Optimization; or Patience is a Virtue

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When I first started scrapping, I was so convinced that breaking everything down was the best way to make more money. The thought of optimization wasn’t part of the equation at that point. I would strip every thing down to the last tiny wire, squeezing every last drop of money out of each load of scrap, and then I would sell it as soon as I had a chance. It wasn’t a bad way to do things…But I was trying to optimize my scrap, not optimize my time, so I was never really reaching my full earning potential.

In a standard engineering problem, every single dynamic is accounted for in some sense and then optimized using efficient computer algorithms. I don’t have that much time or resources, so I just do the best with what I know!

Lets take stripping wire by hand for example. That may or may not be worth it depending on how fast you are at it, and how much wire, what length of wire, what you get paid for insulated wire, etc.

Sometimes it’s not always better to tear materials apart. For example, I used to strip the copper out of microwave transformers and motors. I got wise after but only a few trips to the scrap yard.  Take for example a microwave transformers weighting in at close to 10 pounds. At 30 cents per pound for copper breakage, that nets me $3.00. Great!

If I break them apart, you may get ~1 pounds of copper and ~9 pounds of steel. so at maximum that is

1 pound of copper @ $3.10/lbs = $3.10

9 pounds of steel @  $0.10/lbs = $0.90

+ ten minutes to rip apart the transformer

$4.00 per 10 pound transformer

So I had $3.00, I now have $4.00. That means I made $1.00 in ten minutes.If I did this for an hour, with 6 transformers, I would be making $6.00/hour.

(All of that was calculation with hypothetical prices, but that doesn’t make the process I used to come to my conclusion any less valid.) Weather or not that is worth an hour of your time is for you to decide.

In some areas, scrap yards don’t pay anything for transformer except shred price. In one of these areas, you would probably want to break down all of your transformers before selling them. In other areas, they pay up to 45¢ per pound for copper transformers. In one of those areas, you would not want to break down your transformers, because they are paying you MORE then what you get for breaking them down.

But some may be saying, “Well what is wrong with making just a few extra cents per transformer? I have nothing better to do with my time then take this stuff apart, right?”

Firstly, there are so many other ways to make money scrapping, so there is always something more useful to do. Secondly, let me answer that former question with another question, “If you were to save all of those transformers for a whole year… What would they be worth then? ”

I know that If I hold onto all the transformers I get for a year, I can easily get 1500 pounds of transformers which is roughly 150 microwave transformers. If I call up my yard and say, “I have 1500 pounds of chunky copper breakage, what can you do for me price wise?” I’ll be getting more then $.30 per pound! I could easily call various yards until one agreed to pay me $0.35/lbs, which is 17% more!

If I had broken each one of those 150 transformers down and sold each separately as copper and steel, I would have made 150 transformes *$4.00 each or $600. If I sold a large heap of 1500 pounds of copper breakage (150 transformers) without tearing them down for $.35 per pound I get 1500*$.35 = $525….. So by doing nothing at all, just saving my motors until I have a larger lot, I am making more money. Am I making $600? NO. Am I making $75 dollars more, however, for doing nothing but holding onto my scrap. ($75, to put it into perspective, is the same amount of money I would have made by tearing apart transformers for 12.5 hours.)

This type of efficiency has proven very fruitful for me in the last year and a half. I saved lots of scrap copper and such, which durring the recession was worth a mere fraction of it’s value today. I plan on sticking with this type of workflow, seeing as analysts don’t see the price of copper dropping below 3.50 any time soon!

And with that optimistic outlook on the fruitfulness of the future let me say Good Luck Scrapping!

Please comment!

{ 13 comments… read them below or add one }

cdltpx December 6, 2010 at 3:39 am

Sounds like a plan. My grand pappy use to scrap steel mostly and would go for that stuff sure we were strong as ox and could lump that stuff but he had a commercial grade single axle and could make trips to the scrap yard with ease using that equipment. Your way is logical in the sense you can assemble all your material use a truck only one day and not have the added expense of a truck maintence and worse INSURANCE! If I were as you I would go for that which would make sense to break down and the hard stuff let them break it down. Sometimes you need to use air hammers to break down parts they can chip down easily and get to the core take off the easy stuff if there are a few strands left so what as long as you get the bulk of the treasure the soft copper. Prices will rise our USD is lower in value flip inflation is gonna kick out ass soon.

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Anonymous February 21, 2011 at 11:29 am

Good God, what a run-on mumbo jumbo rsponse.

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Anonymous March 8, 2011 at 5:07 am

Only used about 3 periods in the whole paragraph. He must be high.

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Anonymous June 17, 2011 at 7:42 pm

It may have been a run on paragraph, but he kind of has a point.

If there is a treasure that is easy to get to and will get you a higher price then split it out. If it is going to take a bunch of work, leave it for someone else.

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Raphael August 18, 2011 at 7:19 pm

I am a father of three children and a hardworking man trying to find a way to make extra money. I’m trying to educate myself on how to scrap metal, this site has been very helpful.
Thanks and God Bless you

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ScrapMetalJunkie September 8, 2011 at 6:05 pm

Thanks for the warm reply Raphael! Best of Luck to you and your family!

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Chris September 8, 2011 at 1:48 pm

Hi. I appreciate the information on your website. Help me to understand your 15 lb transformer example. A 15 lb transformer @ .25 is $3.75, check. Now if it takes only ten minutes to break out 1 lb of copper leaving 14 lb of steel, doesn’t that translate into $6.50? ($3.00 for the copper and 14*.25 = $3.50 for the steel)

If this is the case then the ten minutes I invested would actually be at the rate of 16.50 an hour, seeing that the 10 minutes I invested got me $2.75 , ($2.75 * 6 = $16.50 based on the assumption that I could knock out 6 of these in an hour)

I didn’t understand where the $4.15 came from , maybe that’s where I’m going wrong. You say in your post that:

“If I break them apart, I will usually get maybe one pound of copper and 14 pounds of steel. So 3.00 + 14*.8 + 10 minutes = $4.15″

But $3.00 + 14*.8 = $14.20 ! Given that calculation, the ten minutes spent would have netted me $10.45 or $62.70 an hour! Where am I going wrong?

Anyway, the premise of your post is a good one, give yourself a break but not atomizing everything, accumulate bulk and get a slightly higher price.

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ScrapMetalJunkie September 8, 2011 at 6:53 pm

I’m sorry, what you read had a typo! I didn’t mean to say 14*.8 for steel. I meant 14*.08 for steel. This was written back when steel was $.08/lbs. I’m guessing when I originally published it, everybody just knew what I ment because it was standard. Now steel is more like 11¢ per pound, so I used that number instead. (You used 25¢ per pound for steel in your comment, but I don’t think you can sell the steel used in a transformer for that price. It is usually contaminated, has many laminated sheets, etc. I could be wrong, however. )

Also, I’m glad you pulled to overall message out of the post. It is one of my earlier, less well-formed articles, but I guess it got the point across.

If you have any other comments, please feel free to share!

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Chris September 9, 2011 at 2:28 am

Thanks for your detailed response. I’ll be looking forward to review more of the info on this site. I’ve really learned a great deal thus far.

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ScrapMetalJunkie September 9, 2011 at 2:55 am

I glad you like it! Enjoy! You may want to consider joining the forum.

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Jimmy December 12, 2011 at 9:56 am

Well written son, I do it the same way, I find my time to be worth more than the time and headaches not to mention the amount of times I smash my hands with a hammer trying to pry the copper out of the transformers.

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Jed77 February 19, 2012 at 7:07 pm

I’m in the same boat as Raphael(3 kids and trying to make extra money) and I am learning a ton from the site. By far the most informative site I have found on scrapping. I already had a passion for scrapping but this site is really taking my passion to the next level.

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ScrapMetalJunkie February 20, 2012 at 7:34 am

Thank you very much for the warm comments! I wish you the best of luck, especially with regard to scrapping!

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