Monopolistic wood prices

[Rich Konopka]

This week I purchased 4 sheets of 1/4” pre finished birch plywood from a local supplier for $19.28 a sheet. Orange box sells a 1/4 purebond unfinished birch for$49.68. The 1/4 inch Sandply is $29 or should I say 1/5 inch is not comparable because of the thin veneer and it is not birch. If you look at the other blue box stores wood the prices are identical.

In fact, they are all using web scraping for pricing their products. Even the jungle prices are identical for many tools.

Are these monopolistic collusion pricing policies or modern day capitalism?

[Richard Coers]

Once they established the price matching policy, they have to be the same to eliminate all the labor of checking prices and giving a discount. My theory anyway, and much less of a conspiracy theory than yours.

[Doug Garson]

The tin foil crowd I'm sure will call it monopolistic collusion, those with common sense will agree that when your competition publishes their price and you publish your price, they will affect each other ie modern day capitalism. The exception seems to be car prices on Autotrader. Prices are listed with a comparison to market price and yet there are listings which claim to be thousands of dollars under or over market price. Under I can understand if you're looking to sell fast but over?

[Rich Konopka]

I don’t think it’s so much a conspiracy theory but a fact that they are all pricing the same and control 90% of the market. Why is my little local supplier so much cheaper? Did they get a better deal that the Orange box or the blue store?

[Doug Garson]

Could be the big box stores set prices to be competitive with their competitors and don't consider the small local suppliers to be big enough to be their competition.

[Michael Rutman]

A lot of big chains have price matching. They can do this two ways, have different models of the same basic thing that is sold only at their store (appliances) or have their web sites match prices. As far as local, the big chains have to sell at the same price nationally or people will just use their web sites.

The big chains also have the same suppliers and have the same markups and the same costs, why wouldn’t the same product be the same price at two different chains?

When you see prices go up at the same time it’s because the big chains all announce how much they are raising prices months in advance.

[Richard Coers]

The tin foil crowd I'm sure will call it monopolistic collusion, those with common sense will agree that when your competition publishes their price and you publish your price, they will affect each other ie modern day capitalism. The exception seems to be car prices on Autotrader. Prices are listed with a comparison to market price and yet there are listings which claim to be thousands of dollars under or over market price. Under I can understand if you're looking to sell fast but over?

I guess I have to use that tin foil hat comment next time, instead of actually saying conspiracy theory. LOL

[Jamie Buxton]

Watching your competitors’ prices is not new. It has been going on darn near forever.

Anybody remember the gas price wars? When one station dropped its price from 20 cents per gallon to 19 cents, immediately ever other nearby station did the same.

[John Kananis]

Local place just quoted me 250 bucks a sheet for walnut ply. (5 ply). Umm, no.

[Rich Konopka]

Local $173 for A-1. You can’t even get walnut 4x8 plywood at big box. So yes

[Darrell Bade]

In many cases they have trained the public, especially in the cities. Borgs are the cheapest, Amazon is the cheapest etc. and run a lot of places out of business while doing it. I have a local lumber yard that sells a better grade of construction lumber or hardwood plywood for the same or within pennies of the borgs. Everyone might not have this but many do. Amazon is not the cheapest any more but everyone has been trained to think they are, I refuse to order anything from Amazon except as a last resort but many go there and nowhere else. The retail market has changed and many have gone the route they programmed you to go.

[Richard Coers]

Local $173 for A-1. You can’t even get walnut 4x8 plywood at big box. So yes

You can in Peoria. Screenshot 2023-08-20 at 11.17.10 PM.png

[Kent A Bathurst]

Main-stream lumber and plywood are basic commodities. Dunno about the hardwood or hardwood ply markets.

Industry supplier [ie - lumber mills] pricing data is collected and published every Friday as a regional composite number, creating a new cost basis for lumber for the coming week. Lumber and pressure-treated inventory turnover is so quick that prices can be reset weekly, knowing that any out-of-range inventory in the stores will soon be gone [for the broad product category] so that works.

Not so plywood. The cycle from plywood mill acquisition through production, inventory, sale to distributors, inventory, sale to retailers, inventory - all this is very long in comparison. There is a weekly index that is used for mills' sales, but the chain is broken there.

The retailers want a "known cost" for a longer period of time than a week, because their inventory will last longer. The distributors have to bear the burden of weekly market changes, keep a stable price for X period of time, and NEVER be short of filling an order from a store. NEVER.

So things get balanced out - the distributors have to decide what price they are comfortable with, for the inventory they will have to carry over X weeks/months, knowing their costs will change, and negotiate based on that. The gamble is right there - in the longer haul, will you [distributor] win the mill cost fluctuation game v. fixed sell to retailer - more often than you lose?

The retailers are not in cahoots. The retailers don't all have the same margins on all items. The buying public have not been brainwashed. The mills ae not in cahoots - its a commodity at their level. The distributors are not in cahoots - the big retailers would sniff that out in a heartbeat.

There is a lingering shortage of plywood production capacity, because the plywood mills have finally wised up, and they like it this way. With price spikes, it used to be a rush to open closed mills or build new ones, perpetuating the boom-and-bust cycle This time, they are moving more slowly.

[Bert McMahan]

In many cases they have trained the public, especially in the cities. Borgs are the cheapest, Amazon is the cheapest etc. and run a lot of places out of business while doing it. I have a local lumber yard that sells a better grade of construction lumber or hardwood plywood for the same or within pennies of the borgs.

Part of the issue is that lumber yards aren't accessible to hobbyists with "regular" jobs. I'd love to use a local lumber yard, but the only ones near me that I can find are only open Monday through Friday, roughly 7 or 8 to 4, when I have to be at my actual job. I'd have to take time off work or leave home super early to get to one, and with my situation (with two toddlers) the "early morning" option just isn't tenable for anything other than the most egregious pricing mismatch. So, I go in, grumbling that I'm getting a worse quality product for more money. I don't like it but I understand I'm paying for convenience.

My local Woodcraft is open later in the day and on weekends. They carry actual baltic birch, but it's about $8.20 per square foot for 1/2". My local HD has "hardwood" 1/2" plywood for $1.40 a square foot. Nearly 6x the price for Woodcraft (at least for their online prices). So, I use Woodcraft when I really need something nice, but if I'm just building some simple boxes then I'll use HD or Lowes. (For reference, I don't have a Menards near me... their 3/4" walnut plywood Richard posted is only $4.71 per square foot- about half the price of Woodcraft's 1/2" birch plywood).

I certainly agree with you about Amazon, though. Since I'm ordering it anyway I'll try hard to order anywhere else. They have so much lowest-bidder crap on there it's hard to find something with any actual quality to it.

[Kent A Bathurst]

Part of the issue is that lumber yards aren't accessible to hobbyists with "regular" jobs. I'd love to use a local lumber yard, but the only ones near me that I can find are only open Monday through Friday, roughly 7 or 8 to 4, when I have to be at my actual job. .

Sorry, Bert, but you and I ain't the customer base they are targeting. Heck, they don't mind us but they don't really want us. They are going for the Pro customers.

The ones that buy a unit of ply, not 4 sheets. The ones who understand what lumber is and how it works, and take the first 50 pieces off the top of the unit, not sorting through 50 to find the 3 that meet our standards. The wane and the knots don't matter to them. They can cut around it for header stock, or window sill cripples, or doorway jack studs, if they need to.

The $15,000 per week people, not the $150 every 3 months people. Both consume the same amount of employee time.

And 7-4 are the hours their customers work. Buying materials is part of their customers' job, not their after-hours hobby like you and me.