google "Loss Leader" and "Predatory Pricing"......the big boxes are the absolute KINGS of both of these sales philosophies. Now, in this case (the Blazers), I am relatively certain its a loss leader rather than predatory pricing. But, the fact is, there are folks who work in Atlanta whose job it is to determine what the most price sensitive items are, and price them, yes, lower than cost, to make the competition look bad. A smart consumer recognizes this and takes advantage of those loss leaders. For instance....a framing contractor might know how much a 2x4-8'er goes for, but does he know how much a 2x10x24'er costs? Probably not. So, the big box sells the well-known item (2x4x8) for less than cost, and tears you a new one for the 2x10x24. The big box looks good because the price that everyone knows is low, whereas the price on the more obscure item else is higher than even their competition. This makes up for the margin lost by the lower-than-cost item.
I guess we have to agree to disagree on this one. Blazers are made by West Oregon Wood Pellets, and, from their website, they product a hair over 100,000 tons per year.....which is a good-sized mill, but not a huge mill (the Schuyler, NY pellet mill of NEWPs alone produces 100,000 tons, not including the Deposit and Jaffrey plants). Given what even the cheapest pellets cost these days, and I cant hazard a guess what they are paying, but, add freight in there from W. Oregon to the east coast, and I cant even come close to making the math work at $219/ton. The "discounts" the big boxes get aren't huge.....$10-$30/ton......
could be.....many of the items you see on their shelves aren't even paid for until after they are sold......(like consignment)
Never want to assume why the pricing is the way it is, An assumption is no more accurate than long range weather predictions. Might be, but also might not be. My family had a Mom and Pop store for many years. Take gasoline. You pay way more tax on a gallon of gas than what the store takes in as their part. Once they pay out overhead, they are lucky to break even. As long as they don't go backwards it is profitable because it often brings the customer in for other things that have a better profit margin. Like coffee or fountain items. Those items are all self serve so that helps cut cost. My brother sold pellets for a while. Volume is the only way to make a go of it. None of those pellets that HD is selling now sits in their yard costing them money. They are gone just as soon as they are delivered to the store. In the last summer, when pricing is best at HD, I will go buy my pellets to be delivered the next week. None of those pellets sitting out in their yard will come to me. They have been sold and are waiting delivery. My pellets will come in later. When you know you are going to have 100% nearly instant sales, you are willing to move more product for the smaller profit.
