Assortment sale vs standing sale - advantages and disadvantages!
The forest owner is selling the cutting right to growing forest. The cutting right is giving the right to fell the timber on a fixed area, that is defined by the valid felling permission, giving the legal right to fell the trees. For this type of sale, the cubic metre outcome is not relevant, because price is agreed based on the valid felling permission and the area. This is a quite common sales type among private forest owners, usually at auctions (auction platforms or targeted offers). Owner gets money after signing the contract with the buyer, before the cutting works start and the timber is realised.
- Fast - money transferred to owner’s account after signing the contract with the buyer
- Weather is not a limiting factor
- Prices are based on current market situation
- Surveillance - the forest owner has to do that on his own: quality of the fellings; is the material kept in the indicated area?; is the work done correctly, not damaging live trees etc. This type of agreement does not mean that the buyer will do the fellings straight away - it can take up to several years until the area is felled (due to market situations, weather etc.)
- Felling period can take several months (due to the market, weather, finding contractors etc.)
- Prices can be changed during the felling process - forest owner could earn less money or more money, it depends on the prices achievable when the material is cut and transported to the buyer
- Requires more work - organising all the logistical works, starting in the forest and on to the way to the buyer’s market place