Small wood orders & Large wood orders: Which is better for wood business in 2024?

In the wood market, even the most experienced traders still have problems choosing between placing a large order or a small order. In fact, not all large wood traders place large orders, and not all small businesses place small orders. In this article, we will analyze the pros and cons of small orders as well as larger orders, so that timber traders can make better decisions later.

Wood market predictions in 2024

“Wood prices could increase significantly in 2024” – This is the title of the front page post of globalwoodmarketsinfo.com, and this is completely true based on the numbers on the wood market. Value added to the wood market in 2023 is 160 billion USD, the predicted number in 2024 is 167 billion USD, even in the following years, this number increases steadily and shows no signs of slowing down. These numbers show the sustainable development of the wood industry, not just a sign signaling the year 2024 is coming smoothly, but also the road after that. According to economic experts, the global economy will be warmer in the third and fourth quarters of 2024, leading to increased demand for wood in furniture production, project construction, etc. . We know the potential of the wood industry in 2024, let’s answer the initial question, so should we place large or small orders to suit the market?

Small orders & large orders: Which is better?

Small wood orders

Orders of 2 containers or less will be considered small orders, equivalent to 35-40 m3. For a leading enterprise in the wood industry like K-Timber, the total value of small orders usually accounts for only 20-30% of revenue but accounts for 70-80% of the total number of buyers and total volume. Average monthly order from 2000m3-3000m3. With nearly 30 years of experience in the natural wood business, below are some advantages and disadvantages when ordering small orders that I have compiled:

Advantage 

• Flexibility: Small orders mean the seller will be able to process our order faster. In the natural wood trading market, if you want wood with a length greater than 3000mm, the supplier will take more time to collect it, this is even more difficult for large orders. Time spent finding and processing wood can increase by 50%. In addition, if the market changes, you can transform yourself to better suit the market
• Better cashflow & risk management: “82% of small businesses that fail experience cash flow problems” – Zippo.com, For small wood businesses, starting with small orders helps them manage and rotate capital better. In addition, wood traders of course have an advantage in controlling risks compared to large orders. They can control excess inventory as well as outstanding debts.
• Reduced storage requirements: Smaller orders mean there is less inventory to store, saving space and minimizing the risk of deterioration or spoilage.

Disadvantage

• Higher cost: In B2B, the fact that you place a small order makes their price negotiating position lower when you place a small order compared to a large order. Of course you can still get a discount, but don’t get your hopes up unless there is a long-term commitment between you and the seller.
• Increased Production Costs: Some businesses may face rising production costs as producing fewer items may not leverage fixed costs effectively.

Who should place small orders? 

With the above advantages and disadvantages, placing a small order will be suitable for the purpose of ordering to test the source of goods from new suppliers, small-scale wood trading companies, and companies that want to test the market. with new types of wood. Whatever the case, start your first steps with a reputable supplier. In the African timber export market, K-Timber is proud to be the leader in exporting African wood to the world. With 20 years of experience reflected in export results to more than 40 countries, K-Timber can confidently support new or old businesses in the field of natural wood. Come to us to meet leading experts to help support the market, sales plans, and answer questions about wood.

Large wood orders

Orders larger than 2 containers will be considered large orders equivalent to about 70-80m3 of wood. Such large volumes require appropriate transportation and storage facilities, as well as more complex customs and tariff procedures. Below are some advantages and disadvantages when ordering large wooden orders.

Advantage 

• Easy to negotiate prices: In contrast to small orders, large orders give you many advantages when negotiating prices. Besides, you also have the ability to talk about keeping the price for the next orders, which is difficult to do with orders from 1-2 containers.
• Market Stability: Having a ready source of wood products helps you meet production or resale tasks better and more stably, contributing to long-term market stability.

Disadvantage

• Higher Risks: Large orders come with increased risks, especially if there are issues related to quality or shifts in market demand.
• Complex Management: Handling large orders requires efficient management systems for production and logistics, which can be more challenging.

Who should place big orders?  

With the above factors, placing a large order will be appropriate when you are a large company with strong financial potential, good capital turnover ability and incredible wood consumption ability. Besides, investors who successfully sign projects requiring large amounts of wood are also a suitable target. 

Conclusion

Placing large orders or small orders both have their own difficulties and shortcomings. “The best time to place an order is when you need it”, as a veteran wood trader, I recommend that you consider choosing to order based on your needs. compatible with the world economic situation. For example, the world economic situation is forecast to get better in the last 2 quarters of 2024 and usually the end of the year is also the busiest time for wood, I recommend you buy 1-2 containers at that time. In the first quarter, after testing and checking the market, you should quickly place a large order in the second quarter, so you will be able to buy wood at a good price when the market has little demand, and resell it at a higher price while market has much more demand. At K-Timber, we have the ability to provide you with Angolan softwoods & hardwoods at the best quality whether you order 1 cont, 10 conts or 100 conts. Get in touch now for the best price!