Splitting proceeds with suppliers

I may be way off in the line of business here, but I am looking at an idea...

I suppose there are two potential circumstances-
A. Business has scrap and takes it already but doesn't really want to be bothered with it, so you come in as the guy with a truck and who provides the labor.
B. Business has scrap but doesn't do anything with it but won't let it go knowing they have value in it or perhaps they already have someone scrapping for free.

I was looking at the possibility of taking a percentage of the scrap price as my "fee" in scenario A, assuming they meet certain minimums, IE $20 minimum profit per load. This would have to be looked at carefully on a case by case basis, as $20 of steel is a lot different than $20 of copper in volume, etc.

In scenario B, there is probably more room for profit. Maybe doing a 50/50 or 60 them/40 me. In this scenario I don't think they care as much as they are getting something, but aren't as concerned about the profit potential as in scenario A.

Also, anyone ever do jobs where the scrapping "pays" for your hourly wage? IE someone needs a garage cleanout, but you say my fee is $25 for an hour, but if we get at least $25 of scrap, it is free to them? (You could workout something on what is left)

I've discovered one guy who was doing some demo work and basically worked for what he scrapped out...and it was BIG 7 story building that was last really used in the 80's and went back to the 1930's in construction.

I'm working on a "b" scenario right now. I have a few places with scrap that just sits. One place even got an open top dumpster and paid to haul it off!! I'm talking with them trying to get them to allow me to clean house, saving the labor to remove the scrap, and amount that we agree on per load. I wasn't thinking 50/50, but more of a flat rate.

C scenario is business is just throwing it all away, and paying to dispose of it. You do it for them, no charge and they can be "green"

When I have to pay for steel I generally pay by the "truckload" or the "trailer load"

If they question amount i generally tell them its only worth pennies per pound, feel free to load it up and drive it in.

Mainly dealing with business accounts because they generally have repeat scrap and less emotional attachment to it

Personally I will avoid any deals where percentages are involved. I find that eventually someone thinks they are getting the short end of the stick. The supplier suddenly no longer has the the high end product(Cu, Al, Brass) and all there is to share is steel. You get the idea, I'm not big on partnerships. I would much rather buy it, pay cash and sell when where and how I want to. For me its just much simpler.

Others who have suggested offering a service and even charging for the removal of scrap have the best plan, in my opinion. I don't deal in steel so charging for removal is outside of what I get involved with but much is free because they know I will dispose of it responsibly. Mike.

PS If you pay too much in the beginning you will find it very difficult to reduce your prices later, this is something I have experienced. Mike.

I was doing some scrapmetal work one day and a chap walks past, stops and turns to me and says..

"You don't make your money by selling scrapmetal, you make your money by processing the scrapmetal"

And turns back and walks onward.

I have thought about that a lot since and he is right.
You can pick it up and sell it like that and you don't/won't get much money for it.
Put some time into it and you double that money, put some more time in and you triple that money.
But it wasn't the metal, its what you did with it.

I wouldn't set a $ on %. I'd just say that every so often you will come in and give them some cash for what you got.

I do something similar. I get the scrap, clean it down, get rid of the rubbish, seperate the metals and keep ALL of the money I get from nonferrous.
The money I get for my ferrous, I give to the guy who owns the place I get my metal from.
And its ALL of the ferrous metal $ too, dosn't matter where I get it from, its his $$…

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Ha he, I just noticed I have had 666 'Thanks'. The devils in the detail..

Whats works for me? Get paid for saving a company on their trash EXPENSE. Then process and sell some of their trash. You don't want any companies trash! Do your homework, find out what companies are paying for commercial waste removal. Remember that they pay several different ways for disposal (100% overhead). Then you need to target large generators with a select type of commercial waste. Also you don't want all of any companies trash, just some of it. If you want to make money, at someone else's expense you need to provide a good service. They have to see the saving's in their bank account, simultaneously as the cash is deposited in your wallet. Easy, never easy, making money never is!