CASE STUDY
Smarter Pricing, Stronger Growth
A recycling company operating multiple commercial and residential facilities was struggling with contract pricing practices. The company collected, processed, and sold commodities such as paper, plastics, and cardboard, but inconsistent pricing models were eroding profitability.
The Challenge
- Outdated pricing models were not keeping pace with commodity market fluctuations.
- Margin losses occurred due to inefficient contract pricing that didn’t account for packaging type, hauling, or mileage costs.
- Limited visibility into actual tonnage received made it difficult to assess profitability per contract.
- Training gaps among sales reps and client-side staff led to misaligned expectations and underperformance.
The Solution
To address these challenges, a comprehensive pricing calculator was developed. Key elements included:
- Integration of historical index prices across commodities like paper, plastic, and cardboard.
- Consideration of packaging type, transportation, and driver mileage costs to refine contract terms.
- Sales team training to ensure adoption of the calculator, allowing reps to quickly and accurately build client proposals.
- Ongoing maintenance and documentation of index prices so accounting staff could update the tool without dependency on a single individual.
Additionally, the company leveraged the calculator to conduct profitability reassessments three months into contracts. These evaluations identified underperforming agreements, flagged training issues in client operations, and supported corrective actions such as waste audits or additional client training programs.
The Results
The pricing calculator delivered measurable and strategic benefits:
Improved Contract Profitability.
Contracts were priced with accurate margins per ton, stabilizing financial performance.
Operational Visibility.
The company could monitor and adjust for discrepancies in expected versus actual tonnage delivered.
Expanded Market Reach.
Reliable data empowered the company to confidently pursue municipal contracts, opening a new line of business.
Accelerated Growth.
With improved financial insights, the company scaled from $20 million to $70 million in revenue over ten years.
The project also gained industry recognition, with the pricing calculator featured in Recycling Markets Magazine as an innovative solution in contract pricing.
The Business Impact
Sustainable profitability across contracts.
The ability to expand from commercial into municipal recycling services.
A scalable framework that supported long-term revenue growth and positioned the company as a leader in recycling operations.