You might have heard us at RMFP throw around the term “Mill-Direct”, before but might not be clear on what it actually means. Have no fear! We are here to help break it down and explain why it should matter to you. We are different than other lumberyards and building materials suppliers in that we purchase our materials differently to bring more savings to you- the customer!
A typical (non Mill-Direct) lumber distribution chain looks like this:
- Forest to Logger
- Logger to Mill
- Mill to Remanufacturing Facility – (Depending on the product and this is sometimes combined and part of the mill)
- Remanufacturing or Mill to Distributor
- Distributor to Retailer
Let’s define some of these terms:
Forest: Forests can specialize in different types of trees like cedar, redwood, douglas fir, or pine. These are found with any company or organization that owns timber rights. They are responsible for planting, maintaining and protecting this valuable natural resource.
Logger: A logger is defined as someone who aids in the process of cutting trees, processing them, and moving them to a location for transport. This is the beginning of the supply chain that provides raw material for many products we see in lumberyards across the country.
Mill: Also known as a sawmill or lumber mill, this is the facility where logs are cut into lumber. They use a motorized saw to cut logs lengthwise to make long pieces, and crosswise to make certain length depending on standard or custom sizes they are responsible for providing. Many times, they are able to take specific requests for profiles of siding or decking, but not always.
Remanufacturing Facility: Here, they take the blanks or cants that the mill has leftover from processing the material from the logger and turn it into the final product. It could be tongue and groove, decking, or a 2×4. Depending on the product, it must go through a remanufacturing facility to finish it off. A beam for example, does not usually need to be remanufactured but other products like those mentioned above need to go through that process because they need additional cutting and finishing. A lot of mills and even distributors have a remanufacturing facility at their location, so it doesn’t need to go off to a separate site- but it is an important step in the manufacturing and distribution chain.
Distributor: A distributor offers the logistics from the remanufacturer/mill to the retailer. They have a network of warehouses set up throughout the country in major markets. They are set up to sell the product to the retailer, the ones that then sell it to the public. They typically act as a wholesaler too by offering a lot of different products from different companies. These brands can now sell their products across the United States without having physical locations in every city. It’s all done through the distributor.
Retailer: A retailer is the final stop in the lumber distribution chain. This is where contractors or homeowners can buy the final product in cities around the country. Big box stores and RMFP would fall under this category.
There are a few idiosyncrasies that happen, despite the traditional supply chain outlined here. There are some hybrid situations where the distributor can act as a wholesaler and may sell direct to contractors, but they may not sell to the public. They are technically considered a wholesaler, but not in the true interest of the homeowner who wants to be able to purchase in the retail sense. This requires homeowners to purchase materials through their contractor who would purchase it from their distributors. Examples of companies like this are: Master Halco, Builder’s First Choice and ProBuild. The end user can expect an additional markup that their contractor puts on their final price, because he is buying the materials for them.
Keep reading for Part Two of Why Buying Mill Direct Matters as we show you the difference that you get when purchasing materials from Rocky Mountain Forest Products. We’ll discuss the percentage of our yard stock that is purchased mill-direct as well as explore the benefits that working with a mill-direct retailer can have on your pocketbook. As always, if you have any questions about our process, give us a call!
