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Payment Model For Commercial Recycling Business
August 30, 2011 12:56 PM   Subscribe

What kind of payment model is normally used for a commercial recycling business?

A friend of mine is starting a recycling business that will cater primarily to small businesses that go through a lot of recyclable material (coffee shops and milk/cream containers for example), and he is having a hard time figuring out what kind of payment structure to approach business owners with.

The plan is to take the recycling from the businesses to the depot to exchange them for the deposit on a weekly basis. The question is whether it is common with such businesses to offer to give a percentage of his earnings from the recycling back to the owner, and if so what percentage?

If this isn't the most common arrangement, then how much would it be appropriate to charge?

Thanks.
posted by paradoxflow to Work & Money (1 answer total)
 
Figure out what the common practice is, then price to compete with that.

I'm not sure, but for recycling empty beverage containers, I'd imagine the main competition is trash hauling fees, which probably aren't that high. And I doubt that their trash service charges would go down solely due to recycling.

So you have to offer them enough to primarily compensate them for the extra labor of separating out the recyclables.

Other incentives could include providing a nice-looking recycle bin in which the customers could collect the recyclables.

Also, there is the "PR" or "feel-good" aspect --maybe you could play this up so you wouldn't have to profit-share at all.

Last time I looked into this in-depth, it seemed that "recycling profits" were so razor-thin that the only way I could figure out how to come out ahead was to apply for some kind of tax-payer-funded grant to help cover costs. Part of the puzzle seems to be that other incentives, further up in the supply-chain, are at odds with environmental values more visible near the end of the process.
posted by markhu at 2:31 PM on August 30, 2011


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