Build your scrap plastic business by broadening your client base
One of the first lessons of investing or saving for retirement is to “diversify, diversify, diversify.” If you have a well-balanced blend of stocks, bonds and other investments, you’ll be better positioned to see your investment portfolio grow over the long-term. Another concept of diversification is “biodiversity,” where gardens and natural ecosystems tend to do better and stay healthier when they have a good mix of lots of different plants and animals and insects – greater diversity tends to make systems stronger because there are more types of living things contributing to the strength of the whole.
In the same way, every scrap plastic trading firm needs to strengthen the life of its business for the long-term by diversifying your client base and product offerings. Just like you don’t want to put all your eggs in one basket when saving for retirement (by only investing in the stocks of one company or industry), you also want to make sure that your scrap plastic trading firm has a broad, diversified base of clients and an active array of plastic scrap trading options.
Here are a few ideas for how scrap plastic trading firms can diversify and build a stronger client base:
- Expand geographically: Diversify your client base so you have customers in multiple geographic regions of the country and around the world – wherever you want to do business and wherever you can confidently build strong trading relationships. As we’ve seen with the recent fallout from the China “Green Fence” issues, there are still big opportunities in various markets around the world, even if doing business in China or other big markets gets more complex or time-consuming.
- Expand your customer profile: Who is your “ideal” customer? Some scrap plastic trading firms don’t know the answer to this question – and so they waste time by trying to be “all things to all people” or doing business with absolutely anyone who comes along. Not every prospective trading partner is going to be the right fit for your business, so smart traders are constantly doing due diligence and being cautious before doing deals with new trading partners – but at the same time, you don’t want to fall into a rut by being overly cautious or only doing business with one type of scrap plastic buyer. The way to find middle ground on this question is to smartly, strategically expand your definition of your ideal customer profile. Do you sell a lot of scrap plastic to buyers in one particular industry? Look for ways to expand to serve other buyers who have similar needs, but perhaps in different industries. Look for commonalities among your best buyers, and seek ways to serve other companies that have those same types of needs and characteristics.
- Diversify by plastic grades: There are different types of plastics and grades (post industrial / post consumer) and we’ve written before about why it’s important for plastic scrap trading firms to diversify their mix of plastic materials for sale. If you have 2-3 end users for each of the major grades in all of the geographic regions you will generally be in a good position to move all types of plastic.
Building a broad base of clients for your scrap plastic trading firm takes time, effort and energy – and there might be some obstacles and mistakes that happen along the way. But in the long run, your business will be better off if you are serving a broad mix of end users across many geographic regions, many different types of scrap plastic material, and many different business scenarios.
What’s your definition of an “ideal” scrap plastic buyer (other than, “They pay their bills?”)? How can scrap plastic trading firms better analyze their opportunities and find new geographic regions, new markets, and new ways to add value? Let us know what you think by leaving a Comment.