Eve of Destruction

A product destruction professional offers his tips for entering the business and prospecting for clients.

I get a lot of questions about how secure destruction companies can break into the product destruction

arena, but the first and most basic is: Where do we find the products?

The most obvious source is a company’s current customer base, most of which have electronic product(s) that need to be destroyed and/or recycled. Additionally, as manufacturers of computers and their components continue to produce more environmentally friendly products and as older products are retired, this should be an increasing source of material for those that wish to perform computer destruction services.

PROSPECTING

Beyond the obvious, however, budding product destruction professionals can target two primary markets for prospects. The first is manufacturing companies. There is not a manufacturer in the land that does not have product rejects (products that fail to meet quality control standards) and surplus inventory, and many manufacturers have product recalls. Whereas it used to be common practice to simply "trash" such rejected or recalled product, responsible companies want to be sure their unwanted products are destroyed properly, whether for financial or liability related reasons.

The second source to target when prospecting for potential product destruction jobs is distribution companies. Once the products are out of the manufacturers’ hands, they generally become the responsibility of a distribution company. In this case, they all have product returns, surplus inventory and also product recalls.

After they have found their prospects, the second question most companies looking to enter the product destruction arena ask is: How do we destroy the product?

There are a lot of different types of equipment available to perform the destruction of unwanted products and much of it is the same equipment that a company may be using for document destruction. What matters most is what your customers’ requirements are and what destruction means for them.

GETTING OUTFITTED

Once you know what your customers will be looking for in terms of their desired output, you can begin to consider equipment choices.

When we first became involved in product destruction, we used our paper shredding equipment until our needs outgrew the equipment’s abilities. We then worked with various vendors to custom build equipment or to purchase their off-the-shelf equipment. We currently use eight pieces of equipment in our product destruction facility.

You may also be faced with having to decide if it is worthwhile to invest in equipment to help you land a particular job. Only you will know if you have enough volume to warrant such a purchase. However, should you decide against making such an investment at the outset, you do have options and can still go after such destruction jobs in the future by outsourcing the work and making your money on the spread.

This leads me to the next most common question those new to the field ask: How do we price the job?

DETERMINING YOUR PRICE

There are three major components to determining the pricing for a product destruction job:

The quality of product (Can it be recycled or not? Is there a by-product value?);

The volume of product; and

The throughput achieved when processing. (This is really no different than pricing for a document destruction job.)

The volume of material and how to destroy its components are the simple considerations, but the quality of material is what can be tricky. Always get a sample of the product before giving your potential customer a quote. The value of the by-product can be your greatest variable. For example, if you are destroying pure metallic CDs or DVDs, you have a by-product value that can exceed the price to destroy the material, so pending the incoming volume of material, you may be much more aggressive on your destruction price. On the other hand, if you accept a job destroying standard backup tapes with a metal hub, you have no by-product value, and your price must factor in the cost to landfill the processed material.

Seeking a Return

Gauging the recycling returns from the obsolete electronics stream was the topic for a panel discussion at the 2007 National Association for Information Destruction (NAID) Annual Conference, which was April 11-13 at the Gaylord Palms Resort in Orlando, Fla.

Panelists said the metals industry, enjoying record demand and pricing, is eager to capture the metallic portion of this stream—from precious metals down to the steel computer casings.

But panelist John Chilcott of Earth Protection Services Inc., Phoenix, Ariz., warned destruction and recycling companies to be wary of the roller-coaster nature of the metals commodity markets. "Right now everyone wants to jump on the bandwagon [because] aluminum and copper are at all-time highs," he said. But, if a company bases its business model on soaring metals prices, "it’s a mistake," Chilcott cautioned.

Recycling the diverse stream of plastics used in electronics can be even more problematic, panelist Darren Arola of MBA Polymers Inc., Richmond, Calif., said.

The stream presents a complicated mixture of different polymers and resins on the front end, but end users of secondary resins expect a pure, uncontaminated product.

As for finding markets for the by-products that result from product destruction jobs, there are many resources, and it all depends on the product type. If plastic based, many firms nationally and internationally can accept the material, and typically a broker is used to purchase the material. If you have metal products as a result of a job, you can typically find local companies to accept the material; and, of course, the same applies to any paper by-products.

After you’ve addressed these basic questions regarding product destruction, there is still one important matter to consider: What security measures does the client require?

ENSURING SECURITY

At Total Product Destruction we have as many as 15 security criteria that we offer to our product destruction customers. As with any specialized service, you have the ability to charge your clients accordingly. Examples of the various security arrangements we provide include GPS tracking on all shipments to our facility, a security officer on site to witness the destruction operations (ours is on duty from 7 a.m. to 5 p.m.), video documentation of the entire destruction process and/or the ability for clients to dial into our camera system and, of course, a Certificate of Destruction that details that the needs of the client have been met.

If those new to the product destruction field take the time to ask themselves these basic questions and research the market in their areas, they will probably find that they have the tools and knowledge they need to get started at hand.

The author is president of Total Product Destruction LLC, Spartanburg, S.C., and can be contacted by phone at (864) 699-0701 or by e-mail at questions@totalproductdestruction.com.

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June 2007
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