Two weeks ago I quoted for the waste material which is not waste, but actual material offcuts which importantly is unused and is virgin material. being virgin brand new material is the important part here which will be used for the stuffing of the punch bags. The firm I quoted currently throws this away and going forward whatever is made will be used funding a charity community project. This also saves them on the number of skips they use monthly so there are definite savings to be had.
What I offered was nearly 5 x less than what we currently pay mainly to the fact that we have to collect and provide our own skip which has to be bought outright as no rental company is interested. The rental companies make money on collecting and dropping off empties which is not the case with our needs and it would be a permanent fixture offering only a basic rental fee.
The other pricing I had to factor into this was the staff required to fill the punch bags as this was included in the price that is 5 x higher. If you were not doing the volume then it would not be worth the effort and the figure of 54 tons per month suggests this is well worth it. The hope going forward is they can offer far more virgin waste material as this would increase the profitability of the business.
The stuffing of the bags will be done in house under supervision as yesterdays post with a blade being found in a competitors bag tells you how important it is to control your own quality. I have a hunch of who was doing the stuffing and I will be speaking with them next week now that I have a target price that was accepted. Everyone needs a starting point and I think they will only be too grateful to have an outlet to clear their waste material which more importantly is also virgin.
When I started this business off it was a quick learning process which quickly told me the cost was in the stuffing which may sound crazy, but it is true. The making of the skins that form the punch bag will become the most costly part once I am finished doing this which makes more sense to me anyway.
What I need now is tonnage and and a good 50 tons worth monthly after I have secured only 5 tons thus far. As they say someone's junk is another persons treasure and this is the case here with offcuts that seemingly have no real value, but they truly do.
Once you start crunching the numbers buying this so called "waste" at the right price would add an extra $100K to the profit margins and this is showing just how serious this is if done correctly. I expect the numbers of what we produce will rise even by a margin of 25% we would need 1 million tons of material waste yearly. Figures drive the business and why sourcing is key to unlocking the true potential.
