When assessing the precious metals refining industry, Dave Weinberg is as passionate as he is blunt: It’s not merely the weight and purity of precious metals that matters, he says, it’s also about having complete trust in the person behind the desk. “Trust and reputation are critical to success in this business,” says Weinberg, the owner of West Bloomfield, Michigan-based Scientific Metals.
The value of dental scrap usually isn’t known to customers until after it has been sent, melted and assayed. This can open the door to dishonesty and error. “For the most part, dentists put full faith and trust in their chosen refiner,” Weinberg says. “This is why they must look beyond the settlement report when selecting who to work with – like an iceberg, sometimes there’s more unseen than seen.”
Scientific Metals works with some of the dental industry’s finest associations, including the American Association of Oral and Maxillofacial Surgeons, the American College of Prosthodontists and the world-renowned Seattle Study Club, whose founder, Dr. Michael Cohen noted, “Scientific Metals has proven itself to be a reputable and trustworthy company for our clubs and members. Our club directors and members have been very pleased with the integrity of the refining results and the quality of their customer service.”
Comparing Business Models of Refiners
THE PROBLEM: No matter how well-intentioned a company is, it will not and cannot be competitive if its business model and structure aren’t efficient. Some firms will have more overhead and expenses than others, and therefore may be incentivized to charge more fees in one way or another. How does one go about determining how efficient a refiner is? Some issues to consider:
- How many sales reps are involved in, and being compensated from, a transaction?
- What percentage of a scrap return goes to sales commissions?
- Recently, some dental supply companies have partnered with gold refining companies to offer scrap refining services. While this provides an element of convenience, clinicians must consider the implications of having an extra sales rep involved on their scrap return.
THE SOLUTION: Look for a company that has the necessary skill and technology to accurately melt and assay the scrap while at the same time embraces an efficient and lean business model. For example, if your dental supply distributor has partnered with a refining company, consider how many entities are now involved in the compensation. You may have the dental supply company, the dental supply rep, the refining company AND the refining rep for the area all getting compensated in some way from the scrap transaction. That is precisely why Scientific Metals does not have a single sales rep, nor do we have any partnerships with dental supply distributors. It’s only logical that with fewer people getting a cut of your scrap return, you get to keep more.
Fees and Hidden Charges
THE PROBLEM: Relying solely on what refining fee a company promotes on its settlement sheet may be the biggest mistake a dentist can make. “What matters most is what you get back after accounting for all fees – and the focus should always be on the net bottom-line return, not on subtle differences in yields and rate fees a company promises,” Weinberg says. “As I’ve mentioned, like an iceberg, with some refiners there may be more unseen than seen. The promoted ‘refining fee’ may just be the tip of the iceberg; looming under the water there may be other larger fees and charges that can wreak havoc on your scrap return. “In a perfect world where transparency and honesty are not issues, one can afford to choose a refiner based solely on the promoted refining fees, but we don’t live in that world. Trust can only develop with consistent experience over time.”
THE SOLUTION: Weinberg notes that hidden or extra fees and charges can be crushing to a practice’s scrap return. In fact, extra fees on top of the refining fee can amount to an additional 30 percent deduction. That’s why Scientific Metals has none; there are no extra fees, charges or deductions. Its policies and terms are open and straightforward, with no tricky math and no skepticism.
How Much Can Extra Charges and Fees Influence a Scrap Return?
One clinician who substantially benefited from this no extra fees or charges philosophy is Dr. William Wong of West Allis, Wisconsin who initially submitted his scrap collection to a refinery who had been exhibiting at his state dental show. They had great credentials, with sales reps all over the country and even had a nationwide partnership with a leading dental supply company. Furthermore, they had a very reasonable refining fee. When Wong received his settlement offer from the refinery – $9,644.50, he believed it to be acceptable. But after reviewing and studying his settlement closely, Wong discovered charges and deductions in addition to the refining fees – all of which added up to almost 38% in total fees and charges. He declined the offer and had the processed and analyzed material, now in the form of a melted bar, returned to him. Upon a colleague’s recommendation of Scientific Metals, Wong submitted that bar to Scientific Metals and received a settlement of $12,879.59 – 34% more than the previous assessment. Both companies’ analysis showed almost identical amounts of precious metals in the bar. The 34% difference in return was totally attributable to the fees that were not easily seen in the initial submission. With gold and palladium prices at high levels, it’s time for dental practices to shift away from viewing their scrap money as a small afterthought and start approaching it with the same due diligence one would undertake with any other financial consideration.
