The Business of Recycling
Recycling does not just mean recovering recyclable material. It is an entire ecosystem and the local curbside collection program is simply the beginning of the loop. A recycling business cannot make a profit unless consumers buy enough recycled products to outweigh the cost of collecting and processing recycled materials.
Businesses in recycling have had to challenge myths about high prices and low-quality products. They have had to make buying of recycled products and investing in green research and development part of their overall business strategies.
Some companies in the business of recycling are driven by the mission to protect the natural environment, while others are in it to make as big a profit margin as possible.
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Supply and demand
There are stories in the media about recycling centers that dump items into landfills or end up storing them after preparing them for markets that do not exist. Recyclable materials may indeed remain in storage for a while as recyclers wait for prices to rise to the extent that they can reclaim their costs and still make some profit.
Recycled materials often end up competing against each other, and this is particularly evident in the paper industry. Recyclers are now paying higher prices to get rid of low-grade paper that was a mainstay in the past. Competition for recovered material exports is also intense in the global marketplace.
The U.S. government has challenged the industry to develop the infrastructure it needs to incorporate recycled material into manufacturing processes by mandating recycling and setting high recovery goals. If this is to succeed, it needs a unified, coordinated approach.
Stimulating recycling markets
Costs of collecting and processing are likely to come down as systems are refined and technology improves. However, it is in stimulating recycling markets that government policies and business practices can make the most difference.
“Buy recycled” campaigns actively encourage nonprofits, businesses, hospitals and other institutions to buy products made of recycled materials. For many business managers, the changes begin by adopting new corporate purchasing policies.
Myths about buying recycled products
Certain myths tend to linger and can prevent strong growth of recycled-product industries. The three most prevalent ones are that they cost too much, the quality is inferior and they aren’t available in sufficient quantities. Contrary to these myths, companies can benefit from investing in recycled product lines.
Profitable partnerships between suppliers and distributors are developing as prices become more competitive. In many cases, suppliers are willing to guarantee competitive prices over a couple of years as long as they renegotiate prices at a later stage.
It used to be nearly impossible to find printers who printed on recycled paper for a reasonable price. This has changed, partly due to business customers forcing printers to compete and partly due to manufacturers offering better prices.
Benefits to businesses of using recycled products
Recycled products provide a number of crucial benefits to businesses. From a marketing perspective, the use of recycled office products or industry investment in technologies that use recycled feedstocks are helping to win new customers.
Investing in recycled products means more competition, which will accelerate design innovations and new technologies that can lower production costs. Obviously, recycled products are less energy-intensive and have a lower environmental impact.
An emphasis on the recycling industry might help to revive local economies as long as government policymakers and corporate managers are willing to work as partners.