Actually, we sold them both on an assay basis and a per-unit basis.

We would get offers from Unit Buyers and compared them to our assay estimates based on our hedge positions (contracts to sell PGMs at a specific price). Then we chose the option that gave us the highest price.

We would look at our hedge position relative to the market pricing. Depending on which selling method we thought provided us the highest return, we sold on that basis.

To us, it did not matter if we sold on a unit basis or an assay basis. We sold whatever way got us the highest value. And we think Auto Recyclers should adopt the same strategy when selling their scrap catalytic converters. This is one of the underlying reasons we started ScrapCATapp.com.

Our mission statement is to help our converter Sellers get the highest possible price for their converters. If we had a Seller who was rigid about selling via assay, we would explain to them that the way we sold on an assay basis is vastly different than how they sell on assay basis.

This is a good point. Our process of selling via assay was much more structured than a typical Auto Recycler. The main difference is that we had the capability to cut all of our units, and then we had the analytical skills to assay our material. Meaning, we knew EXACTLY what we were sending out “BEFORE” it left our facility.

If you do not control the cutting of your converters, you will never know:

In addition, if you do not control and manage your own internal sampling process, you will never know:

In contrast to what we were doing, most assay Sellers are doing what we would call a “poor man’s assay”.

We call it a “poor man’s assay” because most Sellers, if they are honest with themselves, have to admit that they have no idea of what happens to their converters once they leave their facility.

Once Sellers send their units, they get back an assay report from the Buyer in ~3-8 weeks. But the problem is, they have no way of verifying the accuracy of these assay reports they get back.

All of the numbers on these reports come from the buyer. There is not one number on these assay reports that the Sellers can effectively challenge.

They can’t challenge the weights because they did not cut the units.

They can’t challenge the assay results because they have no idea what they sent the assay buyer and they were not in the lab analyzing the material sample.

The real problem we see with a “poor man’s assay” is that it gives the transaction the illusion of being transparent – but in reality – it’s not truly transparent.

It is a big problem when it happens, and by the time the problem is discovered, it is too late for the Seller to do anything meaningful about it. Unfortunately, there is a long list of Sellers that have been victimized by assay buyers over the years.

And to be fair to the assay buyers, most of them are honest and trying to do a good job. The problem is that numerous “honest” errors can be made by them that cannot be caught or checked by the Seller under normal circumstances.

The only way for a Seller to truly know they are getting an honest deal is to do what we did. The Seller must control the cutting of their converters and they must have their own internal sampling facility and skilled technicians to monitor it.

The only way I know for a normal Auto Wrecker Seller to safely sell their material on an assay basis – and have some independent protection – is to use the ScrapCATapp.com auction platform.

We have set up the auctions and put certain conditions and restrictions on assay buyers that help protect the Seller’s interests.

The first condition is that assay buyers bidding on your converters must make a bid that includes a guaranteed upfront, non-refundable pre-payment to the Seller. This is a payment that they make BEFORE the converters leave the Seller’s facility.

This upfront payment is a guarantee. So as a Seller, you will know, at a minimum, what you will receive for your converters.

The second condition we impose on assay buyers is that assay buyers must also provide the Seller, with a good faith estimate (not a guarantee) of what they expect to pay as a Final Balance Payment.

Yes there are. By selling your converters on our online marketplace by unit AND by assay, you, as a Seller, can now confidently compare unit bids and assay bids directly against one another… This allows the Seller to see all options and do what is best for their company.

As an example, let’s say you have a unit buyer offering you $10,000 for your units.

And let’s say you have an assay buyer offering you a Guaranteed Pre-Payment (Non-Refundable) of $9,000, plus an estimated, but NOT guaranteed, Final Balance Payment of another $4,000 at a later date after the units have been processed and tested (assayed).

With this information, you can decide which is the better option.

I see, this auction format allows me, as a seller, to compare a “bird in the hand” with “two in the bush”. If I am following you correctly, I can take $10,000 now or $9,000 now with a hope (but no guarantee) that I may get another $4,000 later.

Is that right?

Exactly Right! As a Seller, it is up to you to know and set your own risk tolerances. The ScrapCATapp auction platform gives you the opportunity to compare your options. This is something you never can do with standard assay transactions in the market today. To answer a question from a while ago, this is the perfect way for a Seller to avoid a “poor man’s assay” and try out an assay transaction.

One of our sellers put it best:

“What I like most about the ScrapCATapp platform is it doesn’t try to make me into, or require me to be, a converter expert – but it gives me enough knowledge to understand the pros and cons of my options.”