I know one scrapper, he often stops by my warehouse on his way to scrap yards, and sells me something or other.
Last week he sold me a 15HP food processing machine for $X.
I am guessing that he paid $X/3 to $X/2.
I promptly turned around and sold it to a process industry dealer for $7X.
I am pretty sure that this dealer will turn around and sell this same machine to his contacts for $20-30X.
What interests me is, what is the difference, why did someone sell this to the scrapper for so little, why did he have to sell to me for lessthan what he could get etc.
And I do have some answers. The scrapper had no idea what he was selling. The company who sold it to the scrapper probably did not care about the money and its manager probably pocketed some cash. I cannot get the price that the "process industry dealer" will get, because I do not have the buyers lined up and because I do not have the capital or room to sit on this item for a long time.
Still, it is fascinating how much is this "value chain" stretching.
i