Buying from another scrapper

Hi everyone,

I work at a company which scraps about 2 tons of metal per month that is about 40% non-ferrous (AL and SS). Breakdown is fairly complex, but I've become proficient. Before I opened my eyes to scrapping, we just gave it to a local scrapper for free.

About two years ago, someone decided to find a scrapper that would pay. The new guy gets sent photos of the materials and he comes by with a check and hauls it off.

I managed to convince management that I could take over the scrapping, could offer the same payment, and ensure that the material would never build up and become a problem. Unfortunately it was determined that it was a conflict of interest that an employee also serve as a vendor. So after only a month, the scrap guy is back and I'm side lined.

I did ask the scrapper what he is doing with the materials, to which he replied that he takes it straight to the yard as shred. He may be lying and is actually breaking it down, but I sense he doesn't take the time. He is a full time, one man operator.

So, I'm hatching a plan and thought I'd see what y'all think. I want to buy the scrap from the scrapper. Though he doesn't officially pay by the pound, I think he's roughly at $0.04/lb. He also doesn't come by quickly, so he is not very close.

I'm thinking that I can offer him a price that would give him a little profit, save him the round trip, and he could mail in the check.

I might not make much or anything on the shred and short iron, but the NF might make it worthwhile. So, if you are still reading, here is my question:

Is this a reasonable approach to take, and if so, how much would you offer? Is there a better or more creative way to approach this scenario?

Thanks in advance,

Mike

I can see this causing you trouble with management if you're just paying him a profit and taking over the job. They could see it as the same scenario that they decided to get out of, the conflict of interest. I think you may have to buy from him after he pays and removes from the site. Other than that I don't see any problems and you could make some money.

My top priority is to keep the day job secure, so relations with my employer is paramount. The conflict of interest was based on two concerns:

1. How do they know I would be paying a fair price? This is a joke because they don't have any idea how their scrapper is calculating his payments.
2. It could be problematic if they needed to terminate me as a scrap vendor but could not justify it as an employee. This is a valid point. It is also the best reason to buy from the scrap guy. He would be the "easy to fire" middle man.

What I would like to know is if you were the scrapper, would you take $0.08/lb for scrap that you don't have to touch and only had to mail in a monthly check for $0.04/lb or about $175?

Since he already knows our typical volumes, he should be able to know if I'm trying to short him.

Originally Posted by WhiteCollarScrapper

My top priority is to keep the day job secure, so relations with my employer is paramount. The conflict of interest was based on two concerns:

1. How do they know I would be paying a fair price? This is a joke because they don't have any idea how their scrapper is calculating his payments.
2. It could be problematic if they needed to terminate me as a scrap vendor but could not justify it as an employee. This is a valid point. It is also the best reason to buy from the scrap guy. He would be the "easy to fire" middle man.

What I would like to know is if you were the scrapper, would you take $0.08/lb for scrap that you don't have to touch and only had to mail in a monthly check for $0.04/lb or about $175?

Since he already knows our typical volumes, he should be able to know if I'm trying to short him.

I can see it being a problem with your employer regardless how it's handled, although if you buy the material from the scrapper after he has hauled it off the company premises, you "should" be clean on the deal. The problem is; your employer may fire you for skirting their policy. It's not about reality; it's about perception and the perception would be that you are making money from their scrap. I've BTDT with that type of situation. People get stupid over stupid stuff. Be VERY careful!

Not sure the scrapper Will want to except less then a yard . A kick back is what you want but that could be an issue
so why cant you be the whole enchilada. you get material break down the easy , get top $$ ,
pay your company some $$ .
or just keep some cherry items for your self .

as others may have mentioned, it comes back to the same thing- conflict of interest

if u are 101% sure you can do this right & still not let it affect your job in any way, then maybe its not a bad idea
but if theres a small chance u might mess up somehow, then u should weigh the value of your job VS scrapping

if u can get someone else to do this for u & still make a small profit-that would be ideal