I wholeheartedly agree with your points in many of your emails that businesses must adapt to changes in business climate, customer demands, competition and of course technology. Seems like you and I are on the same team; we both have “new” technologies that may fundamentally change the way pawn shops do their business. Hearing that one shop in this group actually still uses an old DOS-based system for their business is shocking to me. As margins get squeezed tighter and tighter for the reasons stated above, you must continually seek new ways to maintain or grow profitability or you will eventually go the way of those old businesses mentioned such as Woolworth. They lost to competition who embraced new ways of doing business that led to greater profitability. You are 100% correct; they didn’t go out of business because they were good to their customers and put customer service as a priority, they’re gone simply because they couldn’t adapt their business model to new approaches in their industry. I can say that being part of an $11 billion organization, customer allegiance is a top priority for Thermo Fisher Scientific. We know that if we are not seen as customer-orientated, we will lose market share to our competition and cease to grow organically. We measure this customer focus and have a DAILY review of our CAS (Customer Allegiance Score) to determine how well we are serving our customers and find areas where we can improve. This is a continual process; we spend a lot of money and have teams of people whose primary function is finding ways to improve our CAS.
On to your email below. I travel the world seeing how businesses are using our analyzers, including the UK (it could be that I have met the customer you spoke to). Precious metals analysis is a relatively small part of our business, but I see it as a high growth area. The Niton analyzer was originally used in lead paint analysis in homes in the early 90s. Sales really took off when steel recyclers found that they could use it to separate different types of stainless steel based on nickel content and make much more money. Many found that they could pay for the analyzer in weeks based only on a 2% difference in nickel content. There was a lot of resistance at the beginning where many operations believed their old way was better and cheaper. They had seasoned employees that could sort steel by looking, touching, bending and watching at the color of the sparks it makes when a grinder is put on the surface. Sound similar to the acid test for gold? The reality is that these seasoned veterans, while “cheap,” couldn’t keep up with the speed, simplicity and accuracy that the Niton analyzers provided. Their competitors who embraced the analyzers enjoyed much greater control of their operations and as a result experienced much higher profitability. Now almost every scrapyard sorting high-value stainless steel (and other alloys) must have an XRF analyzer or they would go out of business.
I see the precious metal recycling business getting to the same tipping point that the steel recycling industry experienced 10 years ago. Whether they define themselves as recyclers or not, pawnshops, jewelry stores and any other cash-for-gold operation are in the precious metals recycling business. While the volume is much lower, the cash value of precious metals recycled far exceeds that of stainless steel, which is a huge global market where we sell over a thousand analyzers per year. I estimate that the total global value of recycled steel is about $36 billion annually at current scrap prices. Recycled gold is estimated at almost $72 billion annually (at a price of $1,350/oz when I did the analysis). Almost 40% of all gold consumed today is from recycled sources (mostly scrap jewelry).
Jeffrey Walker
Business Development ManagerThermo Scientific Portable XRF Analyzers
Thermo Fisher Scientific
900 Middlesex Turnpike, Bldg 8Billerica, MA 01821 USA
Phone: +1 978-215-1381 (direct)
Mobile: +1 978-595-7421
www.thermoscientific.com/niton
