Know your customers – A guide for beginning a firewood business
Starting a firewood business requires in-depth knowledge of your customer base. Firewood heats homes, helps prepare food and produce charcoal – just to name a few applications. Understanding why your clients burn firewood is the key for better profits and improved customer service.
In this article we will cover the most typical segments in the firewood market.
For heating – Large predictable quantities, small profit margin
Catering to the heating segment allows your business to grow in size but offers the lowest profit margins. After starting your firewood business make sure to contact all your neighbors and map out all the wood-heated houses in the proximity of your firewood yard. Find customers that purchase in large quantities and try to get pre-orders by offering campaign prices to level out the peak season.
Many customers will accept large firewood pieces that burn slowly through the night mixed with some kindling. However, a growing amount of customers require smaller sized firewood that fits in small wood-stoves and burns with more efficiency. Keep in mind that your older clientele might not be able to carry heavier pieces of firewood inside their house either.
For atmosphere – Small seasonal quantities, high profit margin
A large portion of firewood customers rely on different primary heat sources. They still might want to buy small quantities of nicely split firewood to be used in fireplaces for cozy atmosphere or additional heat during colder periods. This segment is willing to pay higher premium for quality, great service and fast deliveries. Make sure to offer a stacking service or use firewood bags to avoid leaving a mess on customers’ lawns.
Always keep some stock in case of cold spells as these customers tend to run out of firewood quickly. It is challenging to build up clientele in this segment without a well-known brand name and necessary investments in marketing including ads in the local newspaper, internet visibility and roadside signs. Do not forget to target resorts that have fireplaces and offer firewood for their customers.
Wood-fired restaurants – Profitable long-term accounts, high quality requirements
Restaurant accounts are demanding but generate high profit margins. If you are willing to prioritize punctual weekly orders and stick to the delivery schedules, these accounts can become real moneymakers. Your firewood should be of the highest quality (precisely cut and split). These accounts usually burn only specific firewood species.
Missing a delivery easily results in losing the account as restaurants often have relatively small storage spaces. Succeeding with a reference account makes it easier to attract new ones.
Campgrounds – Great accounts for off-season
Having a number of campgrounds in short driving distance from your operation is great because they can fill up your order base during summers when the rest of the market is slowing down. Campgrounds might buy anything from kindling or bundles to a firewood crib filling service. Order quantities might be small but frequent orders and a large customer base keep your firewood yard busy throughout the summer.
Retail stores – Profitable accounts with strict requirements
Supplying firewood for retail accounts can be highly profitable but the competition is fierce. It is best for small businesses to focus on locally owned grocery stores, gas stations, bait shops etc. If they have an existing supplier, try to offer them better service or higher quality bundles that feature higher profit potential and make for a more attractive storefront.
Securing a large retail store account usually means that your firewood business already produces thousands of cords and has multiple full time employees making bundles. To have a profitable business and keep up with the demand requires not only having the right equipment but also a good and reliable supply of right sized logs for cost-efficient bundle processing. Most such businesses own a kiln for faster drying and have the necessary certificates for retail sales and transportation across state or international borders.
Focus on quality. Consistently split firewood makes bundles more attractive and allows you to raise your prices.