Hidden costs of scrap metal vendors
Revenue rises to the top of your mind when you think about selling your scrap metal. Not only are you recycling your scrap, which is good for the environment, but you can bring in those additional dollars to add to the bottom line. But are you really making all you can? As a scrap metal recycling company for nearly a decade, Texas-based Premier Metal Buyers (a BIG company) has learned you don’t always get what you pay for. Taking years of customer feedback, implementing industry best practices and learning through experience, we want to share the top 5 hidden costs to look out for when working with a scrap metal vendor. The Brannon family decided a long time ago to be a different type of company. Building trust, providing transparency and providing the right tools help avoid some of the hidden costs you could pay if you don’t go to the right vendor.
1. Broker or Mill Direct Processor?
Does your scrap metal provider sell direct to the mill? If not, you are likely dealing with a broker and you may get less. That middleman then outsources the logistics to people you don’t know, and your profit goes down. Selling direct to the mill means you have someone to go to for transparency. You want to trust you are getting a fair deal.
2. Is your scrap dealer using certified scales?
Scales are computers which can be programmed to read whatever an unscrupulous scrap dealer wants them to read. Never use a scrap dealer who doesn’t allow you to see the scale read-out. You can lose money if you don’t have certified scales. A bad dealer or broker may tell you the load weighs 8,000 pounds when in reality it should be 10,000. Do they provide actual pictures of what comes across the scale?
3. Understand what goes into the price vs. service
Scrap dealers often cut deals to get your business, but don’t raise the price when the market goes up. Find out what your metal is worth by contacting us for a quote so you can see for yourself what the business opportunity is. The service level your vendor provides is also key. How much are they communicating to you? Are they meeting service requirements for pick-up times and reporting transparency?
4. What fees are you paying?
Beware of hidden fees that lower the amount you are paid for your scrap. Barring exceptional labor or recovery situations, your price quote should be a flat rate “as is, where is” and include container rental, transportation, fuel surcharges, standard handling, administrative tasks, etc.
5. Transparency and Reporting
You should receive itemized reports and receipts for all loads and transactions. You should see the breakdown for each metal. Your vendor should be working with you to help make sure your metal is sorted properly so you get the biggest bang for the buck. If you aren’t getting help on how to set up your process of managing your scrap metal and knowing what metal you have, then find another vendor because you are losing money every time the wrong metals get mixed together. Make sure everyone agrees on what the breakdown and process is so there are no surprises.
Recycling your scrap metal can save money and reduce your production cost. We hope these tips help you understand the dangers of possible hidden costs in the metal recycling process and provide some guidance in choosing the right vendor to help you get the fairest price for your scrap.
Contact us today for a consultation on how to get the most out of your scrap metal.