Doom and Gloom!

I'm there with ya, I'm not going anywhere - I see dropping prices as a challenge and I accept said challenge.

It's been a hard winter and things generally look a bit gloomy this time of year. Most of the businesses in this area lose money till things pick back up again in the spring. Things will start to break free in another 30 - 45 days.

What i would say is .... keep it real. Avoid the trap of "doing more of the same harder " if it's not working for you.

Instead ... step back and make an objective assessment of where you are and where you are headed. If it doesn't look good then change and adapt to the change in your environment. That's how creatures survive & even thrive in an ever changing world.

Any business owner has to be forward looking.

Make the changes today that will be needed in a year or two. That way you're always ahead of the game.

JMHO .... but it looks like we entered the deflationary phase of the recession sometime last fall. There's no telling for sure, but the safest bet might be to assume it will last as long as the inflationary phase ( seven years ).

How have you poised yourself to survive in this new environment ?

I'm stronger than ever, and doing 3-5 times what I did in the past in terms of profit. I'm spending a fraction of the time working that I did last year. Big changes involve focusing on refining Ebay and taking better advantage of it, having someone else haul my steel, contracting out some pieces of work where it makes sense, and getting my wife to work with me more on Ebay and one night a week breaking down.

Gives me more time to nap.

I, too, enjoy the nap time.

I've cut my expenses in half, and am to the point where I don't really need to do much to get by. By slashing our advertising (Don't run radio ads for recycling- trust me!), I'm in the black. Meet the newer, leaner business model. By changing my focus, and by diversification, I'm doing well.

If you won't change your models when needed, you'll go under. A lot of shops here are.

matador: "My business is lean and strong. Sadly, I'm not."

Originally Posted by Metalbestos

Plastic and low grade boards are the new steel . Nows the time to find a plastic and cardboard recycler in your area . Like others have said adapt to the change . Take the time to dot your i's and cross your T's .

Metal, do you have a cardboard or plastic recycler in the area? I would love to stop throwing my plastic out. It isn't something that the county recycles.

Funny how this is being brought up now... I was just researching how to melt(not burn) certin plastics. Only problem is finding a buyer afterwards lol.

I'll grab my raincoat

Stopped in at my usual gas station last month. Premium was running about 4.30 / gal. and regular was about 3.20 / gal. There was quite a spread there.

I already knew why, but i commented on it when i went inside to pay. The gal explained that she had bought that load at a certain price and couldn't go any lower without losing money.

I'm seeing something similar going on with scrap. It's a slow time of year and there's more time to network and build friendships with the other scrappers in my area. We all get together and just shoot the breeze for an hour or two every week. There's little or nothing coming in right now so they're hoarding till the price comes back up in the spring.

Wonder if we could take a lesson from the gal at the gas station ?

Commodities have been dropping for awhile now and don't appear to have hit bottom yet. Folks are holding while the value of what they have in stock is dropping daily.

Wouldn't it make more sense to turn-n-burn ? Get that stuff in and out of the shop as fast as possible so that you're not losing money on it ?

Originally Posted by Scrappah

Stopped in at my usual gas station last month. Premium was running about 4.30 / gal. and regular was about 3.20 / gal. There was quite a spread there.

I already knew why, but i commented on it when i went inside to pay. The gal explained that she had bought that load at a certain price and couldn't go any lower without losing money.

I'm seeing something similar going on with scrap. It's a slow time of year and there's more time to network and build friendships with the other scrappers in my area. We all get together and just shoot the breeze for an hour or two every week. There's little or nothing coming in right now so they're hoarding till the price comes back up in the spring.

Wonder if we could take a lesson from the gal at the gas station ?

Commodities have been dropping for awhile now and don't appear to have hit bottom yet. Folks are holding while the value of what they have in stock is dropping daily.

Wouldn't it make more sense to turn-n-burn ? Get that stuff in and out of the shop as fast as possible so that you're not losing money on it ?

"Dollar Cost Averaging" What you pay for the fuel is not what the liquid in the tank cost, it's what your average cost is over a period. If I buy copper at a healthy margin and it drops .20/lb in a day I don't just hold it because it might lose money. I keep selling and buying at an even lower cost. Over time you have an average purchasing cost, and an average selling price and you only hold enough volume cover what you need to get the best price you can. Fuel prices work the same way. If she's over charging for the fuel she may preserve her marginal target, but she's losing business. Slowing down business works if your commodity is extremely cheap or free and so is storage, but not if margins are thin and space is limited like at a gas station. If that is the case you have to keep the inventory moving out and the new product moving in.