Terry's out of Business? Why are so many e-waste processors going under?
No more than 5 months ago I was speaking with Terry Jones the owner of a brand new e-waste processing company in New Market. His future was bright, He had a new gold refining plant with the ability to process 250 kg of e-waste per day. Excited about the future and ready to take on the world, Terry told me he was expecting to gross 1.2 Million per month by just focusing on high grade e-waste.
I called Terry today and he told me he was no longer in business. After just 10 months running his e-waste gold extraction line he told me some real horror stories. The first, as he says "was the biggest learning experience ever about the state of this industry."
Apparently Terry met an e-waste collector who told him they would sell him 10 tons of mixed grade CPU's for just $12,000 USD per ton/ As soon as he said this I brought up the fact that for a collector to have 10 tons of processors means they would need to dismantle more than 60, 40 foot truckloads of computers. To put this into perspective, that's 1200 metric tons of Whole computers. or around 139,655 PC's/ Maybe that's not good enough I should elaborate. A fantastic well trained team of 8 professional scrappers can completely dismantle 1 ton of computers in 1 hour, If they had access to 1200 metric tons of computers then it would take them 150 work days to extract the processors from each one to obtain 10 tons. Then to sell them for just $12 per kg? I knew what Terry was about to tell me.
He sent a payment deposit, and waited 2 weeks, then 3 then 6, finally he realized the processors, didn't exist.
"This was a minor setback" Terry said, "I learned my lesson and started going to see the material I was purchasing."
From that point on Terry and his partner Bob were on a mission looking for high grade e-scrap to fill their new gold line. What they learned next was even more important. "We found everyone had sorted everything, and expected prices that were nearly 5% under the actual gold content in the material. Some were even asking more than the gold content, stating there was tin and copper value in the scraps they were selling,"
They muddled along for a few months like this, finding smaller scrap yards willing to sell 50 to 100 pounds of processors an ram at decent prices. But in the long run they had to start offering a revenue split for the items they were after. They offered 90% of the gold value from any material they processed and finally found their first big supplier.
A collector in North Carolina offered them 23 tons of various gold bearing material from e-waste IT and telecom equipment. They took the contract, worked nearly 24/7 an entire month and a half processing the precious metal bearing material, extracting every last drop of gold they could and splitting it honestly as they promised the supplier.
Apparently that wasn't good enough as the supplier filed suit against them for neglegence and fraud, saying they cheated him out of 240,000 USD. This was the straw that broke the camels back.
I sat for a moment after hearing this story and asked Terry what he was going to do? He said there was nothing he could do. The company was broke, the machinery was all but sold off and he was looking for work now.
This isn't the first, and I know it won't be the last of the stories I hear about e-waste recyclers starting up with gold fever. If I have any advice for anyone in this industry about starting an e-waste business, it's this. Get some advice from people who are in this industry first. You can make money, it can be sustainable, but this industry is full of surprises. It's also full of people who get into it for the wrong reasons and without the proper funding and resources to stay afloat during the hard times.
Unfortunately I know this won't be the last Terry I hear about. But if you do want some advice about starting an e-waste business. My team and I are always happy to help. Reach out and we can get you on the path to an extraordinary e-waste business. We'll even guarantee it. Let's keep e-waste processors in business. visit us at https://www.pfane.org We are here to help the e-waste community thrive.