Rant on buying prices:

Haven't done one of these for a while so......

To those who run your scrap business like a business, you are and have a right to call your selves a true scrapper this rant doesn't apply.

To the rest you need to read this and become true scrappers.

IF you don't keep track of your expenses, fuel cost per item,that morning donuts and coffee, lunch, cost of repairs ect. your not a scrapper, you are a gambler and an amateur at that some times you win some times you lose. Even the pro gamblers keep a complete set of books.

and the only winner in that game will be the yards. If you are only here because it's fun, or you just want to make a few bucks thats ok I have no problem with that, but you may be costing yourself and those true scrappers who do this for a living a lot of money.

The value of a tower has dropped 30% in the last year. the cost of doing business has risen 20+ % including buying towers.

I have had maybe 3 or 4 jobs in 55 of my 70 years, 50 0f those years I have ran my own business, some absolutely great and some not so great. I have never run a successful one where I didn't keep the books and an eye on expenses, profit and loss.

while the value of e scrap drops the the cost continues to rise. A tower ,at today's prices should be no more then $3, just to maintain the same profit as last year, but I see the cost rising to as much as $8 or even $10. I haven seen this happen time after time in other businesses, concession stands, catalytic converters, the carnival business , and car lots just to name a few.

In the carnival business for example we made a lot of money, at least 6 figures every year. then rents, fuel, housing and food as well as hard ware began to rise while attendance dropped but I never gave up that is till the money ran out.

if you don't run it as a business, keeping track of all, expenses, and control inventory your money will sooner or later run out and one morning you will wake up with empty pockets and no money to keep going with your hobby or what ever it is to you. In the mean time you are costing all of us $$$.

every yard has scroungers who take your mixed load at .08 a lb and turn it into .50 a lb.

Every day I see questions on this forum that verifies this fact. There is a thing called "sweat equity" many of us here have invested gallons of it. This forum has made it a lot easier these days with thousands of archives from those who have gone before. and prov1ded a degree in this industry as good as any doctorate in any profession and it is all free. Use it along with some common sense and a simple set of books. save your self and the rest of us a lot of money.

In 2 years I have gone from $100 loads to $8000 loads, only using this forum's archives, help from members, hard work and, common sense.

Just keep buying until you run out of money........If you never run out of money I guess your doing ok

Well, a couple points to make here:

1: If you don't know what you are doing you have less chance of being successful
2: If people who don't know what they are doing are adversely affecting your business, then you are doing something wrong too
3: Like any business, you have to seize opportunities as they present themselves. That may mean being in position to capitalize on the mistakes of those that wont learn/listen
4: If you are good at what you do, then your services will always be in demand...AND...you can typically set your own price.
5: SMF is one of the best tools available to help scrappers succeed, whatever you define as success

I forgot who has this tag line but it is very appropriate when considering how successful you want to be (paraphrase): "Do what others cant do and/or do what other wont do"

you have a good point and evan tho some of what you sied does apply to me .so far in three years I have never seen a major loss.
I am just a small home based business tho.right now im paying 4 dollars ea for complete towers. ea tower takes me 4-6 min to tear down.
as a total I make a average of 9 dollars per tower .my rule of thumb is
if your bank ccount never goes lower than what you spend your doin ok

just want to say this

im a small time scrapper
and one lesson i learnt from here is to offer to pay for scrap

generally i try not to pay or to even talk of money
but one of the biggest jobs ive landed was through offering topay

i paid R250 and made about R2500-in 3 days
so thanks for the advice
and it seems as if theres still a BIG motor to be had- the lady from the store phoned me again last week & asked how much i was prepared to pay

i told her that i would need to factor in fuel & then would have to make a profit on top of that
hopefully i get- looked like a lot of copper in that motor.

it appears that some kinds of places youd be better of offering something
and some places, you just dont talk of money- u load the stuff, ask if theres anything else they want to get rid of & drive away.

Quote:

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Originally Posted by shendog

Well, a couple points to make here:

1: If you don't know what you are doing you have less chance of being successful
2: If people who don't know what they are doing are adversely affecting your business, then you are doing something wrong too
3: Like any business, you have to seize opportunities as they present themselves. That may mean being in position to capitalize on the mistakes of those that wont learn/listen
4: If you are good at what you do, then your services will always be in demand...AND...you can typically set your own price.
5: SMF is one of the best tools available to help scrappers succeed, whatever you define as success

I forgot who has this tag line but it is very appropriate when considering how successful you want to be (paraphrase): "Do what others cant do and/or do what other wont do"

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I agree with all your points except with the possibility of #2. There are lairs and cheaters out there and they do affect things both straightforward and in subtle ways that can make it rather difficult to compete, especially for a start-up or for those switching gears in this business. But I have learned the hard way not to be too concerned with what others are doing and keep my focus on what I need to be doing.

Olddude, my hat's off to you. You have no idea what an inspiration you have been to me.

Yeah i agree half of the scrappers out there don't have a clue and haul in $5.00 worth of stuff for gas or to buy a beer.
I was in the yard last year some dude came in and had a few fence post he got out of a dumpster about 15 miles from the yard.When he got his check it was $6.00 and something he went across the street to cash the check which cost a $1.00 so he had $5.00 profit but none really by the time you figure 30 miles worth of driving.But low and behold what did he do buy a beer.
I mean you do all of that for a **** beer really.

Last night i seen a guy had a dryer in there he had just got out of a DUMPSTER and a cop had him pulled over asking where he got it at and where was he headed.
I mean some people do that stuff but it isn't for me and i just can't see doing it.

But i hate when you lose money over a honest mistake though really.I do this for a living and really hate for someone to have a full time job and still do it for extra money.

Quote:

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Originally Posted by shendog

Well, a couple points to make here:

4: If you are good at what you do, then your services will always be in demand...AND...you can typically set your own price.

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Not really true. People can set their own prices in areas where the demand is greater then the supply and their unique skills are in demand. Exactly where does this apply in commodity scrapping in general? This is an industry where you have to have built up connections over years to get your material coming in at a rate you can make a profit. You need to juggle the different materials to know what you can and cannot make a profit on (this changes all the time and varies area to area). Knowledge and connections or being the only game in town are what makes or breaks you, same as in every other business. For somebody starting out now in a highly competitive area it is hard to make money even with skills.

Quote:

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Originally Posted by unknownk

Not really true. People can set their own prices in areas where the demand is greater then the supply and their unique skills are in demand. Exactly where does this apply in commodity scrapping in general? This is an industry where you have to have built up connections over years to get your material coming in at a rate you can make a profit. You need to juggle the different materials to know what you can and cannot make a profit on (this changes all the time and varies area to area). Knowledge and connections or being the only game in town are what makes or breaks you, same as in every other business. For somebody starting out now in a highly competitive area it is hard to make money even with skills.

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I've seen my item #4 manifest itself in many different types of industries, so I know its a sound principle. I don't advocate it as an absolute in every circumstance, but its true more often than not. I know of 4-5 guys on this thread regularly that could walk into (almost) any location in the US and set up shop without connections and within a year have a successful business. It takes motivation and knowledge, period. The contacts will come. Competition is everywhere, so if you are fortunate to be "the only game in town" you are indeed lucky....for now. But having competition isn't what breaks you, it actually allows you to have a measuring stick on how good you are and what areas you can improve on. There are ALWAYS areas where you can separate yourself from others and provide a service that others don't/won't.

Unlike the original poster, I don't worry about the guys that are not "true scrappers". They don't pose a threat to my business and them overpaying for material will just hasten their departure from the industry. I set my own rules for what I pay, who I do business with, what I'm willing to do (or not do), etc. I am confident in my abilities and painfully aware of my deficiencies. I focus on what I do best, represent myself honestly to my clients, and try to meet or exceed their expectations. While I do most of the things the OP described as necessary for a "real" scrapper, I really haven't kicked off my business as one might for a new startup. Given the great success I've experienced in just the first year, I'm almost afraid of what will happen if I actually did a marketing campaign. I thank God regularly for the blessings and I count this Forum as one of the best tools for my success.

[QUOTE=shendog;163915]I've seen my item #4 manifest itself in many different types of industries, so I know its a sound principle. I don't advocate it as an absolute in every circumstance, but its true more often than not. I know of 4-5 guys on this thread regularly that could walk into (almost) any location in the US and set up shop without connections and within a year have a successful business. It takes motivation and knowledge, period. The contacts will come. Competition is everywhere, so if you are fortunate to be "the only game in town" you are indeed lucky....for now. But having competition isn't what breaks you, it actually allows you to have a measuring stick on how good you are and what areas you can improve on. There are ALWAYS areas where you can separate yourself from others and provide a service that others don't/won't.
QUOTE]

In our area there was 2 main scrap buyers. Everyone either went to one or the other, for their own reasons ("Because we do" was the reason)

The 3rd buyer was a big dealer, they delt directly with the railways & industry & didn't pick up metal, it all got dropped off to them by the kiloton. We never went there.

Then, something happened with the big dealer, they wanted to get bigger, so they cleaned up their act & area, put adds in the paper with prices for the first 2 months & we noticed.

Then as we talked about it, we started to relise that virtually everytime we went to the other main 2 buyers we were getting ripped off.
A Kg here or a Kg there, their scales didn't read right depending on where you put the metal (?!) They were down grading our metal & not showing us what they wanted.

Then I relised that the other guys scales were taking weigh (sic) too much time to get to a total. Ie, chuck 12 Kg on, watch as it goes 11- 12 - 13 -11-10-9-9-9.
So, its 9Kg.... & WTF was the guy doing signalling something to someone at about the same time the values changed..
& WTF! 9Kg, thats 3/4 what we weighd it at beforehand.

Then we find out of someone that did get ripped off. By the old "Yeah, we will drop off a metal skip so you can fill it & we will pick it up & pay you." 3 tons + gets a return of 1 ton after expenses...

So, we now go somewhere else, the 'Big guy' who isn't interested in ripping us off. Even a rumour is going to affect their returns.

Their paperwork is going to have to match every step of the way. If its out a little they know something dodgy is happening & the workers have no intrest in wrecking their job for a few $$. So they do everything by the book &

well you know. Thats where we sell all of our metal now. 100% of it.

Thats how you get a good name in the scrap business, stay clean & honest & let the others ruin it for themselves.

I wonder how much the other dealers would pay us as a lump sum to get 100% of our metal for ever?
It'd have to be way more then they ever ripped us off for.

Quote:

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Originally Posted by shendog

I've seen my item #4 manifest itself in many different types of industries, so I know its a sound principle. I don't advocate it as an absolute in every circumstance, but its true more often than not. I know of 4-5 guys on this thread regularly that could walk into (almost) any location in the US and set up shop without connections and within a year have a successful business. It takes motivation and knowledge, period. The contacts will come. Competition is everywhere, so if you are fortunate to be "the only game in town" you are indeed lucky....for now. But having competition isn't what breaks you, it actually allows you to have a measuring stick on how good you are and what areas you can improve on. There are ALWAYS areas where you can separate yourself from others and provide a service that others don't/won't.

Unlike the original poster, I don't worry about the guys that are not "true scrappers". They don't pose a threat to my business and them overpaying for material will just hasten their departure from the industry. I set my own rules for what I pay, who I do business with, what I'm willing to do (or not do), etc. I am confident in my abilities and painfully aware of my deficiencies. I focus on what I do best, represent myself honestly to my clients, and try to meet or exceed their expectations. While I do most of the things the OP described as necessary for a "real" scrapper, I really haven't kicked off my business as one might for a new startup. Given the great success I've experienced in just the first year, I'm almost afraid of what will happen if I actually did a marketing campaign. I thank God regularly for the blessings and I count this Forum as one of the best tools for my success.

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competition is not the problem. any good business will have a lot of competition.

the problem is uneducated competition that thinks to beat other competition is $.

when in fact the key to competition is knowing your craft, profit line, and common sense.

Yes 1000 people a day run out of money because of lack of these factors but, there are 2000 more standing in line to take their place if they think there is a "fast buck" or easy buck in it.

the proof of this is 1,000,000 successful businesses and 340 million workers available in this country. (numbers are for illustration only).

lets take the "cash for guzzlers" fiasco. suddenly every one thought their $1000 clunker was worth $3500-$4500. Pryer to that idiotic scheme you could buy an old work truck/car for $1000 or less any time any day and used car lots were on every corner. Suddenly that $1000 car/truck is $2500 or more.

Have you counted the number of vacant car lots in your town lately?

"those who think the path to success is only money will never see success." MCW 2013. just my .02

Quote:

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Originally Posted by olddude

lets take the "cash for guzzlers" fiasco. suddenly every one thought their $1000 clunker was worth $3500-$4500. Pryer to that idiotic scheme you could buy an old work truck/car for $1000 or less any time any day and used car lots were on every corner. Suddenly that $1000 car/truck is $2500 or more.

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The other thing that happened with that program was the cars with all the parts had to sold for scrap and not to be re-used. That caused a shortage of used parts for older cars that forced people to buy new parts or new(er) cars. I wonder how much more energy was expended rather than saved by that program. Also didn't that cause addition expense to those least able to shoulder it? I am certain there are more great government programs to come. Mike.

Quote:

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Originally Posted by miked

... Also didn't that cause addition expense to those least able to shoulder it? I am certain there are more great government programs to come. Mike.

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There is the basic flaw in most government programs - the belief that those being "helped" will use common sense and not take on more debt than they can afford. How many traded in a junker for a new car, only to lose that car six months later cause they couldn't afford the payments?

It's true in this example and it's true in business or anywhere: The people who manage their money will prosper. People who let their money manage them will fail. It's been said that you could put ten rich people and ten poor people on an island. Give each the same amount of whatever they'll use as currency. Come back in six months. The rich people will have all the currency; the poor people will have none.

I heard a saying in a movie last night that I believe in. " Never use money to measure wealth "

Wouldn't it be great if that were true in business.

I am not a full time scrapper and admittedly my paper work is way off. Though I know my local and semi local markets and the various scrap yards. I haven't lost on any loads yet. Since I have so much time on my hands now-a-days, as long as the bills are paid, I am happy. Sometimes that means I have to work all week to make $250, sometimes it means I work several hours for the same $250 and sometimes it also means I make about $2\hr. << RARE. Still, my material is free and my fuel cost, insurance and maintenance are already factored into my regular budget.

I have learned a lot reading this thread though and for that, I thank the thread starter and the contributors!!

THANK YOU.