Salvage Wire

Salvage Wire
Helping Automotive recyclers become leaders in their industry

Thursday, 21 April 2011

Cost of the operation

Very interesting morning yesterday working with an excellent recycling yard in South Wales. We were looking at costs, cost of purchasing stock, cost of processing the vehicles and the value of the vehicle as pure scrap.
This organisation have got all the records to hand and we were able to see how much it cost them to purchase stock, how much it cost to process end of life vehicles, the value of the scrap elements - hulk, alloy wheels, cores, catalytic converters etc. We also looked at parts sales and revenue.

What we did find is that the average purchase price was close to half the cost of processing the vehicle, and they cleared in excess of £200,000 profit annually just from processing end of life vehicles.

it got me wondering, how many other operations have access to similar information from their records? Unfortunately I believe that only a very small number of auto recycling businesses will have this knowledge - those that do not have this data are at increased risk of financial problems - knowing your turnover, costs, revenue streams is so important in the current financial climate.

We are now heading into a couple of long weekends - ideal time for owners and managers to take a few days away from the de-pollution bay, and take some time out. So as you fire up the barbeque and open that bottle of wine - think about the business and how much more profit you could be making if you take time to analyse where costs can be saved, where more revenue could be obtained, and how you measure this.

Salvage Wire can help, see our website for more detail on how to contact us.

Happy Easter

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