Brussels Quaratine Maples and Pines

In economics, that concept is called arbitrage.
Don't misunderstand... There are huge costs involved for Brussel to be able to do this. Shipping, setting up a dedicated greenhouse, even having a dedicated incinerator to burn the packing boxes. Required inspections, permits, regulation compliance. And loss. Even in the pictures, there's a couple JBP turning yellow. And then there's the wait. They can't be sold for two years. So, he has his capital tied up for two years. It's an expensive endeavor. And there's probably costs I haven't included: electricity, water, employees, soil, pots, etc.

I understand that they're taking deposits, or advance purchases, to reserve a tree. If it's alive in two years, you take it home. If not, there's a refund policy.
 
Don't misunderstand... There are huge costs involved for Brussel to be able to do this. Shipping, setting up a dedicated greenhouse, even having a dedicated incinerator to burn the packing boxes. Required inspections, permits, regulation compliance. And loss. Even in the pictures, there's a couple JBP turning yellow. And then there's the wait. They can't be sold for two years. So, he has his capital tied up for two years. It's an expensive endeavor. And there's probably costs I haven't included: electricity, water, employees, soil, pots, etc.

I understand that they're taking deposits, or advance purchases, to reserve a tree. If it's alive in two years, you take it home. If not, there's a refund policy.
I'm guessing there's $50,000 of fixed costs in greenhouse, facilities, labor, etc to house these trees. There's roughly 160 trees. At a retail value of $3000 each, that's about $500,000 of inventory.

I have no clue what it cost to ship these over here. It's not simply just crating them up, they have to be inspected and treated for disease before leaving Japan, roots barerooted, wrapped in wet spaghnum, then crated. FedEx, local delivery, un crated, reinspected, potted...

Let's say DJtommy is correct, the retail price for these in Japan is $50,000. Then greenhouse is $50,000 (probably more) shipping??? Let's figure $50,000. Interest on 150,000 investment @10%, for 2 years = 30,000. Plus ongoing utilities, labor, taxes, inspections: $20,000

That adds up to $200,000. Before inventory loss cost. And he wants to sell them for $500,000.

Actually, that's pretty reasonable. Considering all the headaches involved.
 
Yeah, im sure its a big pain in the ass, all the paperwork, shipping etc. Its a lot of work and also a risk. I bet it brings a lot of stress to the seller.
 
when you extrapolate costs of trees versus time spent to bring it to point of selling, you're losing anyway........................2000.00 tree, 30 years of labor to build it and you end up with about 67.00 a year for labor. Then break that down into a day rate, you end up with 19 cents a day to put in your pocket. In that light..........we're really raking in the profits!!! You take a operation like Brussel's and consider the overhead..........WOW!
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These trees are worth whatever people will pony up for them. I don't think they are terribly overpriced for the quality, and the overhead involved.
FWIW, Don has, and has had trees every bit as good as these. I don't see a one of them that can hold a candle to the piglet...
Just sayin.
 
Don't misunderstand... There are huge costs involved for Brussel to be able to do this. Shipping, setting up a dedicated greenhouse, even having a dedicated incinerator to burn the packing boxes. Required inspections, permits, regulation compliance. And loss. Even in the pictures, there's a couple JBP turning yellow. And then there's the wait. They can't be sold for two years. So, he has his capital tied up for two years. It's an expensive endeavor. And there's probably costs I haven't included: electricity, water, employees, soil, pots, etc.

I understand that they're taking deposits, or advance purchases, to reserve a tree. If it's alive in two years, you take it home. If not, there's a refund policy.
Which is why it's not specifically arbitrage. Even before overhead, he has to cover the expected mortality rate. When I had accounts in Memphis, I watched a full shipment of Doug Paul imports die slowly over 18 months. Some of the best Mikawa JBP, and biggest corkers I've ever seen. Easily 70% died over the course of the first year.

Quoting yourself is only a step away from referring to yourself in the 3rd person...careful, you're on a slippery slope!:p
 
Which is why it's not specifically arbitrage. Even before overhead, he has to cover the expected mortality rate. When I had accounts in Memphis, I watched a full shipment of Doug Paul imports die slowly over 18 months. Some of the best Mikawa JBP, and biggest corkers I've ever seen. Easily 70% died over the course of the first year.

Quoting yourself is only a step away from referring to yourself in the 3rd person...careful, you're on a slippery slope!:p
Lol!! I didn't really mean to quote myself. Just hot that little button out of habit!

But, yes, you are correct. Not purely arbitrage! Which is why I posted with my speculations as to the costs involved.

And the mortality rate is horrible. More so with the pines than the maples I would assume.

It is possible to do the quarantining in Japan. Then when they get here, they can be sold to a final consumer immediately. But that isn't any better mortality wise. Bjorn had a nice shipment of prequarantined JWP sent over last year. Maybe 10 trees??? I think only one survived. Or at least only one survived undamaged. On several, I saw whole limbs dying off, scattered all over the trees. Weird.
 
Lol!! I didn't really mean to quote myself. Just hot that little button out of habit!

But, yes, you are correct. Not purely arbitrage! Which is why I posted with my speculations as to the costs involved.

And the mortality rate is horrible. More so with the pines than the maples I would assume.

It is possible to do the quarantining in Japan. Then when they get here, they can be sold to a final consumer immediately. But that isn't any better mortality wise. Bjorn had a nice shipment of prequarantined JWP sent over last year. Maybe 10 trees??? I think only one survived. Or at least only one survived undamaged. On several, I saw whole limbs dying off, scattered all over the trees. Weird.
Why even bother?
 
I think Adair's greenhouse figure is very low. Probably more like $150-$200k. But, its also a fixed cost.
You also need to account for the cost of the buying trip. These trees don't just magically appear. Business is done in person and each tree is picked out.
You would need to have a good chance to at least double your money in order to even consider assuming that risk.
These trees come bare root. That means 0.0% of soil. You can't fudge because the entire shipment will be rejected if a single tree is not barren of soil. With this volume and these $$$ numbers you can't mess around. Trees like to have soil, and some don't respond well when deprived of soil for days or weeks. Maples do better than JWP so success rates are better on maples than JWP. You still suffer losses. You'll notice many of these trees are well branched. The more branches the more likely you will lose branches. There is a complicated process that goes on under the soil to support all those branches. But there's no soil. JWP are like that tree in the harry Potter movie; thriving and beautiful one moment and then next moment, spontaneous defoliation....
Huge risk involved.
 
Maybe money does grow on trees? How would I feel when the neighbor's cat knocked one of these over? Happened twice so far...
 
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