Unexpected profit - Should I give a kickback? - Page 4

Split !

I have been a business owner for over 20 years. A long standing rule of mine and I apply it almost with every business decision. Any endeavor has to be a winner for all involved. A winner for me, my employees, my vendors and most importantly my customers. Does everybody win at the same percentage, almost never! At the end of the day what matters the most to me, did I try to do right and what I thought was best for all involved. This is much harder than it sounds to put in practice and sometimes I take the lowest percentage (very rarely). The goodwill this develops for you is priceless and you will sleep better at night. So I think giving him a little extra is good for the both of you.

Originally Posted by TMoney

Just for clarification, we never really made an actual deal. He started giving me the scrap for free, and I started offering him the 50%. I'm sure that by now he expects the money, but it's never actually been discussed as "our deal". My wording in the OP may have been misleading.

I have probably misunderstood what you said then. I'm sure by now the 50% of the scrap metal is the deal because it has been performed so many times. I would still give him a gift, but it would be less than 50%. Giving him a nice dinner or something not money may prevent this from becoming a deal all the time, but don't do it for every single above scrap thing he gives you. I usually take a drink or some food to my mechanic because he is so good to me all the time.

Originally Posted by Spidy

I'm sure by now the 50% of the scrap metal is the deal because it has been performed so many times.

I agree. I figure that by now, he expects a few bucks when I pick up scrap. That's part of the reason I was hesitant to give him a piece of the resale profit. I didn't want to set a precedent. Who knows though, this may increase my chances of getting more working pumps in the future.

Originally Posted by Spidy

Your deal is to give him 50% of the sale price of the scrap metal, so give him 50% if you sell a piece for more than that.

I read it as he pays the guy 50% of the estimated weight. Thats the deal and if the guy is ok with that IMO, anything above that is the OP's good luck.

I'm ok with what I say and do, My words don't differ from online to real life and I try to make my statements clearly and honestly so that there is nothing to read or write in between the lines.
I am amused that I inspired a couple rants.
Thanks
re-cycler
;?)

You made more money than just scrap because dude said "hey, that one works and is worth some coin." You want to encourage him to do it more in the future so you make more money off of his scrap in the future. Offer him something extra this time (he may not want it,) and tell him you will pay him for anything like this that he points out to you in the future ( a new deal.)

Or give him nothing extra, and start checking all his scrap for resellable stuff yourself. no fun.

I gave him $50 for the jet pump when I stopped today. He only had 1 pressure tank and some galv pipe for me to pick up today. I didn't give him anything extra for the scrap pick up. He told me that he'll let me know if he gets any more working pumps. He also told me that he's now holding the copper and the brass for himself, so I suspect that I'll only be getting the shred that he can't haul in his van in the future.

Originally Posted by BurlyGuys

It says in the OP your agreement is for half the shred value. SHRED value, not resale value. Reselling involves more work, placing an ad, meeting the buyer, haggling, etc. I seem to be in the minority here but keep the money, unless you feel you are somehow being dishonest, which by my reading you are not. Remember, you made a trip to the guy for a ten dollar bill.

I'll give you an example from my business. I do junk removal. I charge $425 for one full truckload of material removed regardless of what it is, unless the load is very heavy dense or wet. Otherwise, I charge the same whether I am hauling bags of trash or the entire contents of an estate. At the time of the removal I have an agreed upon price before work begins.

With an estate I have the guys bring everything back to the warehouse (this is the entire purpose of spending money on a warehouse!) for sorting. I am typically selling a couple grand a month worth of stuff. I then go through the work of sorting, cleaning, and otherwise making things sellable. Then I either transport items to an auction house or a consignment shop, OR I store them further while I photograph, write ads, research the item so I know what I'm selling and can protect my precious feedback, and finally list and hopefully sell the item on CL or Evilbay.

When I finally DO sell an item, do I have an obligation to go back to my source and pay part of the profits? Of course not. That was extra work and expense on my part. Had I just done what I was contracted to do, hauling their junk away, I would have gone straight to the dump, dropped everything, and moved on to my next load. My obligation ends when I drive the truck away from their property.

Had you driven away and thrown that pump in your shred pile, would the customer have expected anything extra? Of course not. You had an agreed upon price, you paid, customer is happy, you're happy, end of transaction. Had the customer wanted more for the pump, he could have sold it himself. But he was willing to sell it to you for shred value, which he did.

Am I the only filthy capitalist pig on here? Or am I the only one willing to be honest?

And now TMoney, with all of that being said, act as your conscience guides you. If you are looking for absolution over keeping a little windfall profit, I hereby grant it my son. If you feel better cutting your customer in, then by all means do so. It will certainly generate some good will.

I agree with Burly on this one. Our contract clearly states that we "we reserve the right to sell items that are in good condition". When you have a payroll to meet, a warehouse to maintain and a fleet of trucks, a little "windfall" is a welcome bonus for the untold hours spent on "triage" and listing items for sale.

Another way of looking at this is, would you go back and ask him to return some of the money you paid him if the load didn't pay what you thought it would? Probably not. Remember, PROFIT is NOT a four letter word. It is required if your business is to grow. Since this person is also a business owner, they will respect you for that. Furthermore, the quickest way to have another competitor is to show a customer how much profit there really is in this business.

All that said, customer relations is a VITAL part of any business. We try very hard to make certain our suppliers are taken care of and appreciated. Gift cards, coffee and donuts at morning break time, Pizza at lunch, and an occasional laptop or cell phone make nice "gifts" to make certain your name stays at the top of the list.

As many on here have said, follow your conscience, but if it were me, I would say thank you in a way that is more personal than money. It will build more "goodwill" and respect for your business acumen than all the gold in Ft. Knox.

JMHO - TRB