Scrap/Value

Value, like beauty, is in the eye of the beholder. We look at something and think ‘that cost me £400 that did’ and refuse to believe that four years later its worth is around a tenner. We forget that it cost £400 but that is different from what it was worth. You paid about £250 for the little Apple logo for a start or the swoosh, or the Microsoft thing.

I will always remember being on the M25 driving home one evening when my heavily pregnant wife rang me to say that she had been out with her parents and that they had very kindly bought us a pram cum pushchair cum car seat affair. With almost gay abandon she told me that it had cost them almost £700 (in 1999!) just as a beaten up old BMW overtook me doing about 90mph with a sign in the side window saying ‘for sale £695ono’. Worth and value, two very different things.

However, the price of such second hand cars is actually quite a good comparison to second hand IT equipment. You buy your car for say £10,000 and then drive it like a bat out of hell for five years until the clock reaches maybe 70,000 miles and then you get it valued. You know whether you think that price is fair or not. You know if the car is falling apart, or if the clutch is about to go. You expect it to be worth very little. And if it wasn’t working it would not be worth much at all, just scrap, even if you have no idea what scrap value is. It’s just something people say.

But with your old desktop the reverse is true. You know that it is too slow to run the programs you want to use reliably. You know it has started crashing on a regular basis. You know it gets awfully hot if you use it all day. You know it is five years old and was not exactly high spec back then. So having bought a shiny new one which cost you £499 you are naturally not best pleased when some fool like me suggests it will cost you to remove, sanitise and recycle.

Let’s ignore the game changing effect of volume for a minute and look at your average five year old PC in isolation. Yes it did cost you £499 sixty months ago. That is irrelevant to its value now. Has it been well used? Yes, it flipping well has. Was it top of the range when you bought it? No, it was the PC equivalent of the family saloon car. Why are you getting rid of it? Because it is on its last legs and will not do what you want a PC to do now. Ok so now who is the fool?

What people forget is that we have legal responsibilities here. Every business has to recycle WEEE responsibly and prove that they have done so, if necessary. The latter bit is less likely to happen of course but it does not change the regulations or the risk. And every business has to comply with the Data Protection Act. So, you really need some paperwork and you really need to make sure this is going to someone you can trust. But you still don’t want to pay, do you?

You pay for your bins to be emptied. Not the same though is it? I mean paying to get rid of rubbish is accepted, because it’s your rubbish and it is...well...rubbish. You created it and unfortunately you have to dispose of it and so you pay for those bins round the back of the building just like you pay your council tax at home, to have the bins cleared.

This PC isn’t rubbish, it cost £499 remember. Yes it doesn’t work very well and it cannot cope with the latest software you use, but it’s not rubbish. Not in your mind at any rate.

Ok then, you sell it. I really have had customers say this to me. ‘I’ll put it on eBay’. This is the PC that gets quite hot, you’ll recall? The one that crashes? The one that can’t cope with the latest software and you expect to sell it on eBay? And what are you going to do about software, because that stuff on the PC is licensed to you, and although it is transferable, do you want to transfer it? What are you going to put on your new machine? And most importantly of all, what are you going to do about your data on that old machine?

You could, like many people do, just shrug and say you’ll risk it. You could, like many people do, get away with it. Or it could all go a little pear shaped and Genghis Khan and his hordes (the information commissioner to you) could ride over the horizon and fine you up to £500k. In a few months he might even throw you in the chokey too. Given half a chance he will put you on the rack as well, or burn you at the stake.

Sensible people would not sell that PC on eBay. Too complicated, too many potential comebacks. A few would sneak it down the local tip and pretend they were a consumer, but of course the data is still there. The risk is still there. So in the end most people recognise that they have to use someone like eReco. And they still baulk at the cost. Any cost.

Volume becomes crucial here. If you are a big company you dispose regularly and have some sort of routine. Once or twice a year maybe, a nice full van load. eReco charge £900 for a van load, which can weigh up to about 1500kg but we still charge extra for data wiping on top. With these sorts of quantities, we have more scope for getting some value back for you. If your 5 year old PC’s (75 is a about a van load so let’s take that as our hypothetical quantity) pass the PAT safety test we can find a market for even some fairly low spec machines at around £20 each. So we might sell them for £1,500. Our standard agreement is a 50:50 revenue share, so you are due £750 less our sales costs, which might include loading new software for instance. But let’s say for the sake of argument that we don’t have to load any software and you get back your £750.

So now getting rid of a whole van load of waste has cost you £150 + data wiping at £5 which is another £375 on 75 PC’s, so that is £525 or £7 a machine. That is £7 to load it on a van, transport it and log it, wipe it, provide waste transfer notes, asset lists and certificates of destruction, PAT test it and store it until we sell it.

In reality of course, a number of the PC’s would fail the test. A number of hard drives would fail the erasure process and thus would have to be destroyed, so the costs could rise. But as an example it all sort of stacks up. £7 per PC seems like a fair price.

My point being if you have volumes to recycle, cost effectiveness and value for money are relatively easy to achieve. Saving the Earth does not cost the Earth.

But our one PC could end up costing £50 or even a bit more to recycle. And we can only get that low if you are easy to get too on the way back from somewhere else. And that can make the whole process seem unfairly expensive. Which I understand, appreciate and consider. But...

Unfortunately, the same rules apply to all businesses and organisations, regardless of size. You have to do this stuff or risk the consequences (you remember, Genghis; stakes, racks and burning). Which is why these people who offer free collections suck in so many people.

On the volume side, if you are collecting 75 PC’s a free collection is possible. If they do not offer you any cash back (and they won’t) they get £1500 worth of kit. On our cost base, you could do that and still make a profit. Not a huge profit but a profit nevertheless. But if ten of the PC’s failed the PAT test that profit would disappear, and you do not know what state the kit is in before you collect it so this is all done sight unseen as it were.

So, if you were that free service, what would you do? Well the major cost is the data wiping. We charge £5 per drive because besides the labour involved we pay a license fee per drive. But if we did not use the Infosec 5 software, but downgraded to one of the others on the market, which do not charge a few quid per drive wiped, we could save a fair amount. Sure, the data is technically recoverable but you are now into a situation where your risk revolves around your PC falling into the hands of someone with a fair amount of skill and criminal intent. Genghis would not be best pleased if it happened but as long as you had the paperwork, you might survive the experience.

Another cost is recycling within WEEE regulations. You are not allowed to sell stuff to people who intend to whisk it out of the country. Because it may end up in landfill or be used for nefarious purposes. Which is a shame financially because you can sell these guys anything, working or not, for cash. Annoying this sustainability lark sometimes!

So my message for today is that it isn’t about your valuation of the items worth. It isn’t even about the price I quote you. It is about the value of what we do. If you buy into that...if you believe that sustainability is important and that you would much rather your sensitive data was not shared with all and sundry...then the price will be just right.

Small businesses recycling small amounts will pay more, but isn’t that the same with everything?

African Roulette

I am 53. I am also a cynical old git. I understand Murphy’s law and appreciate irony. Nothing much surprises me anymore and almost everything annoys me. I mean it. Everything. I have even been known to moan about cute kitten pictures on Twitter. But at the end of the extremely long day I do understand business and I realise that you win some and lose some.

Sales are like that. Getting a new customer is that perfect conjunction of proposition, need and timing all coming together at just the right moment, like an orgasm of sorts. Make the first call a day later and you might miss out. Call too soon and the need might not be front of mind and the chance will never come. So there is no point in beating yourself up about a loss. If you did your best, you just dust yourself down and move on, perhaps allowing yourself a rueful grin.

Every business should have values. There should be lines that we will not cross no matter what. Sales people do not like lines, rules or boundaries, but we need them, to keep us honest and to make sure that the bills get paid. Here in eReco land, we have some values. We are passionate about sustainability and very against anything unnecessarily ending up in landfill, for instance. We are uncompromising about data security because the consequences of being slapdash are so appalling. And we firmly subscribe to the theory that there is no such thing as a free lunch.

Take our toner recycling service. We courier out a box that holds about 20 cartridges, bottles or whatever toner comes in these days, and you call us when it is full. Then we come and get it, give you some nice paperwork and charge you £34.50 for the privilege, whilst guaranteeing that nothing will end up in landfill to boot. Simples. And yet some people are horrified that we charge. Honestly. Other people do it for free.

No they don’t. Recycling the toner may come with your printer package, lease or whatever, but it is not free. You are paying for it in the price. Your stationary supplier may take your old stuff too, but only if you buy new ones from them, so again you are paying for it in the price. Don’t be fooled by the word free. It remains relative.

The same is true of the free IT equipment collections. You have to read the small print. You have to find out where they are cutting the corners to pay for their labour. Is it on your data? That data which could cost you a £500k fine if it all goes wrong? Free is turning into a bit of a gamble. But when I pop this little objection onto the table you would think that I had insulted some people’s intelligence. Of course they are removing the data. What with? Fairy liquid?

The next cliché that comes trotting out is the charity one. It’s for charity. We have donated it to children in Africa. Well let me tell you something mate, Africa don’t want it. They have said so. Their governments are starting to ban it. They would quite like some food, maybe some clean water and a few Paracetemol but they are fine for 8 year old desktops thanks very much. The odd Harrier jump jet would be much appreciated, but they are OK for battered LaserJet’s. And the only children who get to see most of this stuff are the ones working the acid baths trying to get the precious metals off the mother boards.

So a free lunch is a bit like playing Russian roulette. There are a lot of possible outcomes here, one of which is that you get exactly what it said on the tin. Don’t get me wrong here. I understand Murphy’s Law and you probably won’t be the one that gets caught out. That is why I always say that this game is about risk management. Using a free service and not really knowing what they are going to do with your stuff is taking an unnecessary risk.

Which you might think is fine. But I don’t like the other outcomes. If the ammunition chambers rolls round to the wrong place, someone gets hurt. Your company, financially. Maybe fatally if you cannot stand a large fine. It will not do the reputation any good either. The environment too. Some kids in Africa. It’s all just a little bit distasteful for the want of paying a few hundred quid.

And yet, I am a cynical old git, of course. So I write another post for this blog and hope that just one person reads it and changes what they do. I don’t expect to make a difference but I know I have to dust myself down, pick myself up and start all over again.

But stop it with the pesky kittens, ok?

Acid Baths Come Free

Here in eReco land we have taken a strong position against the illegal export of WEEE to countries such as Ghana. If you read back through previous blog posts you will see a lot of angst but does it make a difference? Does anyone give a flying fortress?

Then someone followed us on Twitter, @Africaewaste to be precise, and I had a good look at their website here to see what they were all about. I urge you to go and take a look and read their newsletters, especially the one from October 2014.

And this is South Africa. I am not an expert on Africa by any means but as I understand it South Africa is one of the wealthier countries, and one of the more progressive. It makes you wince. I read the story of acid baths being used to separate metal and thought of kids doing the work for pennies and getting sick and wondered how many of those machines had been donated to a ‘charity’ or collected by a free service in the UK?

Because this is the ultimate price we are paying for all those free collections. Ok, let’s be reasonable here, not all of them. Some of them must be making money by other means than dumping on Africa but I have to tell you I struggle to see how, unless they are cutting corners somewhere.

Bob Geldof embarrassed us all with the original Live Aid. His ‘give us your fecking money’ approach to fundraising certainly upset a few applecart’s but as he said, kids were dying. Well kids are still dying and we are all complicit in it.

I talked to a prospect this morning. Nice lady. She explained that her IT equipment all went to a charity. I began to ask some questions, she began to hum and ha. She did not know what they did with the equipment. She was not sure how they removed her data or what paperwork she got, but it was for a charity, so it must be ok?

In short, I was banging my commercial head against a brick wall. Mention the word charity and we all want to jump into a bath of baked beans or run a marathon in a bunny suit. Harry Enfield and Paul Whitehouse used to do sketches about it...everything is fine as long as it is for charity.

Well in this case it isn’t. To paraphrase what Sir Bob might say, it’s a fecking disgrace. Not only are far too many businesses and organisations risking a serious data breach but they are also aiding the exploitation of third world countries. Oxfam are running TV campaigns about children dying in the Sudan at the moment, and yet people are donating their PC’s to Africa? They need food, they need clean water, they need medicine...they do not need a Facebook page.

I do not have all the figures. This is a blog not Panorama. I believe 190k tons of UK WEEE ends up in Ghana every year. Africa is a big place and there must lots of directions things can enter from, so it must be hard to ever get a true picture. But can we not apply a little commonsense here?

Yes, these collections are free. But ask yourself how and why? Even if it is a charity, they have costs to cover before they even make any money for their particular cause. How can they keep you compliant for no charge? What is going to happen to the data? Where is the equipment going to end up?

Maybe you don’t care? Maybe paying £50 to get rid of that rubbish in the store cupboard is too rich for your palate? Free sounds so much better...even if someone else pays a heavy price? Well just think about that acid bath, just think about the people who are forced to scrape a living dealing with your waste. Just think about 190k tons every year in Ghana.

I clearly want you to use us to recycle your WEEE. I admit our commercial interest, but we are not the only ones trying to do things properly. Use someone who is. Please. People are being conned and misled and the planet, and its people, our brothers and sisters, are suffering badly as a result. And it’s such a small insignificant thing.

Please let’s stop being blasé. Let’s start being truly responsible. Let’s forget about what we paid for that shiny new laptop 4 years ago and think about it buried in Africa, or bubbling away in an acid bath. Responsible recycling doesn’t cost a fortune, but only you can make sure that it does not cost the Earth.

Value for Money

This week I have had a concerted go at dubious charity recycling services. You may have noticed and the hits on this blog would suggest that you have. I am glad. It is a disgrace. Business has a responsibility to be responsible. That is why the banking crisis was so unpopular. Responsibility with our money had gone right out of the window.

Deep down everyone knows that businesses have to make profits. That is why the phrase ‘value for money’ is so deep in our consciousness. You get it in the supermarket every week; stuff you buy that makes you go ‘wow that’s expensive’. We will pay a little more for a brand or conspicuous, definable quality, but there is a limit.

SME businesses have the same reactions to services or products they use. Really big businesses tend to have different drivers because their size has overtaken their attitude to price, and their responsibilities are more ‘official’ for wont of a better word. For instance, our toner service costs £34.50 a box and each box holds about 20 used toner cartridges. If you are filling 4 boxes a week as some of our clients do, it is not a ‘cost’, it is a service. The sheer volume of waste needs to be dealt with and we deal with it as regular as clockwork. But to someone who might take two years to fill one box, £34.50 sounds a lot.

This is why it is smaller businesses who are more susceptible to a free recycling service. If you are big you tend to be aware of all the regulations, because you have people whose job it is to comply with those sort of things, but if you are an SME you may not be quite so up to date. And the idea of your 10 old PC’s going to help kids is fundamentally attractive. And that nice man on the phone told you he does everything properly and it is, after all, free.

I just had a great conversation with a new customer. He had been let down by his previous supplier and turned to us because of all the things I bang on about in this blog. He wanted the right credentials, the right paperwork and a demonstrably secure process. His backside was on the line and although he was wary of excessive costs it was the value for money he bought. He would worry about free. He would worry about something going wrong. But that is not to say he is not concerned about the environment too.

We all are. Not in a standing up and shouting about it sense, or a voting Green Party sense, but in a ‘this is just plain commonsense’ sort of way. That is why we expect businesses to be responsible. We expect them to check out this stuff and not get caught out, but we are suckers for a good charity at the end of the day. It’s always for kids too.

The reason I have highlighted this issue so strongly this week is that this is a con trick. It is bad enough putting your data security at risk but these people are also damaging the environment, even if they are exporting used kit legally. That stinks as far as I am concerned.

I do think that profitable businesses should donate to charity. I help them do it sometimes. But there are several fundamentals you really must not forget when disposing of IT assets. First and foremost get the data sorted properly. This really has to cost you money I am afraid, if you want to ensure your data is not recoverable. Roughly £5 per hard drive should cover it, maybe a little less if you have hundreds to do, but it is more or less a fixed cost because of the license fees.

Secondly, make sure that none of your disposal is destined for landfill. And that means do not give it to a charity unless they can prove to you that they do not allow that to happen, and that any exports they are involved with are all legal and above board.

Amazingly these are the two things most SME’s fail to realise. They are apathetic about data security and blasé about the recycling aspect. Far too many just see the cost. But with the risk of fines for data breach and the potential damage to the environment, it is not about cost. It is, like just about anything else in life, including the price of fish, about value for money.