Making money upcycling

There are two classic ways to make money from waste: a fee for materials received ("disposal fee") and a fee for materials taken away ("recycling income").  Except in the case of a monopoly (not uncommon outside the city), both are determined by the market.  A waste transfer station (i.e. servicing cars) is taken as an example.

The disposal fee at a transfer station is driven by landfills offering a service for cars.  Since landfills are geared to dealing with trucks, and so have cost structures driven by trucks, prices are set for cars without a great deal of thought.  The most common way is to look at the cost per tonne for waste disposal (say $100/tonne), assume 0.3 tonnes per car, and then apply the rate (i.e. $30 per car).  As the cost per tonne goes up, perhaps by landfill levy, carbon tax or simple landfill scarcity, then the disposal fee goes up with it.  A well located transfer station may be able to charge a small premium on the landfill, but also has transport and staffing costs to cover.  Not to mention the cost of landfill disposal (that $100/tonne).

Recycling income at most transfer stations is only earned from the sale of scrap metal (generally steel), cardboard and other high value, easily handled commodities.  Since transfer stations are driven by the logistics of waste handling, recycling income is insignificant.  Perhaps 1% of the total.  The beauty, of course, of recycling income is that it turns landfill expense into income.

And this is part of the secret of making money through an upcycling transfer station.  Working hard to separate and recycle waste means reduces landfill expenses and increases recycling income.  Clever work can increase the disposal fee for enhanced service provision (more on this later), and continued innovation can extract more and more value from the waste.  On the other hand, the clever work might be holding the disposal fee down to drive up volume and thus maximise overall profitability.  Or maybe a bit of both, moving with the market.

A successful business in the upcycling market works both sides of the business model, maximising income from disposal fees and recycling income.