Apple
RSS Feed
building an indie business in the center of venture capital. I am Alex Edmonds people on the internet. Call me supremerumham. And this is the building an indie business podcast. All right. Okay, so this is part two of the Christmas tree Episode Episode. So I'm going to be talking about the types of trees. The tools that are used a little more about maintenance expenses are some revenue ideas that I came up with the Rockefeller tree and Christmas trees and the coronavirus COVID-19. I am going to give you a little bit of facts on that, and how it changed in that time, and then I have my opinion about that. So okay, let me get started. Now I said in the last episode that I should figure out. Like, what makes each tree different, or like what makes them different from each other. It's really just the size and the maintenance. So, the bigger the tree, the more maintenance is needed. The more maintenance, you have, the more expenses you have. And the more expenses you have, the more money, a tree needs to be priced for, and to make the same amount of profit. Right. That's the main difference scotch pine is the number one Christmas tree species. So yeah. And so, for tools. There's a, they need to, you know, maintain the tree they need to cut it up and shape it and everything. So they use head to head hedge trimmers handheld knives or rotary cutting heads, powered by small gas engine or electric battery. And that's the maintenance tool tools that they use. Right. And then there's the cost of maintenance. So, their site preparation which is like getting the dirt ready, cutting the grass, making the soil is good. And that costs about 10 cents per tree. And if you remember from last episode, I said that to one acre has about 200 trees. So, do you want to do. 10 cents. times. 200. That's $20, an acre. Right. And if you have like 10 acres that's $200. Just in site preparation. And then there's planting, which is 12 cents a tree replanting, which is when you dig it out, and then put it back in. Right. That's 42 cents a tree. Then mowing, it's four cents a tree weed control. m. That's four cents a tree, again, and then there's cleanup which is 12 cents and I don't mean weed control by like, Hey man, weed. I'm saying like weeds, like, the things that grow automatically when you plant something and you want to get rid of them. Because I'm like mice, and other animals hide in them, and they could ruin the trees. Right. So then the order the tree gets more sharing needs to be done, because the branches grow, and more needles and pines and leaves grow and cones. So you need to maintain that. Right. So I didn't mention cutting cleaning and baling or hauling and loading. That's because all three of those expenses are fixed. They don't change. If the tree grows, it's all the same. Right. So, the major expenses of a Christmas tree farm are the sharing the weed control and costs related to harvesting cutting cleaning baling and loading. Right. So I talked about all of that stuff, basically. Yeah, that there's other expenses right like personnel or tools. Or like, you need to have an office space I guess so. You need to have that on site or nearby. But those things, sharing weed control, and the other triolet related expenses, let's call them. Those are the biggest expenses. Um, I have some revenue ideas that I thought of. These are new, these are different, right. So, I got you. So, actually in my research I saw this, but these are usually for the bigger Christmas tree farms. So, I thought about having a subscription, where it's for people that want a real tree, but don't want to go to the farm. So, for the subscription. You can either have people come pick up a tree to pay like $75 for that. Every year, and just email them, do they want to renew it, or have a delivery system with the subscription. And the Christmas tree farm charges like maybe $150 to go to someone's house drop off the tree and set it up. Maybe even 200, and maybe for 250. Get a decorated tree. Right. But I know that. Usually it's like a whole ritual to to decorate a Christmas tree. Right. So, maybe people don't want that option, but we all know there's some people that just like, do something for the sake of doing it. Like, just have it to maybe show off, even then they don't really care about decorating it themselves. Those people pay to get a decorated tree delivered to their house because they would be willing to pay the money to not have to deal with that. Right. Um, so yeah, there's that option. And then the other revenue idea I had was an e commerce store. And what I mean by this is like taking pictures of the trees and delivering them through the mail. Right. One issue that might that might occur with this problem is shipping. How do you like the shipping might cost a lot for a Christmas tree. I'm not entirely sure I did not look that up. Um, so yeah but based on weight and size. It's gonna be awkward. And then you need to maintain it right in our how airlines generate revenue episode, we uncovered the fact that there are special services that the airlines will provide. But how much extra is that going to cost compared to like, Just shipping it as a regular item. Right. So maybe if you're shipping it from Santa Cruz to Texas. It might not survive. Just regular shipping so you need to get that fancy curated shipping like Korean is Korean word, I don't know, let's just say courier courier. That's the word I was looking for. Um, so yeah, That's another idea, ecommerce store. Okay, so I looked into the three options of selling a Christmas tree and I got a little more details about which one was more profitable. So, if you remember there's a cut and choose which is you go to the farm and you cut down the tree yourself. And then there's retail, which is you sell it, like on the side of the road or you have your own lot, and a parking lot. Usually it's like another side the road, let's say it's the side of the road. And then there's wholesale where you sell it to like, insert your favorite store here. Um, so yeah. Um, so, I discovered that. Like I said in the previous episode, choose your own cut generates a four to 515 percent higher return than wholesale operations. They talked about the Frazier for, but it's also four to 3% higher for scotch pine, which is the most common Christmas tree. Then there's a higher rate of return. Because you're able to sell the Christmas trees at a higher price. Right. Um, yeah. The, the one difference between the, choose your own cut and all the others, is you may need to hire more people. Because you can't have, like, people who don't know how to cut a tree down, doing it themselves. So what you got to do is you got to keep an eye on those people. And maybe if they have their kid by train, train on their own, you have to stop them from doing that. Or make sure it's under control, because that's a liability for the farm if something happens to that kid. Right. They might blame the equipment or something else, but it's a kid like they don't know how to do things you have to do have to learn on their own, but not on, not on your farm. Dude at another farm right shift that liability somewhere else. So yeah, you need to hire you need to hire personnel if you do a choose your own cup. Um, yeah so that's critical. And it's not just like one person. It's several people, their hourly rate, but you need to hire a bunch of people. And that's an expense that a retail, or a wholesale operation will not have. Because if you're on the side of the road, they're already bailed and ready to go. And for wholesale. It's not your problem. Right. So that's critical. But you have the option to with choose your own cut. Choosing cut, not choose your own cut. See I'm thinking about, choose your own adventure. And then, so I want to say, choose your own adventure and I cut it off. And I say, choose your own cut, which is not what it's called but it's close to all it's called choosing cut choose your own cut. Right. Um, I totally got okay what was the same. Oh yeah, with choosing cut, you have the opportunity to add different products, so you can sell wreaths, or you can sell like crafts. You know stickers t shirts, things like that which you wouldn't be able to sell for wholesale. Maybe for retail but definitely not wholesale, because the retail. Now the wholesale company wants to sell the trees as their own. So you can put your little supreme realm ham. Christmas tree farm sticker on it. Right. But you can do that with retail. Yeah, so that's another option. Okay. Um, also with wholesale. There's a, there's more responsibility. Right. Um, you have to cut the tree, which is something you don't have to do for, choose your own arm you have to bail it up, you have to do that for, for, for the other options, right. Then you have to move the tree to roadside. Oh yeah, you have to you have to bail it up. And then you have to ship it to the wholesaler. So that's whole thing you have to bail it up, loaded into your truck. Maybe even unload it. So yeah, that's something that you don't have to do for choosing cup, because you have to build it up, but then someone else is putting it in their car. And then they're unloading it themselves. Right. So that's one thing. Okay. Um, the Rockefeller Center. Christmas tree arm so that Christmas tree was 77 feet long. It would cost normal person about $75,000. On the cost of the tree to maintain it and run it while it's on display. I couldn't get an accurate number on the, the lights, because it's solar powered, but there's 50,000 lights on that tree. So yeah, that's some fun stuff. Yeah. All right, so Christmas tree. Christmas trees and coronavirus COVID-19. I did some research. All right, and you're gonna hear about it right now. As soon as I'm done. Doing this bit. Okay. So the prices of Christmas trees went up in 2019. They were about $65. And this year, they were 75 around there like the average price because more expenses. You know, it's a. They had to shut down and then pick back up and make up for that money so they charged a higher price. No surprise. But, um, the Christmas trees still sold out, and even earlier than usual. So, they usually start selling Christmas trees the week of Thanksgiving. And some farms and retailers. Were getting people before the Thanksgiving holiday. They, they were asking to get a tree. Right. So, usually they sell out and like December 20 December 22 around there, some Christmas tree places of sale, were selling out in like early December, because they had those, maybe two extra weeks for Thanksgiving, so that makes up for, you know, the tail end of Christmas, like instead of selling out in the 20th you have that extra week, so you're clearly going to sell out a week early. Right. And choose your own cut is a low risk activity, and these times where we have to socially distance ourselves from strangers. Um, yeah so going out to a farm and picking your own tree that in the mountains right you're in the mountains, at least Here you are. So yeah, that's a low risk activity for catching coronavirus I shouldn't say like that actually. Um, so yeah, that's another thing, and then choose your own cut was very popular this year, or choose choosing cut. Um, and I think. Yeah, they. I think they inherited customers from like the less safe activities like retailers, or side of the road people, because you don't have that distance right when you go pick out a Christmas tree at a retailer. You. You were like side by side with people. So, That's a less safe option right so I think some of those people, they did choose your own cut and send or choose and cut. So yeah. And then this is exactly what I was saying about the Christmas tree. People see as an experience not as an expense. So I was saying that Christmas tree farms can help make it more of an experience by like selling hot chocolate or donuts or, I don't know, getting selling t shirts, and then they'll be like, oh yeah. Remember that time we might encounter our own Christmas tree. Every time they see that tree. So yeah, and my opinion. Um, So, I think that people. The one that one of the reasons Christmas trees sold more and this is my opinion, because, um, some people may not have even gotten a tree in 2019, because you know, they go they go away for the holidays so like that Christmas tree is the Christmas tree from where they're going. So like last year I went somewhere for Christmas. And I, our family didn't get a tree, because we were going somewhere else, and we didn't have time to get a tree, and we were coming back super late. In January, so we didn't have time to dispose of it and take care of it, like he should. And so, that Christmas tree, on, on the other side of the US, on, on the East Coast was our Christmas tree. And I think some people who also do that activity of going somewhere else. They got a Christmas tree this year, because now they're home so they need their own tree. So I think that's another reason that Christmas trees. Got a boost in sales this year. Okay. Um, yeah, that's all I have for this episode. Thank you for listening. Have a nice day. Bye.