LESSON #56: Why Waste Waste?

A lesson on turning waste into profit from Harvey Mackay, author of the best sellers Swim With The Sharks Without Being Eaten Alive and Beware The Naked Man Who Offers You His Shirt.

When I first started out in the envelope business, I couldn't figure out how to make a profit in it. There was too much competition, the margins were paper-thin (an old and treasured pun), and it seemed as though I was constantly under pressure to go into debt to buy newer, faster, equipment. I went to my first trade show, hoping to get a clue and wound up at the bar of the Fairmont Hotel in San Francisco at two in the morning with a man whose last name is lost forever to me but whose first name I'll never forget. His first name was actually Goldberg, a good old boy from the small town Deep South Somewhere, whose Daddy had given him his "Christian" name in honor of a rabbi he admired.  

"How the heck do you make a buck in this business?" I asked him.  

"'Pends on how much you all get fo' the scrap, " he said.  

"The what?"  

" The scrap! The scrap! The wastage! Your leftover paper. How much a ton you getting up there where you live, boy? You got a good contract, you make out good. Bad contract, you make out good, too, just not quite as good."  

I, of course, had been paying some guys to haul it away. Didn't everyone? Apparently not. My competitors were getting $250.00 a ton from the same guys.

Scrap is now a major profit center at Mackay Envelope. Which is why I can practically give those envelopes away.  

For years, the Weyerhaeuser Company, the world's largest forest-products company, didn't know what to do with the tremendous volume of sawdust it generated. It was waste.  

The Weyerhaeuser people knew there had to be a better use for it, but they didn't know what it was until finally they developed the technology to compress that waste into solid board. They created a new company, Wood Conversion, now Conwed, and a whole new technology and industry, all based on that determination to be frugal.

There are entire industries - waste, rendering, and recycling - built on what Americans throw away.