Dump the Bins and Add Ready-mixed Concrete

Should You Replace Existing Bins for Cart-Away?

Many potential customers often wonder whether they have enough space to incorporate a Cart-Away concrete system into their operations. While this concern is understandable, we believe there’s likely ample room for this lucrative addition if you reassess the allocation of your current storage space. Often, replacing underperforming bins can free up the necessary area without significantly disrupting your existing operations. The decision ultimately hinges on profitability per square foot of your yard space. Your product mix should aim for maximum profitability. To evaluate your product mix effectively, you’ll need to perform a few key calculations. Note: There is another crucial consideration, which we'll address later in this discussion.

• • • • How much gross profit do I generate from each bulk product I offer? At our material yard, we calculate the cost of the material plus any shipping fees to determine the Cost of Goods Sold (COGS) for each bulk item we stock.

    In Oregon, we must order materials by the ton, yet we sell by the cubic yard. This means we need to convert tons to cubic yards by consulting our suppliers about their specific conversion factors. Once converted, we can determine our COGS per cubic yard, excluding delivery charges. Adding delivery costs gives us a more accurate COGS estimate. Doubling this COGS figure yields our retail price. Example: 1” to 2” river cobbles cost $20.65 per cubic yard when we order a 16-yard truckload. Delivery adds $55.00, making our COGS $3.44 plus $20.65, or $24.09. We sell this product at $48.20 per cubic yard. We then calculate the gross profit for each truckload ordered. Example: ($48.20 retail minus $24.09 COGS = $24.11 gross profit)

  • How many times did I sell this product during the last 12 months? In retail, this is referred to as the "turn rate." By reviewing our invoices from the past 12 months, we discovered that we placed six orders for these river cobbles. Our turn rate is therefore six. For each of these six truckloads, we generated a gross profit of $385.76 (6 × $24.11 = $385.76). Multiplying the number of turns by the gross profit per turn gives us an annualized gross profit for this space. In this case, our river cobbles turned six times last year, resulting in an annual gross profit of $2,314.56.
  • How much space do I need to stock and sell this material? Each river cobble bin measures 12 feet wide and 15 feet deep, providing 180 square feet of sales space. Dividing our annual gross profit by this space gives us the profit per square foot for river cobbles. $2,314.56 ÷ 180 sq. ft. = $12.86 per square foot of profit from river cobbles. You should gather similar sales data for each square foot of bin space in your yard.
  • Which products can I replace low-performing bins with to maximize profit per square foot? After analyzing each bin, you should identify which products contribute the most to your bottom line. Experience shows that many operators who undertake this analysis and compare the profits per square foot of adding a Cart-Away system decide to remove some low-performing bins and transition to concrete. This process takes about two days, but the insights gained are invaluable for boosting profitability. We’ve found that fewer than five low-performing bins typically free up enough space for a Cart-Away loading system and four trailers.
    

    Replace 5 low performing bins

  What Is the Profit Potential of Cart-Away?

  Over 400 Cart-Away systems operate similarly to the one shown in the image above. A Cart-Away system like this occupies less than 900 square feet. Since 1993, we've been collecting data on sites like this and can accurately predict annual sales and gross profits. Producing 1,500 cubic yards of concrete annually isn't challenging in smaller to medium-sized markets. For this comparison, we'll use 1,500 cubic yards. Many Cart-Away operators achieve sales of 4,000 to 6,000 cubic yards per year by expanding their fleets with additional trailers. Ready-mixed concrete is the most consumed product in the built environment, making these sales figures attainable.

  Most Cart-Away operators sell a cubic yard of ready-mix at between $180 and $220 retail. For our calculations, we'll use $190 per cubic yard. The Cost of Goods to produce a cubic yard of concrete ranges between $78 and $91, depending on regional aggregate and cement costs. For this calculation, we'll use $83 as the COGS. The math is straightforward: $190 retail minus $83 COGS equals $107 gross profit per cubic yard sold. Multiplying $107 by 1,500 cubic yards gives an annual gross profit of $160,500 with Cart-Away in just 900 square feet of space.

  To determine our profit per square foot, we divide $160,500 gross profit per year by 900 square feet, yielding $178.33 gross profit per square foot. With this data on your bulk materials and projected profits from Cart-Away, it's time to reconsider your product mix.

  Are There 4 or 5 Underperforming Bins in Your Yard?

  If your yard includes bins that generate low profits, you should seriously consider replacing them with a higher-profit alternative. If you have five bins operating like the river cobble example, that space is only generating $64.30 per square foot (5 × $12.86 = $64.30). You could triple that profit per square foot by replacing those bins with ready-mixed concrete. Cart-Away concrete profits are among the highest in the $50 billion ready-mixed concrete industry. High profits mean most new Cart-Away start-ups recoup their equipment investment within 18 to 24 months. We’ve helped hundreds of material yards replace underperforming bins with a Cart-Away profit center. Reach out to one of our material supply experts to help you run the numbers for your available space.

  The Extra Benefit of Selling Ready-Mixed Concrete

  The financial benefits are compelling, but the real advantage of adding Cart-Away lies in exposure. When you brand your trailers and trucks with your logo, you gain access to one of the most effective marketing tools imaginable. Whether you opt for a branded dump truck or a rotating mixer drum powered by a compact engine, these trailers attract attention wherever they go. Your phone will ring as soon as your trailers hit the streets. The bigger reward? Hundreds of new customers will visit your yard who may have never considered you before. Wise operators convert these visitors into customers for other products. Satisfied Cart-Away users nationwide report increased customer counts each year because they’re the go-to source for concrete and other materials. It’s time to grow your business and optimize your yard space. Replace some bins and add Cart-Away.

Carburant

Dingyang Metallurgical Refractory Co., Ltd , https://www.dyrefractorymatter.com