junk vehicles

Auto Scrap News 1.4

Auto Scrap News 1.4

Cash 4 Cars Cleveland, a buyer of junk vehicles within the auto recycling industry in Northeast Ohio is back with our 4th installment of our Auto Scrap News interview series. Today we discuss trends in the business with Keith Olson, whose company is U Pull R.  They have locations in East Bethel and Rosemount, MN, which are in the greater Minneapolis region. U Pull R maintains a massive inventory of junk vehicles and components. They are a self-service auto scrap yard, which is open 7 days a week. There is a $2.00 admission charge per person entering the yard.

Q:  What are some of the primary functions you handle in managing U Pull R?

A: I assist with purchasing inventory, advertising, marking scrap and hiring of employees.

Q: What are some of the changes in the auto recycling industry recently that you have noticed?

A: The costs associated with employees, such as hour wages, benefits and retention.

Q: Is there any marketing initiative(s) that you have used lately that was very successful?

A: The internet is it primarily.

Q: The trend of the “U-Pull-It” and “self-service” business model has become popular in the industry and obvious you use this model. What are some positives and negatives that you see with it?

A:  The increase in competition for cars go up, so profit can go down. This works best when there is a lot of cheap inventory .

Q:  The scrap prices have continued to fall in the US. What do you typically pay for junk vehicles these days in your area of MN?

A: On average we pay approximately $150.00 per vehicle, which is actually too high–but we need the cars.

Q: What do you anticipate happening with the steep drop in per ton steel scrap pricing?

A: It will certainly drive out some business from the industry.

Q:  Your website indicated that you are open 7 days a week. Do you get significant business on Sunday? Does being open 7 days pose any employee staffing/scheduling challenges?

A: Sometimes I question if being open on Sunday is worth it, but it is definitely worth it on Saturdays.

Q: Your website indicates you offer a vehicle donation program through Charity Car. Do you receive many of these? Are there any challenges associated with the donation process?

A:  We don’t do much with vehicles donation any more. At one time, roughly 30% of our cars came through donations. When iron (steel) price was high, the demands for inventory got to be too much and I stopped catering to it. We now obtain less than 1% of our inventory through donated cars.

We would like to thank Mr. Olson for his time and insight into the auto recycling industry. There were (3) aspects of his input that I found particularly interesting:

  1. He mentioned that the costs associated with employee (staff) have risen, yet retaining employees is increasing difficult.
  2. They pay approximately $150 per vehicle right now, which is higher than usual. I am wondering if this average applies to later-model vehicles (2007-2010) because that would seem a bit too low for those.
  3. U Pull operates 7 days a week. I have rarely come across yards in this business with Sunday hours.

We encourage you to visit their website at http://www.upullrparts.com/home