How do I assess a Christmas tree lot’s leftover tree disposal and unsold stock?

Unsold trees have no value after the season, so they are a cost more than an asset. Ask what happens to them: are they hauled away, chipped, donated or returned to the grower? Find out who does the work and what it costs, including any fees from whoever takes them.

Next, compare records. Match the number of trees bought with the number sold and the number discarded. If the gap is large, ask why. Was the lot overstocked, did the weather hurt sales or were trees lost to damage? Look at several seasons so that one odd year does not mislead you. Look at how the seller manages the end of the season. Do prices drop to move stock, and does that lower the margin? Is there a sensible time to stop selling and begin cleanup? Check what the site must look like when the lot closes. Finally, ask your accountant to show how leftover stock and write-offs appear in the financial statements, so you can see what the profit really looks like. A seller who tracks leftovers carefully usually runs a tighter lot. Ask whether leftover trees have ever been used for something that pays, such as mulch or a charity pickup, and whether that arrangement would continue under you.

Key takeaways

• Compare trees bought, sold and discarded over several seasons.
• Ask who removes leftovers and what it costs.
• Check whether late discounts have been hiding poor buying decisions.