Finding Time for What’s Important
This is a time of incredible uncertainty. With limited work crews in many recycling facilities, having the manpower and finding time to process cars is a challenge. Keeping the company books in order is equally important so that you can make a contingency plan for varying volumes. It can be difficult to find time to inventory and prep cores and scrap catalytic converters for shipment and sale. Often you find time to only do those things that are urgent versus the important. This is called the tyranny of the urgent. Now more than ever it is important that you know what is making you money and that you get money in the door to continue operating. You need to turn your cash as quickly as possible.
Manpower is a challenge. Slower sales and payments are a challenge. People are sheltering in place. Accidents and new car sales, as we all know, are at an all-time low. The automotive sector has been virtually halted. We know that no one replaces a microwave before they buy a new one; this is also true of vehicles. Used car inventories are going fast. Automotive manufacturers, automotive dealers, automotive parts suppliers and recyclers are not being left unscathed. We are all in this together.
Taking precautions and conserving resources are a must. Clean everything. Inventory everything. Sell. Sell. Sell. We do not know when this global pandemic will go away, if ever. There has never been a better time to trim the fat and know the bottom line of what is driving our businesses. We need to push forward. We need to trade with one another. We need to buy and sell goods and services. It is the only way back. The recovery may indeed be long and U-shaped versus quick and V-shaped but, history is on our side. We know that this too will pass, and we will live to see another day.
An Important Source of Cash Flow
Amidst COVID-19, with lower new car sales, corrections in precious metal pricing, and supply and demand coming into equilibrium, the revenue from converter recycling remains steady and important to recyclers. Precious metals mining and refining has not been left unscathed. There have been some mine closings in South Africa, some smelters and trade desks that are not taking bids or receiving material due to lack of liquidity, staff reductions, and smelting/refining capacity issues. Fortunately, the slower turn times are offset by the steady values recyclers can count on flowing into their companies from converter and precious metal sales.
Impact on Converter Values
The bad news is that precious metals have taken a hit as well. The good news is that they were on a historical run up almost 85% over the past two years and have only given up about 30%. This means that converter values are still nearly double what they were two years ago. Even with the lower values and the longer turn times the revenue from the sale of the converters is still significant. Inventory. Prep. Ship. Get that money coming in and keep it coming in.
One Way. Assay.
I will say it until I am blue in the face, assay-based selling with a process, a program, and a partner you can trust (and verify) is the only way to maximize the money you get for your cats with any certainty.
In life there is more than one way to do most things. This is not true with converter recycling. There is a specific amount of precious metals in each converter. There is a cost to recycle it. There is a price for each metal that is sold. You’re either in the real game or you are not. You are either getting treated fairly or you are not.
The 4 Ps of Converter Recycling Profitability
In recent articles I have written that you need a Process, a Program, and a Partner you can trust, and you need to learn the Power of Education. A Process. You can sell on assay instead of selling by the piece. You will need to be paid on a sample and assay that are official, accurate, and verifiable. A Program. You need to be able to get money when you need it to run your business. Getting you the most money from your converters shouldn’t mean you have to wait until you have a truckload or can hold out for three months to get paid. With most processors, you have payment choices like the ones mentioned above. A Partner. Selling on assay or recovery helps to eliminate that problem because there is a test result that can be considered the basis for the sale. However, even with this method, working with a Partner you can trust cannot be overstated. The Power of Education. We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard profile, you will increase your profits, and no one will ever be able to take advantage of you again.
Remember, keep selling into the market on assay. Don’t take unnecessary risks. Play the long game.
To learn more please email me at firstname.lastname@example.org or call 864-834-2003.