Today, enterprising trash-preneurs transform trash into cash and a rookie in the pool-building industry makes a splash.
In the $32B salvaged metal business, one person’s crap is another person’s scrap
Thanks to the rising cost of mining for raw metal, scrap metal has become an increasingly valuable commodity.
And while the market for previously used metal may not be shiny, it is sizable: In the US — the world’s largest producer of trash — the scrap metal business is a $32B industry.
But the industry gets even more metal: Much of this massive metal market is powered by trash-preneurs who collect pieces of garbage from America’s post-industrial wastelands and resell them for profit, The New York Times reports .
So, how does scrapping work?
Scrappers drive around cities — often postindustrial, Rust Belt cities like Buffalo or Pittsburgh — and collect scrap metal before garbage trucks can get to it.
Then, they process their scrap, breaking it down into smaller, more valuable components. Scrap buyers usually pay 3x as much for scrap that has already been processed.
In the world of scrap, copper is king
Scrappers collect mostly metal — instead of, say, plastic or paper — because it’s the most valuable product to recycle.
But not all metal is created equal: Copper, which is in particularly high demand because it is used in everything from electric cars to local power grids, is particularly valuable.
Many scrap-preneurs use an app called iScrap, a price index for precious metals that helps scrappers decide whether to sell their metal immediately or hold out for a better price down the pipeline.
To the run-of-the-mill amateur recycler, professional recycling may seem niche. But, according to The Institute of Scrap Recycling Industries (ISRI), the scrap biz employs more than 531k workers.
These scrappy scavengers send scrap all over the world
Most American scrap metal comes from manufacturing towns that have grown rusty in the decades since their factories shut down. But the copper reclaimed from those towns shines again in sheets sent across the world.
China has traditionally been a big buyer of ’Merican metals, but since it began restricting recycling imports in 2017, American metal merchants — some of whom are 4th-generation scrap magnates — have shifted their focus to metal-hungry India.
The domestic market is huge, too: In 2017, ⅓ of the copper consumed in the United States came from scrap.
Pretty metal, huh?
The lawless land of Amazon listings is filled with unsafe and banned products
A recent Wall Street Journal investigation found 4,152 items for sale on Amazon that have been declared unsafe, mislabeled, and even banned by federal regulators.
Listings for 2k of these — including toys and medications — did not warn of health risks for children, and 157 were items Amazon claims to have banned for safety reasons.
Why is the ’Zon such a Prime place for problems?
Amazon once managed its own supply and distribution. But starting in 2001, Bezos and pals outlined a plan to incentivize third-party vendors to offer products at low prices.
By 2018, 60% of merchandise sold came from 2.5m merchants.
Amazon says it uses an automated tool to scan millions of products every few minutes, and that it blocked more than 3B items last year. But bad goods still make it through.
How did this fly for so long?
Amazon says it’s a forum — not a retailer — and as such is protected by the Communications Decency Act.
However, courts have begun to disagree, and Amazon has paid fines and settlements … albeit without admitting wrongdoing.
Meanwhile, some lawmakers are looking to beef up regulations on tech giants. But the question remains: Can Amazon control its platform?
A growing army of ‘Airbnb’ police gets paid to expose the addresses of homeshare hosts
Personal info about Airbnb hosts is supposed to be kept private — that’s what the company tells its hosts, anyway.
But a growing number of companies are paying contractors to track down that information and make it public, reports Vice .
City governments want Airbnb’s info to ensure compliance…
And they’re willing to pay private companies to track it down.
So companies with names like Host Compliance use a combination of automated tools and human contractors to dig up as much information about Airbnb hosts as possible.
The process is surprisingly low-tech: Contractors cross-reference information from Zillow, Google Maps, Facebook, local property records, and Whitepages to determine who owns which properties.
Then, these companies provide the information that has been unearthed by the contractors to city governments, which, in turn, use it to crack down on illegal renters.
Not everyone is psyched about doxing-as-a-service
Some critics argue that digging up this type of private information about Airbnb hosts is an invasion of their privacy. But city officials insist that, because the information is used to enforce rental laws, these types of services are beneficial to cities.
Other critics — including some contractors interviewed anonymously by Vice — also complain that companies such as Host Compliance offer inappropriately low pay and misleading bonus programs.
Postings — which are typically listed on sites like Amazon Mechanical Turk — typically pay $2 for a standard correct ID and up to $4 for addresses that are harder to track down.
Small business of the week: $0 to $8.5m in 4 years — by building pools
Every Monday, we feature a company started by one of our readers. Want your story told next? Fill out our Small Business Survey .
A decade ago, in the wake of the recession, Tim Maas watched his construction business crumble into financial ruin.
“It was a smoldering pile of ashes,” he says. “I lost everything.”
He tried his hand at various small online businesses — a wine marketplace, a corporate video platform, a radio show — but nothing stuck and he struggled to stay afloat.
Then, he got a piece of advice: “My friends said, ‘Tim, just do what you know how to do: Build pools.’”
In 2015, he cashed out early on his 401k (complete with a 10% penalty and taxes up the wazoo), and started Pool and Landscape AZ , an Arizona-based construction outlet specializing in pools.
Maas spent $5k on licensing, insurance, business cards, and marketing (mostly truck signs and brochures). He acted as his own sales person, leveraged his prior construction network for labor, and optimized his SEO keywords.
His first year, he pulled in $1.2m in business. Instead of taking a large salary, he invested his profits right back into the company.
Today, he builds around 200 new pools a year (averaging $35k each) and does ~45 big pool remodels (also averaging $35 each) — good for $8.5m in revenue. Accounting for an overhead of $6m (50% of which is material costs, and 35% labor), he’s $2.5m in the green.
What’s been the secret to his growth?
“I hire people with more experience than me, and I allow them to do their jobs as team players,” says Maas.
Stats at a glance:
Founder: Tim Mass, 63
Employees: 50
Years in business: 4
Cost to launch: $5k
Funding method(s): Personal savings
1st year revenue: $1.2m
Current annual revenue: $8.5m
Current annual overhead: $6m
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