That pretty much sounds like the business model for most businesses and pellet manufactures are no different. The millions of tons produced in the south that go to power plants are contracted months (even years in some cases) ahead of time and mills work on economy of scale to make it work. The margins are razor thin, but they can push thru 1000's of tons in a month and make it work. They don't have to bother with bagging, pallets, shrink wrap, pallet covers and for the most part even storing the pellets....most get made and are then loaded into a rail car after proper cooling. It is a much different process if you are bagging for the home heating market, and normally not making the same tonnage as with bulk. As a business man, I'm going to service the market that makes the best sense (ROI) possible....be it Europe, USA, drilling companies, power plants or even the chicken farmer down the road. Bottom line is we have to make a profit just like any other business does...or you don't stay in business. First rule of business is you HAVE to make money at some point. You aren't there to just employ people....you are there to make money.....anybody who says they aren't....are lying or have a large trust fund.
The store down the road from me put up the '10 bag per person per day' sign. There are at least 20 tons in the parking lot underneath a heap of snow and ice. All Michigan wood pellets. I was at Lowes last night and they're asking $5.48/bag for the same junk. Glad I still have about 3 tons in the barn.
cant blame a company for maximizing profits, but no one KNOWS why this phenomenon happens.....all I can do is give you the view from my retailer side of the couch. Cant get much, and some of what can be gotten is very expensive.....very expensive. Dealers at this point don't know if they will sell it all, don't want to sit on expensive product all summer, so are reluctant to bring in any kinda quantity. We sold 68 more tons today......that's almost 3 trailerloads....but no one knows how long the legs are left in the season.....easy to say "just buy more" when its not your money....
Lowes by me has had probably 15 tons of Supreme Comfort sitting there for several weeks now. Still marked @ $5.58/ bag. Ummmm no. Pellets were $200/ton last year, and there haven't been any availability issues locally that I know of. Good thing I like corn.
yup, like I said, it might be a localized issue as well......but to me, the only issue pertinent to me is the local one....local to ME. I don't do business in NY, cant comment about there, but I know we are busier than a one armed paper hanger selling pellets, and constantly hear from my old and new customers that NOONE seems to have any......maybe I should send them to Watertown NY?
wouldn't it be nice to be able to foretell the future, such that we knew how much we'd sell, therefore could plan ahead on what to buy, without taking the big risks of a huge inventory investment and then having an early spring, etc? At the same time, I would also know the lottery number for the powerball too.....
well, no one knows about next season, but when one doesn't know when tis one will end, hard to say. We haven't run out as of yet....matter of time though.....heck, Im all set, plenty in my cellar! Near my jam and pickes!
I got out today. Went to HD. They have AWF, softwood, all pine. I think 258 a ton. They were going out the door fast!
