How We Make Money from Recycling
Did you know that in addition to being good for the environment, recycling can also make money? At Carolina Fibre Corporation, we actually sell the materials we get from our suppliers and, in many cases, make a profit—especially if we keep our expenses, such as transportation costs, down.
When people learn this tidbit, it raises some questions. The main one is whether individuals can make money off the things they recycle, too. In today’s post, we’ll talk about how this aspect of recycling actually works.
At Carolina Fibre Corporation, we bid for various grades of recyclable material in numerous small auctions via email and fax. This happens monthly and sometimes weekly depending on our suppliers. When we win a bid (yay!) we have material to sell. When we lose a bid (boo!) we’re faced with a slow month. No matter what, we eagerly wait for the first week of the month to roll around, because that’s when the market’s price reports are released.
The Price Report
The price report is a national publication released on the 5th day of each month, and it guides pricing throughout our industry. This means that Carolina Fibre Corporation isn’t the only company that follows this outline—the whole recycling industry pays attention to it, since it’s based on market research conducted throughout the month to determine supply and demand for various recyclable items. These recommended price ranges then determine supply and demand for various recyclable materials in eight regions across the USA.
How does supply and demand affect the prices of various materials? Just as you might expect. To demonstrate this, we’ll use the example of paper.
If the mills are full, they don’t need new material. Because there is an excess of paper, the prices fall. Suppliers have to stockpile materials in warehouses and wait for the prices to go up—if they sell when the price is low, they’ll lose money.
When the mills are running low on material for making paper, they’ll pay more to get what they need. This is what causes prices to rise. If suppliers have warehouses full of paper, now is the time sell it and make a profit! They offer these materials to the mills that are willing to pay the best price, which can erupt in bidding wars and drive the price up even further.
The law of supply and demand doesn’t just affect the price of paper and other materials. Like a ripple in a lake that spreads outwards, it touches other parts of the process as well. For example, if there’s less demand for materials by our export customers, we’ll hire fewer cargo ships to transport goods. This means there will be higher shipping costs that are passed on to overseas customers.
As you can see, the business side of recycling can be tricky, with a lot of moving pieces and a lot of changing variables. Still, it’s important to follow the markets, pay attention to supply and demand, and get our customers the materials they need. It’s good for business, good for consumers, and good for the planet, which is why Carolina Fibre Corporation will keep doing it!
Remember, no matter how much you do or don’t make, it always pays to recycle. After all, it’s an investment in our earth!