Creating a win-win scenario
Expense To Profit’s Expertise In Waste & Recycling
ETP was introduced to an aviation sub-contractor via its financial advisory team in April 2018. The goal was to review their expenses and determine if there were opportunities for reductions.
After the initial review, we were able to renegotiate with the existing sand vendor a reduction of ten percent (10%) on the cost of the sand purchases.
We discovered that they were losing out the revenue for the recycling of the non-hazardous used sand and high quality 55-gallon drums.
We had discussions with the existing provider that removed the sand to change their services from refuse to a recycling program. They informed us they could not provide that service. The company notified them of their intent to discontinue their services.
Our team interviewed multiple vendors for the removal and recycling of the non-hazardous used sand. A new vendor was chosen, and this became a source of revenue, reducing the overall product cost.
We determined there was a robust secondary market for this 55-gallon drum. We then successfully negotiated new terms with the existing vendor providing the drum removal.
The vendor provided at no cost a trailer for the client to store the clean empty drums for daily pickup. This provided the company with two benefits. First was a way to protect the integrity and drum quality. Second, the vendor no longer needed to spend time loading the drums on his trailer. The final task was negotiating a fifty percent (50%) revenue sharing arrangement from the resale proceeds.
Aviation Sub-Contractor Project Results
| Category | Cost | Revenue |
|---|---|---|
| Sand in Drums: | $131,860 | |
| Sand Refuse: | $36,240 | |
| Drum Removal: | $52,000 | |
| Annual Costs: | $220,100 | |
| Sand Recycling: | $110,335 | |
| Drum Recycling: | $219,970 | |
| Annual Net Revenue: | $100,239 |
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