TOPIC: Ginseng Rumors???

one thing for sure is without the diggers they get no root and with that being said many of us have run into less than honest ginseng buyers!maybe the diggers can start a union to insure fair prices

My question. How much would an honest dealer make per pound? I would think 35 to 45 dollar range per pound at that moment of purchase?

Yellowscarf,

We have gone around this tree trunk many times. What is fair? It is a subjective and highly perspective-related measure that is never named in dollars and cents, and never lasting from one moment to the next.

Look at it this way, if you bought a stock or bond which was projected to make 7% per year, but returned below that for several years and then made double that, would you be calling your broker to return the over or \"unfair\" payment?

When I was a home improvement contractor, I walked away from someone who said they just wanted the job done \"right.\" Again, highly subjective and this was normally a HUGE red flag that the guy or gal would be dogging me all throughout the job because they had no clue what was really going on and what was or was not considered 'right' in the industry.

I too have met with dishonest folks in the fur and ginseng business. To me, dishonest is someone who will pay the guy in line behind you $10 more per pound for ginseng that is identical in quality, just because he thinks he can convince you to take less -perhaps by being dishonest in what he is saying to you at the time.

I think dishonest dealers could be summed up as those who would take advantage of someone if the opportunity presents itself. This is completely different than trying to work a deal which both can be happy (or sometimes both unhappy) with. When I am buying, I am looking for a win win deal. I wont' grow my business if I am getting a great deal at the expense of you getting a crappy deal. On the other side of that same coin, I can't afford to get crappy deals just to keep you happy either.

Rickyc,

Again, this is a subjective thing. I bought stuff last year that I lost money on, and some I only made about $20/pound on at the end. The best guide is to realize that nothing is worth more than someone is willing to pay for it no matter what anyone says.

There is never any guarantee that prices will increase (or decline either for that matter). We can only look at the market conditions as with any commodity, and made the most educated guess we can on the current conditions -conditions which might change completely tomorrow. I for one do not buy on speculation. I know what I\"m getting if I sold today or tomorrow, and that is on what I base my buying. It is seldom I buy anything with out an order for it, and normally several others willing to pick it up.

To give you another example, a couple years ago I bought some stuff for $400/lb when the going price was about $650. I thought I had discounted it enough to be ok. However, I sold that for $180/lb. How many pounds at $35-45 taking out the cost of being in business (lights, autos, advertising, time, storage, drying, licenses, etc ect) will it take to make up those losses?

And...depended on how you answered that question, if I bought your ginseng today for $1000/lb and tomorrow the market broke to $500/lb ...would you show up and offer me a refund of $500/lb??

So, in the perspective of your question, the term 'honest' is highly subjective and prone to huge bias in interpretation.

Bcastle, what have you and others been seeing for plants on scouting trips? Good luck this year!

It's all supply and demand......plus quality of root! Dig small and beat the heck out of your roots and ya get what ya asked for! Do a good job digging and you will get the best price going!

maya wrote:

Bcastle, what have you and others been seeing for plants on scouting trips? Good luck this year!

It's all supply and demand......plus quality of root! Dig small and beat the heck out of your roots and ya get what ya asked for! Do a good job digging and you will get the best price going!

That is exactly correct Maya. Quality over quantity every time. If you call me on the phone and tell you going price is $600/lb...but when you get here you have a bunch of small stuff or stuck that is boney and is not properly cared for...you will not be seeing $600/lb. I am not trying to take advantage of you in that case either.


I've not had a chance to scout at all Maya. I did check my stuff a week or so ago and it is doing wonderfully. Well, with he exception for the awesome spot I put in about 8 new beds...which turned into a river with all the rain we had as the water washed down the hill. Lots of little 1yr woodsgrown roots barely hanging by the wee tip of their roots in that spot. However, the wild sim spots really looked good. No disease noticeable, and they were starting to set ripe berries already. A good year for growing overall I think.

Yes honest was probably not the best choice of word. But they must be a number that a fair dealer would shoot for? Say one that buys many pounds a week and moves it weekly as one I know does here, he surely has a idea of a profit needed for a win win for both. Now if one wants to play the game and hold, the digger should not be responsible for that I wouldn't think.

It was a curious question from my point and not meant to step on any toes.

You are fine Rickyc. Its an honest question.

The thing is, there are different ways to look at this issue.

For academic argument, lets say we set \"fair\" at $40 over what we paid for a pound of ginseng. That's about 6 3/4% of $600. Out of that, you can probably realistically take out about half of that or more as going to overhead. But, for simplicity of argument, we will assume there are no costs in doing business, and no nasty turns in the market, and will assume that the buyer makes that whole amount on every pound.

Now, first of all, ginseng is very difficult to hold over legally and not lose at least 20-40% of its value. The paperwork alone going to the US F&W Serv, the USDA, etc, make it a nightmare to buy or sell anything left from the year before. This means that realistically, buyers and brokers do not have the option to hold ginseng past a certain point in time waiting on better market conditions. This is important. This means the buyers and brokers must sell in the current year under current market conditions or risk losing 40% or more.

Now, bear with me here. 7% of $100 is $7, 7% of $1000 is $70, of $10,000 is $700, and of $100,000 is $7,000. When we look at it this way, ask yourself this question and answer it honestly...would you invest your total yearly income in a market commodity which is strictly seasonal, perishable, and basically wildly uncertain year to year, in the hopes of a 7% return (not considering your overhead)?

Some will say sure, that's more than the bank pays. Ant they would be right...at the present moment in our current economic state. However, your money is relatively safe in the bank. Move to the stock market, and things become a bit more dicey. There are opportunities for greater rewards, but at the same time many more opportunities to lose everything you invest.

Now, put yourself in the place of that ginseng buyer who is investing a sizable amount of money to buy ginseng. One one side, the folks who buy the product say they will only pay this much for this much. On the other side, we have diggers who think we are trying to cheat them when we pay as much as we can when they bring us their ginseng, but then the market unexpectedly climes a week or so later.

As a digger/grower, I try to sell my ginseng at a fair market price. I know the quality, and know what it should be worth in the current market conditions. I won't take $100/lb less than its worth. But, being offered $100/lb less doesn't necessarily mean that buyer was trying to take advantage of me either.

As a buyer, I am competitive, and will pay as much as anyone in my state. Sometimes that means I make much less than 7%, because some guys buy on speculation. They think the market will go up (sometimes regardless of the indicators) and will pay more than the ginseng is currently worth. Another tactic some employ is to buy as much as they can at lower than going prices at the opening of season, and then push the prices higher by paying more than the market situation warrants, so their competitors will have to match their prices. This in turn makes the stuff they bought very low early on worth much much more than 7% over what they paid.


So, with all this stuff in mind, can you see why \"fair\" and \"honest\" are subjective terms and really depend entirely on the current conditions and circumstances?

I'll tell you this though, the thing that really burns me is the diggers who suggest a buyer is dishonest or somehow cheated them because they sold ginseng in September at the top going market price of say $500/lb, and then found out their brother-in-law sold in October for $600/lb based on the current market at that time.

The folks who say they are holding onto their ginseng until the buyers pay what it is worth are just clueless of the way the market system works and the whole economic process in reality. This stuff goes much farther beyond simple supply and demand.

Every year on here we see guys posting pics of there seng beat up bad, it never ceases to amaze me. Some of the same people are whining about prices. Lotta young root being posted too.

BC, does any of that bad root go out of this country?

BCastle,

The many problems that you list with being a Dealer, trying to be honest when a few other Dealers are not, the fluctuations in prices and because I do not have the needed contacts, are the very reasons that I have never became a Ginseng Dealer! I buy, sell and trade collectibles and many other items including lots of coins. My' daughters say that I am too honest and too willing to take less for many items and if I did not, I could make much more. Well, I often deal in volume just like you and other Ginseng Dealers and sometimes it is good to take a little less to move more inventory. At the same time, sometimes it is not good to do so. I truly understand the dilemma that you and other Ginseng Dealers are faced with!

I know that all too often, there are those (diggers) that harp on Ginseng Dealers and not getting a fair price for their' Ginseng and sometimes I am one of them! However, even after digging and selling Ginseng off and on for some 44 years now and dealing with many good and quite a few bad Ginseng Dealers, I still try to be objective and not harp on all Dealers. I know that when we do so, it appears that we are calling all Ginseng Dealers as Bad Dealers but in reality we are not. Most base their ramblings on experience with a few Bad Dealers but sometimes it is our own stupidity that causes these feelings! Just last year, I sold all of my' Ginseng to a Ginseng Dealer (I will not name names) near me, only to find out the very next day, that someone sold their' Ginseng the same day to another nearby Ginseng Dealer at a rate of $40 per pound more than what I was quoted and got. Was the Ginseng Dealer that I sold to bad, no he was not and is not, as I know him and I know that he was only paying what he could based on what his' Buyers were paying him. It was my stupidity for not taking the time to check around but in my defense, I was not totally at fault for getting less for my' Ginseng because the Ginseng Dealer who was paying more per pound, is very hard to reach. I had tried to call him 3 times that week and without ever receiving a return call, I went ahead and sold my' Ginseng to avoid a possible price drop which I had heard rumors about.

While the Ginseng roots that I dig are usually not as big and a pretty as the Ginseng that maya digs, they are still no less vaulable to me! As you may know, I dig all of my' Ginseng with care and have been told that I wash too much dirt of of the roots but I do so because I like my' Ginseng roots to have a pleasing appearance. I have had Ginseng Dealers try to bad mouth my' Ginseng saying this or saying that or saying that I did not have a full pound, so they were only going to pay me a certain amount which was way less than the going price per and based on a pound. When I get this, I usually walk away to avoid getting into an argument or worse, a brawl with the Ginseng Dealer. However, one time, a Ginseng Dealer followed me back to my' car and actually held my' car door so that he could continue rattling off a bunch of sh&$. At this point, I pulled out my' big Buck #119 knife and told him to remove his' hand from my' car door, otherwise he would pull back a bloody stub. I don't care for these confrontations and that is the reason I walked away in the first place. However, I will stand my' ground to not sell to these kind of Ginseng Dealers as I know that there are other Ginseng Dealers out there that are fair and honest!


Frank

maya wrote:

Every year on here we see guys posting pics of there seng beat up bad, it never ceases to amaze me. Some of the same people are whining about prices. Lotta young root being posted too.

BC, does any of that bad root go out of this country?

Yes, I think it does mostly. But, consider this. If you are familiar with the workings (the way it used to be anyway) of the fur buying business, you know that most buyers worked on averages. For instance, they might have a contract for 50,000 coon at $11 nose count. In that make up, each bail of 500 had say 50 XXXL, 50 XXL, no more than 75 small or damaged and the rest between. Its been a long time, so those numbers are likely not accurate, but you get the idea. Now, the point I am making is that the contract is by the nose. So the XXXL A&B color coon are sold for $11 just like the damaged or smalls are. We all know that trappers expect more for nice color 3x coon than a small, however. So, you will often see buyers paying $14-17 for the 3x coon, and only $3-4 for the smaller ones.

The idea is to have an average of only about $9 or $10 (or what ever that buyer is comfortable with) in every coon regardless of its size or condition as long as you are not out of proportion with the bail make up. Certainly you lose money on the large, but you make money on the smalls. You have to look for the average.

Ginseng is similar. When ginseng is sold, it is sold in lots. Everything from fiber to large select quality roots are in the lot. The key is to determine the percentages of each rough classification. For instance, if there is 15% fiber by weight in a 100lb barrel of ginseng, priced at $600/lb, $9000 pays for fiber. But, fiber is only worth about $32-35/lb. So, you are paying $9000 for something that is only worth about $500. But, in order to get the middle grades and the high grades in the lot, you must buy it all. So, if you have a 100lb barrel of ONLY top notch select roots with no mediums, no fiber and no damage, you might be able to get a considerable premium over market price.

However, as it is, we have to buy the good with the bad and look for the averages. That is why small and poorly handled root brings the value of a lot down so quickly at every level dealer to broker. If a lot gets out of proportion high on the bottom or low on the top, the value is severely impacted.

So yes, most all of our wild is sold out of the country, good and bad. But, the bad stuff cannot be used in display cases and sold as gifts for high prices like the nicer stuff can be.