These are some numbers that are no way set in stone. They are merely speculative and meant to explain
to interested applicants approximately how I would like to split up the pie. The numbers reflect a situation in
which a skipper provides a skiff and seine and is running the boat all season. If I'm aboard with my son for the start
of the season the percentages would be tweaked a bit. If I provide the skiff and seine, I'll require a slightly higher
percentage.
To start with I'm proposing what I think will be required to attract quality crew members. I base
these numbers on the experience I have in hiring good college students over the past several years.
This is one option. Another can be found by clicking the picture under my address on the
crew job page. Usually I pay the crew more as earnings increase. This covers my back in the event that unforseen
problems arise. In the case of this business, I think it's prudent to encourage the crew to accept salmon as their share
rather than dollars. It's very conceivable that they will develop useful markets for our portion of the pack through
this incentive. I'm also in favor of selling extra salmon to the crew at our best wholesale price just as an incentive. The
percentage I'm proposing for crew members allows them to earn 4 to 5 times as much from the catch of the same
sockeyes and cohos that we freeze and vacuum seal later, as they would have if they were on a boat selling those salmon to
Ocean Beauty or Alaska Pacific Seafoods, even more if we turn the frozen fillets into lox. For crew members
unwilling to work extra for the vacuum sealed filletss or smoked salmon, I suggest the following pay percentage for any salmon
that we freeze in the round: Ten cents above what the majors are paying on the fishing grounds. Since it
will be impossible to weigh the fish if they quit during a time when we need to keep fishing, they will be paid a flat rate
that most likely will be significantly less than what they would have made if they hadn't quit.
For crew members that stay the entire season and through the packaging and smoking process, I propose
the following percentage of vacuum sealed fillets or vacuum sealed lox. These numbers are for 4 crew members not including
the skipper. Crewmembers that remain to help market all of the product will not be charged for storage but may
be charged shipping costs required to move the product to cheap cold storages in the Seattle area. They will
also be able to take their share of finished smoked product if they remain to help with the packaging and smoking of
the final load and any other fish that hasn't already been smoked. The gross fillet weight will shrink by around
18% after the fish has been turned into lox. A filleted salmon can net nearly 60% of the round weight. Crew members
that remain through the entire fishing season and marketing will not be charged for fuel and groceries.
Gross fillet weight % per crew member
total % of all four crew
40,000 lbs 4% (1600
lbs) 16%
(6400 lbs)
50,000 lbs
5% (2500 lbs)
20% (10,000 lbs)
60,000 lbs
6% (3600 lbs)
24% (14,400 lbs)
70,000 lbs
7% (4900 lbs)
28% (19,600 lbs)
80,000 lbs 8%
(6400 lbs) 32%
(25,600 lbs)
90,000 lbs
8% (7200 lbs) 32% (28,800
lbs)
100,000 lbs
8% (8000 lbs)
32% (32,000 lbs)
etc.
In essence 67,000 lbs of reds and cohos in the round makes 40,000 lbs of fillets... turn it all
in to lox, and we'll have about 32,800 lbs of lox. That would mean that each crew member would get 1,312 lbs of lox.
If we net $10 per lb for that lox after shipping costs, a crew member would earn $13,120. If we catch 167,000
lbs of reds and cohos it makes100,000 lbs of fillets. If we smoke it all, we would generate about 82,000 lbs of
lox. A crew member would get 8% of that or 6,560 lbs of lox which translates into $65,600 at $10 a pound. A
crew member that desires to sell his or her own lox will have the opportunity to take it after all fish have been smoked and
weighed but must arrange his or her own shipping and pay for his or her own boxes.
I believe this is adeqate incentive to keep a good team together. The following is the amount of product
that is left on the table after the crew has been compensated. I propose that all moorage, fuel, groceries, gear,
boat and skiff maintenace, plus the yearly insurance payment, plus the boxes and plastic be split evenly between the
skipper and myself. I will split the remainder of the fillets (after the crew has been compensated) 50/50 with a skipper
that provides a good diesel skiff and seine. Note that the fillet weight after paying the crew could be higher if some
crew members opt for cash instead of pounds of salmon fillets. In such a scenario, we'll make more in the
end, but these crew dollar costs will be included in the fuel and grocery expenses etc.. In other words if
we end up with 60,000 lbs of frozen salmon after the crew has been compensated, 30,000 lbs of frozen sockeye or
coho will go to the skipper. If the skipper wants to have his share smoked and he participates in the final
smoking, packaging and entire marketing of all the product, I would give him 40% (after crew shares) of the remaining finished
weight of all smoked salmon fillets, while I take 60% and I would pay for storage and electricity in Kodiak plus any
marketing costs. Any non-crew member shipping expenses, and winter cold storage would be shared equally between the
skipper and myself (cold storage in Seattle is much cheaper than Kodiak). If he opted to walk with his product
and market it himself, he could do so, but would be required to box and remove his share shortly after the entire pack is
smoked and arrange his own storage.
Assume that the skipper chooses to have all his product turned into lox. (These are rough estimates
but I think the recovery is fairly close to correct).
net fillet wt. after crew lox weight skipper
40% skipper % x $10
33,600 lbs 27,552 lbs 11,021
lbs $110,021
40,000 32,800
13,120 131,120
45,600 37,392 14,957 147,567
50,400 41,328 16,531 165,312
54,400
44,608 17,843 178,432
61,200
50,184 20,074 200,740
68,000
55,760 22,304 220,304
Now assume that fuel and groceries are $25,000. Moorage plus boat and gear maintenance is
$15,000. Insurance, boxes, plastic, plus winter storage and shipping amount to $20,000 for a total overhead of
$60,000. If these numbers are close to correct it translates into a $30,000 expense for the skipper a $30,000
expense for me. If we have a gross fillet weight of 40,000 lbs or 33,600 lbs after compensating the crew and
we sell all the lox (27,552 lbs) for just $10 per lb, that would be $272,552. At 40% to the skipper, the skipper would
have a gross of 109,000 and a net income of $79,000. I would gross $145,500 and about $115,000 after the $30,000
expense, but before paying off my debt burden, licences, etc. (about $60,000 for year one). So in year one,
on a conservative 40,000 lbs of fillets I would still net near $55,000. If we put up
100,000 lbs of fillets and have 55,760 lbs of lox (after the crew is compensated) and we sell all of that lox at just
$10 per pound, the skipper nets $190,304. I would earn about $380,000 less my extra debt burden etc.
If you still don't believe this is a good risk, I recommend you check out the prices of sockeye lox
on the web sites of our future competitors or maybe markets. These sites are listed on my web page link titled Salmon
Prices
I require an individual that has a strong enough balance sheet to tide him over until we have sold a portion
of the product next fall. It might be that I go aboard for the first part of the season and then as soon as we
have 40,000 lbs, I'll step off the boat and concentrate on marketing and smoking. Of course we would have 2 eager workers
ready to replace myself and my son at that time. I'm willing to sign a fair contract with the right individual
to make this situation a win win situation for both of us.
