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I was contacted by a grade school friend. He worked for a manufacturing outfit since high school making arcade machines. They've recently downsized. Long story short we discussed this today. He estimated 10 ton; everything from galvanized steel to aluminum.
With this kind of tonnage. What kind of profit margin would big players make on this?
Thanks again to everyone who chooses to comment on my posts.
Metal Recycling Entrepreneur
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Aee you asking how much margins would be for a large scrap yard or how much a scrapper would share with his client?
Sweat is the cologne of success!
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It all depends on how much you pay for it. Even if it was all steel, you'd be making approx. $1,400 gross profit at $.07/lb (my local price). Factor in the AL, and you could have up to $1,700 or beyond. How much you make depends on how much you get it for. If it were me, I'd offer $400 and negotiate from there. Personally, I'd go and look at it first before making any kind of offer, though.
There's nothing more fun and more effective than hitting something repeatedly with a sledgehammer
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I will be doing a walk through with him.
With so many large companies around here I was in the range of 100 to 150 a ton.
My question is between a scrapper and their client. I don't think he will contact large corporate places. I want to be fair. I think by offering 50% of current market. He may be very happy. I would be happy with 50%. To those that have landed large deals... Is 50% selling myself short?
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In all fairness I know large corp work on much slimmer margins and their paying a lot more overhead. Then again I can't compete with their tonnage.
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Don't forget that you're going to be doing most of the work, as well as hauling it all to the yard yourself. That's a lot of gas. I'm not sure what prices by you are like, but I'd go maybe 30-70, just because that extra 20% would be going towards labor, gas, and other expenses. Also don't forget to ask the yard about bulk pricing.
Metal Recycling Entrepreneur
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At my yard you'd get $0.08/lb. So the overall load will bring in $1600. If 50 percent or $800 would be worth all your effort and expenses then roll with it. If I could complete that job within one day and my expenses were less than $100' I'd be satisfied with a $700 a day payday. I'd definitely look into seeing if your yard could spot you a roll off box.
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I'd split it by taking $1,000 of it and offer him whatever is left. Don't forget that your labor should be considered an expense too.
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Personaly I would do a 60 40 split. The 20 percent difference would pay your expences. Just my opinion though.
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my recent whale deal is turning out pretty disappointing to be truth full. when we started negotiations 6 month ago or so HD boards were at 14 + the 2 samples he brought me weighed out at 7 per LB the price has dropped to 10+ and most of the HD boards are weighing out at 17 per lb. steel dropped from 14 to 06 vhi grade boards have dropped about 25 to 35%. die cast to 27. extruded from 80 to 44 ect. so a lot of your profit will depend on unintended and unforeseen elements give your self the profit you want then add some more for a cushion. when you are dealing with a lot of weight even a small move in the market ads up very quickly. you may give him a percentage based on the price at the yard when delivered like the yards do.
we will still make a decent profit on the whole 900.000 lbs but we are losing tens of thousands off the estimate 6 month ago
Last edited by EcoSafe; 07-31-2012 at 10:35 PM.
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I'm leaning towards a flat fee way under 50%, more in the range of 25-30%. If we cant come to an agreement my final offer will probably be 50% split of ticket, just so I don't get burned on price fluctuations. My hopes are he doesn't call a corporate place like Sims or another large yard. I don't want to look like a scammer. He may open a company himself in the future, and he knows many others in the stamping/ plating industry. With only two regular accounts I'm looking more at the long run , rather than short term.
You've all provided some good answers/ suggestions. Thank you.
Metal Recycling Entrepreneur
Dont arcade machines have a lot of particle board and glass in em?
Dont forget the baords in a lot of older arcade and pinball machines are telecom grade or high grade....
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I just took a load of arcade boards to a buyer and they were all the Chinese grade boards.Originally Posted by ozzy214
P & M Recycling - Specializing in E-Waste Recycling.
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Metal Recycling Entrepreneur
Russell, maybe you should try to have your buddy speak to the owner, or set up a meeting with him yourself(if you haven't already done so) and just give him reasons why he SHOULDNT deal directly with a yard. Tell him you live in the same community, by him sticking with you he's helping you get by, supporting your family, etc heck everyone's got a soft spot
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To clarify: These are all internal pieces of the games, not whole machines. This would be a lot of framing and bracketing type material used inside the machines. From my understanding they don't just make your typical arcade games. There's a lot of different types of entertainment machines nowadays. If any of you have been to Dave and Busters or Gameworks. You know what I mean.
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