Scrap seller Cooperative concept

All right i may be talking out my arse, but i was thinking of setting up a scrap cooperative in Northern CA. I am tired of having to spend hours on the phone talking to scale guys who read off a sheet, who offer me $1 pound for cupronickel, and call my Monel K--stainless. A month ago i sold 200lb of monel for $6 a pound. Two days later I moved a couple of tons of steel and had 15lbs of monel bolts and as told $4 was all i could get for such a small amount.

I consider myself lucky, as i don't have to sell until I get a decent price, but I see the poor bast*rds who stand in line at the dealers, looking like extras on the set of Mad Max, with a pail of copper pickings. They work the hardest and get the crappiest price. It's not right.
What about organizing?
Let's say you could get 30 people to put in 100lbs of copper each. Stay in touch in the forum, accumulate weights and then make the calls to dealers. It seems the only thing dealers respect is volume. So why not meet beforehand go in with a load and get paid a best price?

Any thoughts, or am I talking about herding cats?

I for one prefer to be a cat. I enjoy the sharing of information and ideas but put a premimum on my independence. I do appreciate your concerns but I adore our being held responsible for our own success. I offer this in the same intent I got from your input, a positive thought process. Best to you, Mike.

Hey Mike, thanks for the input. I will say, I'm not sure how independence is lost grouping together to get a better price. The only "togetherness" necessary is at the point of sale at the end of the day. Seems a bit odd that we'd cover ourselves ass to elbow in PCBs ripping a transformer apart for a better price for its copper, but not text/email/sms one another on sale day to secure 10c to a $1 more per pound for our metals.

In the ag industry cooperatives are a godsend allowing farmers to negotiate purchases of chems, seed etc and at harvest, negotiate crop sales prices.

I for one am a bit annoyed, stepping in to the booth at the scrap yard for the special squishy price, not being able to know what deals people before and after me got. It's one of the reasons i stopped buying welding consumables at the local airgas/praxair. You walk in and there's not a price on anything in the house. Pricing all depends on how big of a man you are. I think that's an unfair and a failed business model, thanks in part to the Walmarts of the world who charge $10 for a pair of jeans whether your joe blow or warren buffet.

there are several reasions it wont work, its been tried here. I perspnally think it or at least an association isw a great Idea. but I rode that horse here months ago till it died.

Reading thru the forums i note it is a tough audience: a lot of forum scrappers are small-time aggregators making money thru salvage AND by acquiring "valuable" stuff from others who don't understand the value of what they have. They operate like mini-scrap yards giving six-pack cash to the down-and-outers for metals which they happily resell to bigger outfits. I may be wrong but some of these guys are talking their books--as they say on Wall Street--profiting off the asymmetry of knowledge ( anti-capitalist). I think the next innovation in scrap should be the cooperation of the honest people doing the dirty work, so they can at least split the reward with the telephone bosses. My guess though, is the poor-assed stragglers i see in the yard getting 50c for brass don't have smart phones or laptops and aren't checking in to the forum. a pity.

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Originally Posted by korrosive

All right i may be talking out my arse, but i was thinking of setting up a scrap cooperative in Northern CA. I am tired of having to spend hours on the phone talking to scale guys who read off a sheet, who offer me $1 pound for cupronickel, and call my Monel K--stainless. A month ago i sold 200lb of monel for $6 a pound. Two days later I moved a couple of tons of steel and had 15lbs of monel bolts and as told $4 was all i could get for such a small amount.

I consider myself lucky, as i don't have to sell until I get a decent price, but I see the poor bast*rds who stand in line at the dealers, looking like extras on the set of Mad Max, with a pail of copper pickings. They work the hardest and get the crappiest price. It's not right.
What about organizing?
Let's say you could get 30 people to put in 100lbs of copper each. Stay in touch in the forum, accumulate weights and then make the calls to dealers. It seems the only thing dealers respect is volume. So why not meet beforehand go in with a load and get paid a best price?

Any thoughts, or am I talking about herding cats?

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Korrosive,

Change the concept from Co-op to a Labor Union in your community. Or merge both ideas to form a new concept fot the scrap metal industry in your community.

Is there such a thing as a Srap Metal Union? I could not find any.

There are inherent differences in the two concepts, but some priciples can be applied.

It could be set up like a corporation with shared revenue. First, members donate scrap, or sell scrap to the Union at a lower price than normal until a reserve is reached. The reserve is sold, and the profit could be put right back into the Union for procuring new scrap to sell, or divided amongst the members. The same ideas you mentioned in the agriculture industry could directly be used in the Union once it becomes powerful in your community. You could protect small-business scrappers because that is why all unions were first created in the USA. To protect the worker. The monopoly of Natural Resources is the enemy to both capital and labor. Other countries have Natural Resources Labor Unions. Scrap Metal Unions are natural resources. Or renewable natural resources.

Workers Cooperatives have a very broad definition, but the same basic principles apply based on the Rochdale Principles and Values from England 1844.

1. They have the objective of creating and maintaining sustainable jobs and generating wealth, to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development
2. Work shall be carried out by the members. This implies that the majority of the workers in a given worker cooperative enterprise are members and vice versa.
3. The worker-members’ relation with their cooperative shall be considered as different to that of conventional wage-based labor and to that of autonomous individual work.
4. Their internal regulation is formally defined by, agreed upon, and accepted by the worker-members.

Maybe I have been watching reruns of Soprano's too much, but if the garbage industry can be run and influenced by Unions, so can recycled metal. I am just not smart enough to figure that part out yet. When you get rich, dont forget about me.

Cooperative sounds so socialist

CRN,
Great post, thanks. I chose the word coop in hopes of avoiding a rancorous political discussion. There are some elements in the US who have been convinced by the bobbleheads of fox/talkradio that unions are evil, that when capital organizes it is beneficial and when labor organizes its wasteful. We're seeing the results of such a specious argument in our economy as i write. I consider myself a moderate, and believe that neither capital nor labor should be too powerful. Today we suffer because the pendulum has swung way too far toward capital to the detriment of workers AND the bankers. It's fine for the rich to be parasites, but its in no one's interest to kill the host;)

Ha, ha, Submarinepainter. With that avatar you should know the success of coops. The Vinalhaven boys--a well established fisherman's coop-- get the best price on the coast of Maine, bar none. Even the Atwoods won't piss them off; too many bugs at stake.

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Originally Posted by korrosive

CRN,
Great post, thanks. I chose the word coop in hopes of avoiding a rancorous political discussion. There are some elements in the US who have been convinced by the bobbleheads of fox/talkradio that unions are evil, that when capital organizes it is beneficial and when labor organizes its wasteful. We're seeing the results of such a specious argument in our economy as i write. I consider myself a moderate, and believe that neither capital nor labor should be too powerful. Today we suffer because the pendulum has swung way too far toward capital to the detriment of workers AND the bankers. It's fine for the rich to be parasites, but its in no one's interest to kill the host;)

Ha, ha, Submarinepainter. With that avatar you should know the success of coops. The Vinalhaven boys--a well established fisherman's coop-- get the best price on the coast of Maine, bar none. Even the Atwoods won't piss them off; too many bugs at stake.

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To avoid rancorous politcal discussion, dont put the Word China in your name, or work for a Chinese company. Too many people dont understand the Global economy and have a Cold War mentality. Stop shopping at Walmart if you hate China, because thats where all of their goods are made. Also, there is a great book by Fred J. Eddy called Land and Freedom from 1937 echoing some of your sentiments.

Costco and its CEO set a great example of how a corporation should be run and how workers should be treated.

Keep moving forward Korrosive and I thought your topic was thought-provoking and interesting.

I resist any escalation in the political discussion. We are free to associate with others as we wish. My experience with the farm co-op's left me believing that the sopisticated, big farmers held their crops til the price went up. The small farmers who always needed money for the next crop sold to the co-op and received much less in return. In a co-op there must be agreement by the members as to when to sell, when to hold and what percentage is kept to pay for the administrors.

My experience with labor unions consists of working in an auto manufacturing plant with the UAW as the local union. I found these guys to be cheap thugs who threatened others with physical harm. Now this was my experience and might not reflect any other local. These experiences did greatly affect my thinking on any union or co-op.

I did joint a "little" organization later and spent 20 years in the Marine Corps and retired at the rank of GySgt. This also has prompted my desire to remain independent. As before my comments are add to the discussion not to the polical side. Best to all, Mike./

Garbage industry http://en.wikipedia.org/wiki/Service...ion_of_America

Wow!!!!!

korrosive your idea of a cooperative where its members would save up a load fro the big dollars in my opinion has one major flaw. The non ferrous metals market is very volatile what do you have in mind to protect your members from price fluctuations leaning towards the negative side of the ledger.

It's been said that Lloyd's of London will insure anything, but I think that you would be hard pressed getting coverage for a volatile metal market.

Thanks for your response and ideas, it's appreciated. For me, it's a politics of the pocketbook, be ****ed the parties. It's sad the mention of people cooperating draws the claim "socialism." If that's case, the military is the biggest socialist organization of them all. Never joined or worked for a union but I do see their value. Don't know anyone in the UAW, but worked Davis/Bacon jobs and i can tell you the unions got better wages for the little guys. Concrete busting, welding you name it. A lot of people don't like the unions 'cause its a club. Such "cats" think they get their wages because they earn it, but without the foil of unions--love em or hate em--the multi-nationals would have us fighting over crusts.

I spent most of a career fish wrangling, about as independent and autocratic as it comes. Your farm coop experience does shed light on the topic for me. The big farmers are the ones who can afford to wait until prices moved I gather. Of course the cynic/economist in me can't help but think that if big farmers always make out in a supply/demand commodities market the system is rigged. In a true "open" market a Hold posture should lose as often as it wins.

As for fish coops they didn't always get us the highest prices, but they got us better prices over a long period, especially on those days when there was a glut of fish.

In the case of scrap: mike, maybe you could address what you might lose if, say, you got together with six or eight other guys and approached buyers. Here's a straight question: Would your scrap dealer give you a better price if you came to him with six or eight times your normal weekly volume?

I'd be interested to know the answer to that question from any of your folks on this forum.

Gustavus: You may be thinking on a much grander scale than i am. Given the high level of "connectivity" today, i am advocating for a co-op of the moment. If I have 100 copper 200lbs of lead and 300 lbs of aluminum, I sms, tweet, messenger, text, email to the community my interest in selling and location. If five or 10 or 20 other guys with varying amounts of scrap tentatively agree to bring what they have we get a volume jump. participants could email/text back their weights. A call is placed to the dealer. "we have XXXXlbs of these metals. "please, best price." The price is sent around. via smartphone. meetup sale is arranged. I am sure at first the logistics would be creaky, and maybe it wouldnt work, but the leverage might really help.

I mean, excepting big guys how many times have you had to knowingly take a crap price because you didnt have meaningful volume?

It is an interesting topic for discussion. It may be possible for half a dozen or so scrappers to pool their loads and command a slightly higher price based on the promise of X amount of material that will be brought in every week. You would have to be teamed up with guys that you completely trust, or just all get together on say Friday morning with all of your stuff, have coffee, weigh everyone's contributions, make note of these numbers and head of to the yard for turn in.

It could go even further with these 6 guys all chipping in on a 10 x 30 warehouse to better facilitate tearing down. Now you are looking at finding guys that you can really trust.

I have often thought of having a storage unit to work from so I could get my garage back, but the amount of scrapping I do would not validate this with the cost of storage units around here.

Too many random thoughts hitting my head that I am trying to pop out to add to this discussion.

Considering the above mentioned 6 person group. It would take a small amount of time from each individual to coordinate this effort. If it hit the point of requiring a hired hand at all to help facilitate, then I would think that any pricing gained from this alliance would probably be negated. At this point the 6 of you should just get together once a week and have coffee and shoot the breeze rather than go this step.

This brings me to the question of how many scrappers would it take to make a difference in pricing? If you are full time scrappers I think 6 may do it. Part time scrappers could take 50 or more to get together to make this happen. that would be a cluster fark.

How many scrappers would it take to put together in order to sell straight to the refinery in order to command the absolute best price? At this point you are talking scales, employees, shipping, contracts with refineries, and the list goes on. Oh wait, that defines the local scrap yard that sells to the refineries.

I think my favorite idea of this is getting together once in a week with those fellow scrappers and chatting and sharing info. That may be the better part of this co-op idea in my opinion. We have a very similar thing going on right here, which is cool, but I would not mind having the same connection with some local scrappers that I have here with you guys.

I just had a crazy idea. It might pay to place a Craig's list add stating "looking for scrappers". Then state the intention of getting together to talk shop and have some coffee and state a time and place and see who shows up. Local networking could be fantastic for me as the few scrappers that I have run into around here could care less about computers and willingly give them to me if they have them with them in exchange for some steel.

This idea of a co-op could have many levels from the smallest to the largest, but basically comes down to who you have in your area. Thanks for the topis, and thanks for letting me ramble. I am not even close to drunk. Just had a couple rums and going to bed soon. Garage sales are early in the morning.

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Originally Posted by korrosive

Thanks for your response and ideas, it's appreciated. For me, it's a politics of the pocketbook, be ****ed the parties. It's sad the mention of people cooperating draws the claim "socialism." If that's case, the military is the biggest socialist organization of them all. Never joined or worked for a union but I do see their value. Don't know anyone in the UAW, but worked Davis/Bacon jobs and i can tell you the unions got better wages for the little guys. Concrete busting, welding you name it. A lot of people don't like the unions 'cause its a club. Such "cats" think they get their wages because they earn it, but without the foil of unions--love em or hate em--the multi-nationals would have us fighting over crusts.

I spent most of a career fish wrangling, about as independent and autocratic as it comes. Your farm coop experience does shed light on the topic for me. The big farmers are the ones who can afford to wait until prices moved I gather. Of course the cynic/economist in me can't help but think that if big farmers always make out in a supply/demand commodities market the system is rigged. In a true "open" market a Hold posture should lose as often as it wins.

As for fish coops they didn't always get us the highest prices, but they got us better prices over a long period, especially on those days when there was a glut of fish.

In the case of scrap: mike, maybe you could address what you might lose if, say, you got together with six or eight other guys and approached buyers. Here's a straight question: Would your scrap dealer give you a better price if you came to him with six or eight times your normal weekly volume?

I'd be interested to know the answer to that question from any of your folks on this forum.

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hah, It took me about 15 minutes with my post, but covered some of the same thoughts as yours.

I'm grateful that I am able to wait to get better prices for the metal or products or services rendered, but the ability to do that is from working hard and smart for many years...it may sound selfish but why should someone else benefit from that. Many of the folks standing in line with out much to turn in chose a life style and a work ethic that put them in that situation. I empathize, but don't sympathize with them...in most cases they can set themselves up for success as well, capitalism works if you get out of the way and let it. No of course it could work great with a set group of people that have the same vision, but I guess I would call that a partnership.

This theory would only work on a local level. There is alot to go wrong when you must depend on the quality and quantity of the material

KZBell. There is no moral or ethical issue here. Beyond ideologies, there is a scientifically testable and provable reality for our species: cooperation has defined our success. When we work together we achieve more than when we work individually. Provability comes in the form of a simple computer game modeled after prisoner's dilemma. The simplest and most successful strategy of all what is called the tit for tat play. Its not all about cooperation--retaliation is an important component.

First cooperate with your opponent and then on next meeting do to your opponent what he last did to you. The success is built on two main points: Cooperation first and forgiveness.

Here's a link for any interested http://en.wikipedia.org/wiki/Prisoner%27s_dilemma. The iterated dilemma is the case here.

The point here is a retaliatory strategy (don't help others; they don't deserve it) may work initially but is a failed long term strategy.

Coop's do work well, read up on the REMC. Around here they buy the electric from Nipsco and resell to their members cheaper than Nipsco sells direct to theirs.