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.

Quote:

---

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?

---

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.

Quote:

---

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.

---

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.

Quote:

---

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.

---

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.

Without Co-Ops Australias primary production industries (agriculture, livestock, fishing) would have failed many years ago, and we would be over run with chinese imports..

I would be part of one, if one was in exsistance here in Australia, but have neither the time, or head space to build one.

I applaude your thinking Korrosive, and hope that through this thread, the right kind of members will contact you and make a go of it.

Better to try and fail, than to never try at all!!

I understand the whole teamwork thing, been building large things for over two decades and organizing the people that are involved in the projects...also a USA Hockey level 5 coach so I've been thoroughly educated on how to motivate.

Sure more get's done when you cooperate, that goes without saying. But even more gets done when there is a clear understanding of the what the final outcome or goal is, you then assemble the team to complete the job and help each person to understand what their role is. Then the reality of it is, some team members are more valuable then others so they get a bigger slice.

"Then the reality of it is, some team members are more valuable then others so they get a bigger slice."

Reminds me of the Pigs mantra in Orwell's Animal Farm--"all creatures are created equal but some are more equal than others." ;)

And I'm unsure of the parallels. I'm not advocating that everyone would gather metal and average loads, so no one got paid any more than anyone else. I'm just trying to shed some cost/benefit on cooperation. think of what scrappers do to squeeze out a couple of pennies, the pissing and fuming, the Nitons dragged out to be sure they're getting best value.

KZ, perhaps you're at the top of the scrapper's food chain and don't want others to exploit your prices, is that the case? I kind of understand the position, except that what I know of cooperation is that it doesn't pay out in every instance, but it wins in the long run. Your comments indicate a concern that others would benefit from you, not that you would benefit from them.

added on last edit:

It's a good point. A co-op would need generally equal partners. If you're bigger than everyone else in a group, you might only help your competitors and realize little or no gain yourself. This goes back to Game Theory: the strategy of always cooperate/never retaliate is a failed strategy.

In the case of your manufacturing biz: my experience is in fishing: I owned the boat. I found the fish. I got paid the most. But woe to me if I forgot the lowly deckhand cutting and gutting, because as mindless/skill-less as that job was, the operation couldn't run without them. No deckhands, no fish. I paid my help well, pulled them out the bars when i had to, took care of them when i had to. I could've replaced them with greenhorns, but greenhorns every month don't make a boat money. The captains i knew who flogged their people, abused their boats, paid flat rates, churned thru help. They won on the big days, but in the long run they never made a serious go of things. The other thing is my crew trusted me, and i trusted them. That alone kept us afloat literally and figuratively.

Not sure how. I'm trying to challenge ideas, not individuals.

If you mean my disputing statements, well, you know the old cliche: you gotta break some eggs if you want to make an omelet.

Discussions without dispute aren't exactly...enlightening.

I think it was Feynman who said " when there's two people in agreement, one of them is irrelevant." ;)

I'm very impressed with your thinking korrosive. But we're all speaking in theoretical terms within the boundaries of our own experience. Only when your ideas are tried in the real world will we have the "proof of the pudding".

The main problem I see, speaking from my own experience, is that this really isn't feasible internationally (the scope of this forum) or nationally. It has to be implemented on a local level... within a 100 miles or less.

But the concept is transportable to all locales.

So I see the challenge as being creating the basic concept, addressing the problems that will arise in the course of implementing the concept, and making a knowledge base available to those who want to implement the concept in their particular location.

I don't think it's a matter of "herding" cats. I think it's more a matter of cats realizing it's in their best interest to cooperate. Not only is there leverage in larger quantities but there's value in a broader range of knowledge --something this forum makes abundantly clear. Scrap yards get better prices than we do because they deal in larger quantities and they have a direct line to better markets.

Isn't what we're talking about, essentially, a scrap yard by, for, and of the scrappers? Rather than one based on profit for a small circle of people? Call it what you will but wouldn't you rather get more profit from your sweat and give less of it to someone who simply takes what you have to sell and sells it to the highest bidder?

Excellent topic and there are some very intelligent folks chiming in!!! Not that anyone needs my approval, but just wanted to give props to everyone on here. I feel like I am at a brain-storming session, and I am the least intelligent of the bunch. Thanks for making me feel stupid. Just kidding.

America scrap metal industry has a reputaion of being led by the Mafia or mobsters amongst other countries. When I first started picking my bosses brain on info, he used a word in Chinese I didnt understand to describe the sellers of metal in America. I used a pocket translator and it came up as "mobster".

Now I know that this is a broad generalization, maybe based on watching too much TV, but this is not an isolated incident or is it a treatise on how the scrap metal industry is ruled. It is the perception, and maybe not reality.

Labor unions can be good or bad. They always have been. Firstly, Labor Unions were organized to protect the worker from deplorable conditions from their employers. Then unions became powerful and exploited and strong-armed the employers like a mobster would his own community and people.

The same questions and concerns about ideas of a Co-op in recycled metal have some of the same same concerns that all of America is having with the distribution of wealth (shared) and how it will be governed ( more important people that others). It is concerning to me as well.

But let's not forget that Korrosive's motivation for throwing out the idea of a Co-op has good intentions. How to make more money for the small business scrapper by professionalizing the occupation and group by raising the quality of lfe. The concept of the Co-op is secondary.

I agree with korrosive here, Kris Kringle. I think you're missing the point of the thread.

korrosive, jeez, Feynman doesn't carry much weight here. Obviously you've read a book or two between bouts of fish wrangling :)

Thanks for the input ChinaRedneck.

I grew up in central Illinois. And believe me, farmers are a very independent lot, like scrappers. I grew up during a time when a farmer's cooperative was being created in our community. It wasn't an easy sell. There was a lot of opposition. But, ultimately, it was seen as a boon.

And then there's the concept of cooperatives cooperating with each other.

Quote:

---

Originally Posted by smajor

And then there's the concept of cooperatives cooperating with each other.

---

Works in Agriculture.

Smajor and chinaredneck good two cents.

Agreed, its all about where the rubber meets the road and that it's a concept best introduced locally. With local chapters operating, there could be an effort to link into regional or national groupings.

My initial focus would be on the social networking methodology. there is a iphone app http://scrapmetalforum.com/ that provides some networking capability.

The app I am trying to work on would utilize gps and sms capabilities, though i am a lame cocoa programmer. You could broadcast in your area your interest in selling xx metals and message the community for interest. respondents could include weights and varieties. the initiator would be in charge of a dealer call. Prices would email back and times scheduled.

Just to clarify, I'm not at the top of the scrap chain not even in the middle. I'm just a businessman that has seen a lot of people try to succeed in business, trying many different ways with most not making the cut. I could see a co-op working if it was kept to a manageable size and had a place where the members could bring there load to store in the respective piles until ready to turn in. There would have to be some sort of rotation as to who was going to be responsible for pricing and bringing a load in then dispersing the receipts, or assign members so that a group is responsible for a pile. Start out on a small scale and evaluate to see if the goals are being met. It would have to be a pretty close nit group that trust each other with the money and that they are pulling their weight in all areas and most times this is where things go south.

I am curious of Kris Kringles take on this but since we are of the 1% that don't get it according to those getting the press these days, I have a pretty good idea.

MDG I've been following OD's thread just haven't chimed in yet. I like olddudes idea much better then this one because it's more of a partnership type thing so your in or out. This one-hit-wonder above seemed to want more of a socialist type yard/co-op where someone could get max payout for little risk of investing time or money.

I'm not anti-cooperation I'm just anti-socialist. I call that pro-capitalist.

I believe I agree with you KZ and mr dew perhaps get together make a deal, part with profit. Repeat as needed. Mike.

Some of us get a lot better pricing for non-ferrous at the local yards than others. If the local scrappers got together and found out which one got the best price for the specific item and pooled their material, everyone would get a better price. You could do that on a case by case basis. I cash in my scale tickets every week and get paid in cash so it would be easy for me to divy up

FYI: I'm in Ellensburg WA every other week so if any of the WA scrappers want to compare prices, PM me.

I'm sorry, but could someone tell me how working as a co-op is somehow socialist/communist? No one is being forced to sell through a group. You always have the option of selling your materials any way you want. A co-op is by definition capitalism. Supply and Demand. You band together, pool your supply, and demand better pricing. I have a small independent store. Buying on our own, we do not have the power to compete on price with large box store chains. I joined a buying co-op in my industry and together with a few hundred members, we collectively buy more and get as good or better pricing than the chain stores.

As with everything, there are good and bad ways of doing things, but if done right, co-ops can be great business tools. They can be the best way of leveling the playing field for the little guy.

I'm going to lock this thread as it's going down a political slide. If someone would like to start a new coop thread, please keep the political back-and-forth out of it.