It would be great if you could sell your house and not give away any commissions or brokerage fees and keep more or all of the sale price. The same principal applies to your precious metal scrap. It would also be great if you could melt your precious metal scrap right in your office. You could then determine with certainty the value of the scrap and not have to flush away a big chunk of your scrap return money on sales rep commissions.
While it may not be possible to have a refinery in your office, Scientific Metals provides the next best option. Its sleek business model of not having any sales reps aims to provide dentists with a larger settlement percentage – which means more money to your bottom line.
The Profitable Dentist sat down with Dave Weinberg, head of operations and son of founder Mark Weinberg to discuss the dental scrap refining industry and how its lean business model has made a dent in the scrap metal industry.
TPD: For those who don’t know much about Scientific Metals or who haven’t read last year’s article, tell our readers how you use cost efficiencies to return more money to dentists for their scrap metal.
D.Weinberg: We heard from dentists around the country who questioned the amount of money they were receiving for their scrap. They felt that with inoffice cash payments, they were leaving money on the table by selling for cash to a middleman. And in the case of refining companies with sales reps, that too many hands were in the scrap cookie jar – meaning too many people were getting a cut of the value – leaving the dentist with less than a stellar return. As a result, we made a strategic and philosophical decision many years ago to completely revamp our business model to address this. We felt if we could considerably lower our costs somehow, we could then begin to deliver a scrap return that no one could match. We decided to go with a direct refining approach without ANY sales reps, commission or salary based.
TPD: And this model has a name?
D. Weinberg: Yes. We refer to this model as the Amazon.com of the refining industry. Why are books and computers cheaper on Amazon than in the big box stores? Simple, Amazon has less overhead and can therefore have better prices. The same applies to refining – less overhead equals better prices, which in the refining world means higher scrap returns. I think Dr. Mark McClure, DDS in St Louis summed it up when he posted about us “Simple, no layers of sales reps to pay, so the best return on your scrap. Period”
TPD: How has this philosophy evolved over the last few years?
D. Weinberg: I would say our business philosophy has been sharpened and refined more than it has evolved. We’ve really cut costs to the bone in order to deliver scrap returns that others simply can’t match. After all, the precious metal belongs to our customer, not to us. Of course we invest in technology and equipment to ensure quality, safety, and accuracy in our melting, etc. But we are guided by one constant objective- to accurately determine the value of our customer’s scrap in the most economically efficient manner to ensure our customers unlock the true value of their scrap.
TPD: You mentioned that over the years you have been approached by dental supply distributors who wanted to partner with you and have their reps collect the scrap metal while they were in the offices selling their other products. But you declined all of these partner proposals even though they may have expanded your market share and ability to cover more territories. Explain to TPD readers why you declined these proposals.
D. Weinberg: It was not a difficult decision. We have seen a new trend whereby large dental supply distributors have partnered with refining companies, collect the scrap from offices and then send it to the refiner. We decided against this approach because we felt we could deliver a superior scrap return by not having to both pay dental supply reps a commission and financially compensate the dental supply company in some manner. We want to keep our costs low and pass on those cost savings to the dentist in the form of higher scrap returns. We believe the scrap belongs to the dentist and that, as Woody Oakes stated “Why forfeit a piece of your scrap return when you don’t have to anymore?” Simple.
In this sluggish economic environment, every dollar counts. Many dentists seem to be appreciating and acknowledging the benefits of our lean business model to their bottom line. Recently Dr. Essen in Florida called me to express his concerns that there were too many layers of fees and commissions deducted from his scrap return when he submitted his precious metals to a refining company who had partnered with a large dental supply distributor. He ended up asking this refining company to return his processed metal to him. He read about us in one of the dental journals and sent us the processed metal he had returned to him and he received $2000.00 more for the same exact bar.
TPD: What do you do to continue to ensure dental practices are getting the most money for their scrap?
D. Weinberg: The precious metal belongs to the customer and not to us. And we take this motto very seriously. As Woody Oakes wrote “The scrap has a finite and known value and it is your job to get a reimbursement that best captures this known value, especially in these tough economic times.” So everything we do is with the one goal in mind – lower our costs to help capture that value Woody refers to. On top of being the most cost efficient with regards to labor as mentioned earlier, we also don’t have bloated expense items such as sending out scrap collection jars across the county and being a fixture at every trade show in the country. Yes, I’ll say it again, lower costs for us mean better scrap returns for our customers. Refining companies with layers of sales reps and bloated expenses may witness a reduction in the available pie of funds available for customers’ scrap payments. And that’s not a situation we want to be in.
TPD: What, exactly, can Scientific Metals guarantee when a dental practice sends you their scrap?
D.Weinberg: We can guarantee that no sales rep is getting a commission on your scrap and none of your scrap proceeds are going to any third party company for brokering the transaction or bringing in the scrap. The bottom line is that when you send in your scrap to Scientific Metals, you get results second only to if you melted your scrap metal right in your office.
TPD: Are there any drawbacks from the company’s point of view of not having any sales reps on the road?
D.Weinberg: Not constantly being in the dentist’s or assistant’s ear means we have to rely on other avenues to communicate our philosophy. And this is especially true now that some of the large dental supply distributors have included picking up dental scrap as a service offered. But we’re confident in our message and that dentists realize that having another hand in the cookie jar only takes away more from their bottom line scrap return. It would be sort of like paying a broker to find you a real estate agent.
TPD: Any real life examples you can share that illustrate why a dentist should care which company refines their precious metal scrap?
D. Weinberg: Yes. Recently I received an email from an existing customer of ours in California–Rolling Hills Dental. The staff told me someone in office made an error and mistakenly sent their scrap jar to a different company and the mistake was very costly as their scrap return with the other company was almost 65% less than what they had received with us the previous year with a comparable amount of scrap.
TPD: What are some final words of advice you would like to leave dentists with?
D. Weinberg: I think Woody Oakes summed it up best when he said with regards to our business model of not having sales reps “Why potentially forfeit a piece of your scrap return when you don’t have to anymore?”
3 Tips To A Better Return
1) Do not sell your scrap for cash. It has been reported that dentists may be receiving as little as 30-50% of their scrap value as a result of the deeply discounted in-office cash spot transactions. It is nearly impossible to accurate determine the precious metal content with just a visual inspection. As someone pointed out very humorously “For door-to-door scrap buyers to tell you precisely the precious metal content of your scrap, they’d need a furnace and refinery in their briefcase.”
2) Study the business model of prospective refining companies. How many people are getting a cut of your scrap return? Does the refining company have to pay out commissions to anyone from your scrap return profit or are you getting to bypass that step? Is the refining company having to pay a finders fee or split to 3rd party reps who broker the deal? For any batch of scrap larger than just a few crowns, direct shipping to the refining company with the most economical business model may prove beneficial to your bottom line.
3) Don’t be lazy. Choosing a company to send your precious metal scrap to is a serious choice and should not be taken lightly. You should conduct your due diligence and not just hand over your precious metal scrap to the company whose jar is sent most often to the office or whichever company knocks on your door most frequently. Go with whom your colleagues have had success with and ask questions.
You can contact Dave Weinberg at 1-888949-0008 or dave@scientificmetals.com. www.scientificmetals.com.
