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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
 Posted - 07/17/2007 : 22:55:07
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Current Economics of Sorting and Making Money on Copper Pennies-Large Scale.
After reading Madeuce's posts, I decided to put some numbers to what he was trying to do. I'm sure I forgot some items. The numbers below reflect a partnership with no employee cost.
Contract with armored vehicle service for weekly delivery & pickup for $155/month
Acquire $100,000/ week in US pennies via armored vehicle.
Return $80,000/week to armored vehicle.
Get 20% copper from the pennies - $20,000.
Have a legal source that pays double face value for the coppers. I personally would want to insure that my buying source is not doing anything illegal with my supply, otherwise my buying source could dry up overnight.
Equipment:
Ryedale Sorters – 7 min @ $600 (10,000,000 pennies/18,000 pennies hour per machine, 7days week, 12 hours day)
Commercial Rollers/Baggers – 2 @ $2,000
Roll breaker - 1 $15,000
Moving/loading equipment - $1,000 (carts./dollys)
Supplies:
Wrappers/Bags - $800 (1/2 cent per 50 cent roll returned)
Services:
Electricity - $300/month
Security – I wouldn’t feel safe keeping that kind of cash unsecured. $500/month
Trash Removal - $50/month (old wrappers)
Transportation:
Acquiring 63,755 lb of pennies/week
Returning 51,004 lb of pennies/week
Selling 12,751 lb of pennies/week
Need a heavy duty vehicle to move the sold pennies to the buyer - $1,000/month
Building:
I doubt you could do this at your house… the 63,000 lb would put a significant strain on any normal poured cement for a house.
$1,000/month
Gross Income/month
$80,000 ($20,000 * 4 wks - Copper pennies sold double face value)
Less Expenses:
$ 155 Armored Vehicle
$ 800 Supplies
$ 850 Services
$1,000 Transportation
$1,000 Building
Expense Total:
$3,805
Net Income:
$76,195
Initial Outlay of equipment $24,200
The Net income numbers would be significantly higher with Canadian coinage, due to higher percentages of coppers in circulation.
If you have the supply and demand parts figured out, then it's conceivable that you could net $1 million in a year.
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 07/18/2007 : 00:58:18
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What about labor? You would need somebody to operate all those machines, and do the heavy lifting.
"Preserving coinage.. 2 tons at a time"
HoardCode0.1:M48/14USCA:US1Cu639700:US5Ni2400:CA5Ni46 |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/18/2007 : 06:49:33
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Yes, the labor involved would be significant.
I stated it was a do it yourself operation as a partnership. My guess is it would need at least 3 people. It would not be a real business, with licenses, permits, payroll taxes, and all the other overhead, just a few guys or gals pooling their resources and labor to make it happen.- I stated above - "The numbers below reflect a partnership with no employee cost."
The estimate on the number of Ryedale sorters shows that it was a 12 hours/day operation 7 days a week. If you had 3 people doing it, the cost would be $6,048. (3 people x $6/hr x 12 hours/day x 7 days/week x 4 weeks). 4 people would be $8,064.
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n/a
deleted
78 Posts |
Posted - 07/18/2007 : 12:02:28
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I think the mint regulations about melting pennies are there specifically to prohibit this. It would probably be impossible to find someone to buy these and use them legally, since you're not allowed to melt them.
Even if you could melt them, they're considered a lower grade of copper, so you only get about $2.50 instead of $3.50 per pound for them.
Canadian pennies require several passes through the sorter because there are several different weight copper ones. You might be able to use a much more high-end programmable acceptor in the Ryedale, though. In Canada, you could do it with the nickels, too.
The armored car company would also charge you for the rolled coins, and to take back rolled or non-rolled coins. They don't do it for free or for a small monthly charge. |
Edited by - n/a on 07/18/2007 12:04:56 |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/18/2007 : 12:33:26
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Flying Moose, read MaDeuce's posts regarding this issue.
You must be logged in to see this link.
He says, with regard to what he does with the copper pennies:
"I will remain tight-lipped about what I do with them, but it is entirely legal and done with the relevant parties knowledge/approval."
He also provides what he is paying for armored delivery. |
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Ryedale
Administrator
USA
523 Posts |
Posted - 07/18/2007 : 14:59:14
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quote:
Originally posted by FlyingMoose
I think the mint regulations about melting pennies are there specifically to prohibit this. It would probably be impossible to find someone to buy these and use them legally, since you're not allowed to melt them.
Even if you could melt them, they're considered a lower grade of copper, so you only get about $2.50 instead of $3.50 per pound for them.
Canadian pennies require several passes through the sorter because there are several different weight copper ones. You might be able to use a much more high-end programmable acceptor in the Ryedale, though. In Canada, you could do it with the nickels, too.
The armored car company would also charge you for the rolled coins, and to take back rolled or non-rolled coins. They don't do it for free or for a small monthly charge.
Canadian Copper pennies are sorted out the first time through the Ryedale Sorter, with 98% plus accuracy. I have done it, and so have many others that already own one. No multiple pass needed. Plus with about 50% occourance rate, it is a no brainer for Canadians to be doing this. Pays many times a MCJob too, and the pennies are abundant.
Any questions feel free to contact me direct.
Thanks Andy
Ryedale
Hoard Copper Pennies,
The market will develop |
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c140cessna
Penny Collector Member
USA
419 Posts |
Posted - 07/19/2007 : 07:48:44
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I response to Ryedale and FlyingMoose: Hi guys....I have over 2 Million coins processed by my Ryedale......I'd say the Copper sort accuracy is closer to 99%+. It sorts via metalic composition and has nothing to do with the mass of the coin...my hoard has 1 ton of Canadian pennies that were processed with a single pass sort.
The current problem is finding a buyer for very large levels of copper in light of the melt/export ban.....you can sell a little here and there to those speculating and hoarding.....but no current big scale buyers. I'm just hoarding .....and why not when I can get the metal at less than 40% of spot price. It is a simple fact that the penny will be discontinued in the not too distant future. Anyone not hoarding on a large hobby/investment scale is missing the boat. |
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 07/19/2007 : 10:40:20
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Sounds like a full time job to me. I would rather just go to work for 8 hours a day and not worry about all the stuff like machinery, buildings, laws, hired help, security, etc. And what is not covered here is the coffee. Where I work it is free. 
Carl |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 07/19/2007 : 10:47:38
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quote:
Originally posted by Tourney64
Current Economics of Sorting and Making Money on Copper Pennies-Large Scale.
After reading Madeuce's posts, I decided to put some numbers to what he was trying to do. I'm sure I forgot some items. The numbers below reflect a partnership with no employee cost.
Contract with armored vehicle service for weekly delivery & pickup for $155/month
Acquire $100,000/ week in US pennies via armored vehicle.
Return $80,000/week to armored vehicle.
Get 20% copper from the pennies - $20,000.
Have a legal source that pays double face value for the coppers. I personally would want to insure that my buying source is not doing anything illegal with my supply, otherwise my buying source could dry up overnight.
Equipment:
Ryedale Sorters – 7 min @ $600 (10,000,000 pennies/18,000 pennies hour per machine, 7days week, 12 hours day)
Commercial Rollers/Baggers – 2 @ $2,000
Roll breaker - 1 $15,000
Moving/loading equipment - $1,000 (carts./dollys)
Supplies:
Wrappers/Bags - $800 (1/2 cent per 50 cent roll returned)
Services:
Electricity - $300/month
Security – I wouldn’t feel safe keeping that kind of cash unsecured. $500/month
Trash Removal - $50/month (old wrappers)
Transportation:
Acquiring 63,755 lb of pennies/week
Returning 51,004 lb of pennies/week
Selling 12,751 lb of pennies/week
Need a heavy duty vehicle to move the sold pennies to the buyer - $1,000/month
Building:
I doubt you could do this at your house… the 63,000 lb would put a significant strain on any normal poured cement for a house.
$1,000/month
Gross Income/month
$80,000 ($20,000 * 4 wks - Copper pennies sold double face value)
Less Expenses:
$ 155 Armored Vehicle
$ 800 Supplies
$ 850 Services
$1,000 Transportation
$1,000 Building
Expense Total:
$3,805
Net Income:
$76,195
Initial Outlay of equipment $24,200
The Net income numbers would be significantly higher with Canadian coinage, due to higher percentages of coppers in circulation.
If you have the supply and demand parts figured out, then it's conceivable that you could net $1 million in a year.
If one were to get into this on such a large scale then what type of a contract would one require with the buyer? Markets can change quickly. If you invested in even half of what is listed here you could take a beating if your one and only buyer backs out on you for what ever reason.
On the other hand, if you have a long term contract and you can't fill the order then you could be the one holding the bag.
****************
Fanaticism is doubling one's efforts, yet forgetting one's purpose.
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Ryedale
Administrator
USA
523 Posts |
Posted - 07/19/2007 : 10:49:40
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quote:
Originally posted by just carl
Sounds like a full time job to me. I would rather just go to work for 8 hours a day and not worry about all the stuff like machinery, buildings, laws, hired help, security, etc. And what is not covered here is the coffee. Where I work it is free.
Carl
So how much have you squirreled away Carl? Why do you hang out at a penny hoarding forum, only to Poo-Poo the activity? Sounds like doubletalk to me.
Ryedale
Hoard Copper Pennies,
The market will develop |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/19/2007 : 11:25:15
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| If the buyer backed out after 1 month, you would still be ahead. You would stop any additional spending that you could and still have the equipment paid for. You could sell some of that equipment to people like HoardCopperByTheTon who continues to buy equipemnt he doesn't need. |
Edited by - Tourney64 on 07/19/2007 11:43:27 |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 07/19/2007 : 11:43:00
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Hey, I need all the equipment I buy! I wouldn't mind having a few more Ryedales.. those are fantastic machines. I would love to have one of those RollCracker 1000's too, but shipping would sure be a bitch on that.
"Preserving coinage.. 2 tons at a time"
HoardCode0.1:M48/14USCA:US1Cu639700:US5Ni2400:CA5Ni46 |
Edited by - HoardCopperByTheTon on 07/19/2007 11:45:54 |
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MaDeuce
Penny Pincher Member
USA
124 Posts |
Posted - 07/20/2007 : 00:12:50
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Guys, this is the type of discussion that I like to see! I only have a couple of minutes, I haven't read everything carefully, but I'd like to chime in with a couple of comments...
1) Rydale's equipment rocks. I use alternate methods now, which are faster, but MUCH more expensive. However, I'd be remiss if I didn't point out that I still use Rydale's equipment for quality control. His stuff never lies and it always works. Wish I could say the same thing about the expensive stuff.
2) You won't get $100K of pennies in even the largest armored car. The very big armored car that makes our pickups/deliveries can probably hold about 8 skids of coins. Next time they come by, which should be tomorrow, I'll try to remember to ask them. One skid (for us anyway), weighs about 1,000-1,500 pounds. You'll have to convert that into a face value for your purposes. If you are really serious, you want to get the coins delivered in FIBC (flexible intermediate bulk container) bags.
3) I would argue that you don't want armored cars at all. If you are really serious about pennies, you should have them delivered by semi. There are no security concerns in my opinion.
4) Rollers for your rejects are mandatory. You can roll your own for $0.03/roll, probably less. A good used, reconditioned roller (Glory WR-100) will set you back about $5-7K. If you pay a third party to roll your coins, you'll pay between $0.08 and $0.18 per roll. Needless to say, this eats into your margin.
5) As Ardent says, whatever your do, be sure you stay legal!
6) Think material handling. Think very hard. Think forklift. Think conveyor. If you can, go visit a coin processing facility.
7) Related to the above, what types of containers are you shipping in? Are they disposable or returnable? What types of containers are you using internally for processing? Containers are more expensive than you might imagine.
8) Most importantly, be sure you have a market if you intend to sell your harvest!
It's a lot of very hard, very un-glamorous work, but you can make a buck at it. Expect problems. Expect lots of problems. Every single person you come in contact with will think you are insane. Think about it; they might be right! ;-)
MaDeuce |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 07/20/2007 : 01:00:59
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"A good used, reconditioned roller (Glory WR-100) will set you back about $5-7K" Heh. I got a WR-200 for $1500. Thank you bankrupt Reno casino being converted into condos.
My worry about going as large-sacel as suggested in this thread is that a) if I'm buying fresh coin from the same place I'm sending sorted coin, I'll quickly start "sh!tting in my own pool" and b) that the point when all good coins are gone from circulation is comeing faster than we think, and all this cap. ex. could go to waste if the yeilds don't stay high enough longe enough to pay off the cost of getting up to capacity. I'm still at least a couple months worth of hard sorting away from covering the cost of my wrapper (the ryedale paid for itself almost overnight) so I'm pretty sure I can offset that cost before all the good coins are gone, but if yr going to sink $50K or so into it, you've gotta be pretty sure that there are going to be atleast enough coins left out there for you to finbd that you will make back yr costs & hopefully make a profit.
________________________
"A nickel's nothing to scoff at."
C. Montgomery Burns
HoardCode0.1: M28/5CAON:CA5Ni35000:CA1Cu1200:CA100Ag345:
CA10Ag250:CA50Ag100:CA25Ag30:CA500Ag48:US100Ag20:CA1000Ag16
How to read a HoardCode:
You must be logged in to see this link. |
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c140cessna
Penny Collector Member
USA
419 Posts |
Posted - 07/20/2007 : 01:52:35
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| I have a lot of concerns with trying to go large scale, esp. with the current ban. With a wrapper and a Ryedale and a town of about 100,000 population, this is a perfect hobby/investment game. My goal is $9000FV per year in copper hoard.....that is a lot of hoard to finance. ....about 100% of our household savings and we live like mizers. At that level, it takes about 10 to 15 hours per week of time to get/sort/wrap/box/return/trade. I'm processing about 20 boxes ($500FV) per week. I've sold some hoarded copper and nickel to fund future hoarding. I think the scale I'm at is probably way beyond "crazy" for even 95% of the nuts on this forum....but I'm just that bullish on the decline of our dollar, the demand and inflation price increase in base metals, and the fact that I'm buying/prospecting copper at 40% of spot price. I'm hoping that 5 years out I'll have 15 tons when copper spot is in the $7 to $10/lb range......I'm looking for a 5X payoff. |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 07/20/2007 : 03:35:49
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Damn, I'd like to get a skid or 2 delivered. At 1,000 to 1500 pounds per skid that is $1500 to $2250 in pennies. So the total for that big truck with 8 skids on it would only be $12,000 to $18,000 in face value.
I work in materials processing. Some of that equipment is very expensive. Conveyer belts aren't cheap, and a good forklift will run you about $55k new.
I ship in those Priority Flat rate boxes provided for Free by the post office. Can't beat the price.. and they are recyclable. The 3 yard bin hoppers we use at work would be perfect for this penny operation.
I think I could scare up a good used Glory WR400 for that $5-7K. I have of the smaller size Glory WS-10 machines right now, which work fine for small little farm. I don't even have to roll my rejects anymore. I just hook up a bag to one of my Glory counters and fill it up.. even faster than rolling.
"Preserving coinage.. 2 tons at a time"
HoardCode0.1:M48/14USCA:US1Cu639700:US5Ni2400:CA5Ni46 |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/20/2007 : 15:02:51
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| Based on the amount of pennies that comes in from each delivery, it changes the numbers significantly. I'll put some updated numbers out later tonight based on this new info. |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/20/2007 : 18:36:33
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Revised for latest info:
Contract with armored vehicle service for weekly delivery & pickup for $155/month
Acquire $15,000/ week in US pennies via company like Brinks or CoinStar
Return $12,000/week to company like Brinks
Get 20% copper from the pennies - $3,000.
Have a legal source that pays double face value for the coppers. This may be a little high based on what I've seen on Ebay and other sites.
Equipment:
High Volume Sorter – $8,000
Ryedale Sorters - $1,200 (2 @@$600 for quality control)
Commercial Rollers/Bagger – $5,000
Roll breaker - 1 $15,000
Moving/loading equipment - $6,800 (conveyors, carts./dollys)
Total Initial Outlay of equipment $36,000
Supplies:
Wrappers/Bags - $720 (.03 cent per 50 cent roll returned)
Services:
Electricity - $300/month
Security – 0, but I wouldn’t feel safe keeping that kind of cash unsecured $500/month
Trash Removal - $50/month (old wrappers)
Forklift Rental - $2,500/month
Transportation:
Acquiring 22,500 lb of pennies/week ($12,000 - $18,000)
Returning 18,000 lb of pennies/week
Selling 4,500 lb of pennies/week
Need a heavy duty vehicle to move the sold pennies to the buyer - $1,000/month
Building:
I doubt you could do this at your house… the 22,500 lb would put a significant strain on any normal poured cement for a house.
$1,000/month
Gross Income/month
$24,000 ($6,000 * 4 wks - Copper pennies sold double face value)
Less Expenses:
$ 155 Armored Vehicle
$ 720 Supplies
$2,850 Services
$1,000 Transportation
$1,000 Building
$1,000 Equipment Depreciation (36 months)
Expense Total:
$6,725
Monthly Net Income:
$17,275
Annual Net Income:
$207,300
The Net income numbers would be significantly higher with Canadian coinage, due to higher percentages of coppers in circulation.
This proves if you have the supply and demand parts figured out, you can make some nice coin. Get the process working smoothly, increase the supply & demand, and the sky is the limit, until the % copper gets uneconomical. Of course as the % copper decrease, the price may increase.
MaDeuce are you willing to share your supply & demand chain for a percentage if we want to participate? |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 07/20/2007 : 19:45:49
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Man, glory wrappers are the bomb. Last night I learned that the extended hopper on my WR200 can hold 11 boxes of nickels (22000 cons) and wrap the entire hopper's worth in less than 15 minutes. Damn fast.
________________________
"A nickel's nothing to scoff at."
C. Montgomery Burns
HoardCode0.1: M28/5CAON:CA5Ni35000:CA1Cu1200:CA100Ag345:
CA10Ag250:CA50Ag100:CA25Ag30:CA500Ag48:US100Ag20:CA1000Ag16
How to read a HoardCode:
You must be logged in to see this link. |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 07/20/2007 : 22:09:54
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quote:
Originally posted by Tourney64
Gross Income/month
$24,000 ($6,000 * 4 wks - Copper pennies sold double face value)
I think you might want to revise your Gross income. You are only netting $3k profit per week on the copper. You need to deduct $3k per week from your gross revenue for COGS (Cost of Goods Sold).
You should be able to pick up a good used forklift somewhere like an auction for a few thousand dollars. It is only the brand new ones that are really expensive. This would cut down on your monthly service costs.
"Preserving coinage.. 2 tons at a time"
HoardCode0.1:M48/14USCA:US1Cu639700:US5Ni2400:CA5Ni46 |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/21/2007 : 07:56:30
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You are correct HoardCopperByTheTon...How could I have forgotten COGS.
Revised:
Monthly Gross Income - $12,000 ($3,000 profit from copper coins * 4 weeks)
Monthly Net Income - $5,275
Annual Net Income - $63,300
The Forklift rental may be high but I based it on searches for rental forklifts on the internet. If you find a used one for $18,000 and avoid rental then the numbers would be:
Monthly Net Income - $7,775 ($5,275 - $3,000 forklift rental + 500/month depreciation on used forklift)
Annual Net Income - $93,300
Still not bad at all. |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 07/22/2007 : 12:44:09
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Still not bad. And with that low volume you could probably get away with buying a pallet jack rather than a forklift. Volume is definately the key to making real money though.
"Preserving coinage.. 2 tons at a time"
HoardCode0.1:M48/14USCA:US1Cu639700:US5Ni2400:CA5Ni46 |
Edited by - HoardCopperByTheTon on 07/22/2007 16:05:35 |
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 07/28/2007 : 17:28:25
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So how much have you squirreled away Carl? Why do you hang out at a penny hoarding forum, only to Poo-Poo the activity? Sounds like doubletalk to me.
Ryedale
Hoard Copper Pennies,
The market will develop
Actually I too USED to hoard massive amounts of coins. I naturally looked through every coin with a magnifying glass for error, valuable types, etc. Kind of still wish I had all the Copper ones though. Being diagnosed with stage 4 CANCER and no one to leave it to, I just sent all my Copper coins to a YN in another state. Not exactly all, but the largest amount. I did the same with Nickels, Dimes, etc. Erraticated about 70% of the coins so far and still slowly doing that. I had virtually many humndreds of dollars worth of those Bicentennial Quarters that all went to the bank.
You ask why do I hang out here? NO, not to POO-POO as you say, but with little time left it is interesting to see and hear what others may be doing, possibly just hoarding as I did with no possible idea of the future. Hope yours is a lot, lot more medically better than mine.
Carl |
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Ryedale
Administrator
USA
523 Posts |
Posted - 07/28/2007 : 19:31:19
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Just Carl,
I'm genuinely sorry to hear about your health issue.
I think many of us here are much like yourself when you were younger. I like the numismatic play in the pennies, as well as simply the speculative play in the metals.
I think the penny will be eliminated within years, perhaps after the 100th anniversary of the Lincoln Cent, and then the congress/treasury/mint will come up with some new scheme for small coins. It's pretty pathetic that the smallest denomination of coin, has the most tangible value.
Thanks for your input at the forum, and I hope you continue to visit, My comments were not intended to hurt, just to understand more. If you ever need anything that a fellow hoarder/coin enthusiast can offer, please let me know.
Take care Andy
Ryedale
Hoard Copper Pennies,
The market will develop |
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 07/29/2007 : 09:15:03
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Thanks for your input at the forum, and I hope you continue to visit, My comments were not intended to hurt, just to understand more. If you ever need anything that a fellow hoarder/coin enthusiast can offer, please let me know.
Take care Andy
Ryedale
Thanks for the thought. Sure wish a Bladder, Prostate, Lymph Nodes and many nerve endings were in your offer. Naturally just kidding. Way to late. Just keep on collecting.
Carl |
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Large Scale Economics-Copper Pennies
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