revving up reuse
THE NEW BUSINESS LOOK IN SECONDHAND STUFF
As a commercial sector, reuse is taking on a life of its own — showing up as retail centers, rental and remanufacturing companies.

David Biddle

Recycling programs have proliferated throughout the country over the last few decades. But a parallel “sister” phenomenon has also grown in scope and magnitude — materials reuse. Recycling typically addresses disposable, nondurable products. Materials reuse takes on the more difficult job of finding new uses for durable goods — everything from obsolete computers and old clothes to secondhand sporting goods and warehouses full of carpet in last year’s colors. Although recycling has garnered much of the press (and had its share of political turmoil and debate), reuse has quietly expanded in most urban centers throughout the country from the thrift shop and local junk yard to full-scale regional secondhand and surplus material centers.

Indeed, organizations like the Loading Dock in Baltimore, Urban Ore in the Bay Area, Reuse Center in Minneapolis and New York City’s Materials for the Arts have not only proven that reuse is an effective way to creatively capture somewhat specialized components of the waste stream, they have also proven that the business of secondhand materials is a viable form of economic development that has the potential to play a vital role in community revitalization.

In their 1997 study called Creating Wealth from Everyday Items, researchers for the Washington D.C. Institute for Local Self-Reliance (ILSR) estimated that only about 15 percent of the 30 million tons of durable goods discarded every year are recovered for reuse. They calculated that, were the other 85 percent to find its way back into the economy, more than 220,000 new jobs could be created.

Like recycling, reuse is by no means new. Organizations like Goodwill and The Salvation Army have been vital parts of the national culture for decades. Though often overlooked, flea markets, yard sales, church and school donation drives, auctions, thrift stores, and repair shops are all fundamental aspects of our economy. The environmental and community development movements of the last several decades have simply identified these aspects of American life as having the unified purpose of being part of the country’s war on waste. Reuse is the second “R” in the trilogy Reduce, Reuse, Recycle.

In fact, reuse as a concept is beginning to take on a life of its own. Beyond the notions of yard sales, repair shops, flea markets, and donation drives are everything from surplus materials exchanges and reuse centers to rental companies and remanufacturing, which includes everything from electronics refurbishment to the reconditioning of machinery or medical equipment. According to the Remanufacturing Industries Council International (RICI), the U.S. remanufacturing industry contains 73,000 firms with total annual sales of $53 billion, employing 480,000 people.

REUSE DEVELOPMENT ORGANIZATION

The successes of this somewhat ignored portion of the waste management hierarchy are what led to the formation of the Reuse Development Organization (ReDO) over the last several years. With a membership list that includes thrift shops, art materials exchanges, community development agencies, environmental groups, municipal recycling programs, food banks, and regional solid waste authorities, ReDO serves an extremely broad and multifaceted constituency. The board of directors includes some of the most influential reuse center managers in the country — people who have more than likely reinvented several wheels themselves over their careers.

Using a grant from United States Environmental Protection Agency (EPA), the board of directors hired Julie Rhodes in the summer of 1998 as their first executive director. ReDO is also supported by The Home Depot, Rouse Foundation and Urban Ore. The organization’s mission is “to promote reuse as an environmentally sound, socially beneficial and economical means for managing surplus and discarded materials.”

PRACTICAL ECONOMICS

Whereas recycling programs have typically been predicated first and foremost on the notion of reducing society’s dependence on limited landfill space and costly incinerators, reuse is fundamentally about practical economics. Reuse groups may also be involved in community-based projects like job training, affordable housing or educational programs, but they are only able to survive through collection and redistribution of goods and materials that have clear value to consumers, institutions and businesses. This is one of the most basic challenges facing Rhodes and her members: How do you balance social issues with business issues?

Rhodes says that ReDO “encourages organizations to be mission driven as well as fiscally responsible.” She points out that there must be a clearly defined mission statement that focuses everyone’s efforts on meeting specific goals. One of the “pitfall(s) is that some reuse organizations try to be everything to everyone.”

ALL BUSINESS

ReDO also stresses the need to develop a business plan that supports the mission while simultaneously supporting “a financially sustainable program.” In a very real sense, all reuse operations — thrift shops, building materials exchanges, used furniture outlets, surplus art materials centers, computer reuse groups and donation centers like Goodwill and Salvation Army — are all businesses. And in order to be self-sustaining, they must act like businesses.

In discussing the day-to-day job of reuse managers, Rhodes says that challenges are endless. Issues confronting most reuse managers include inventory flow, materials handling problems, personnel, transportation requirements, marketing, product merchandising, and community education, i.e., “getting people to think about buying reused items.”

Working with donors and forming partnerships with government, business and institutions is perhaps a challenge that is different for reuse centers than normal retail businesses. Whereas the retailer depends on market-based, monetary relationships with suppliers, reuse centers depend upon donors who understand their needs and mission. “It is critical to educate donors that reuse centers are not a junk yard for trash, but a facility for still usable items,” says Rhodes. “Donors [can also be] very demanding about pick-up schedules; however, with limited staff…it is critical to make clear to the donor when an item will be picked up — and live up to that commitment.”
To meet this challenge, many of the more successful reuse centers have established screening and sorting techniques to ensure the collection of truly useful items in good condition. The object, according to Rhodes, is to avoid unrealistic expectations or disappointment.

On the merchandising side of the equation, Rhodes says that although selling used and surplus materials is somewhat unique, basic sales principles are “key to getting materials moved through a facility and to people who can utilize them. People are most familiar with department store or hardware store settings. So, we encourage reuse centers to set up displays in a user friendly manner showing examples of how materials can be used.” She recommends that reuse centers categorize materials, post clear signs on aisles and shelves, make pricing information available, and post rules where people can see them.

In keeping with this approach, Baltimore’s Loading Dock copied the layout of a building materials warehouse store like Lowe’s. In programs catering to the needs of public schools, samples of how scrap can be turned into a school art and education project are displayed. At the Eastern Rensselaer County (ERC) Warehouse in Hoosick Falls, New York, showrooms were set up to show how furniture will look in a room setting.

As would be expected, a host of economic and business related challenges continue to confront reuse businesses of all types. Some organizations are meeting these challenges by focusing on market niches; others are diversifying by providing a number of different programs related to their niches. The Surplus Exchange in Kansas City, Missouri survives because they provide a variety of programs that bring in revenue such as an at-risk youth computer training program and a handicapped worker dexterity training program. And Baltimore’s The Loading Dock and the Rebuilding Center in Portland, Oregon are beginning to establish building deconstruction services in their communities to enhance their missions and simultaneously help maintain a flow of quality material into their stores.

Centers must also grapple with insurance issues. Depending upon the type of material handled, employee activity, type of facility the program is housed in and other factors, liability insurance can sometimes be a big ticket item. Insurance is also necessary for drivers and vehicles. Rhodes points out though that “instituting smart and simple procedures for safety in handling materials, keeping aisles clear, [and] properly handling chemicals…will go a long way to avoid any unnecessary injuries.” She says that Materials for the Arts in New York City has operated for 22 years without any liability problems.

COORDINATING BIG PICTURE ISSUES

Beyond the day-to-day nitty gritty of business advice, ReDO has a number of other missions. One is to work with solid waste officials and recycling coordinators to more overtly integrate reuse practices into solid waste planning. Considering that the EPA estimates that approximately 15 percent of the municipal solid waste stream is composed of durable goods, the synergy that can be created between reuse efforts and solid waste and recycling is clear.

An example of this synergy can be found in the partnership between suburban Seattle’s King County Solid Waste Division and Seattle Goodwill. In a successful pilot project instigated by transfer station workers who saw a lot of useful items getting trashed, the county got Goodwill to provide a 20-foot, roll-off container just beyond the weigh-scale at their transfer station for people to place items they no longer want. Customers still pay a normal trash tipping fee, but understand that it’s for a good cause.

Goodwill’s job is to sort the material and redistribute it through their thrift stores. Over five tons of material valued by Goodwill at $3,500 were collected in the first five months of operations. According to project manager Tom Watson, a waste prevention specialist for King County and a ReDO board member, the program has been well-received by the public and he hopes that it can be expanded.

As well-developed as many of the reuse centers are around the country, ReDO also sees the need for creating a national network of reuse centers and materials exchanges that can handle the enormous bulk of surplus and obsolete material coming out of corporate and industrial facilities. Individual center managers are often confronted with materials management problems that go far beyond their normal infrastructure capabilities. ReDO is in the early stages of setting up a networking mechanism that will allow member centers to coordinate activities when one of them is confronted with a manufacturer who has, for instance, 600 tractor-trailer loads of wood flooring or 1,200 pallet loads of roofing material. Typically, problems of this magnitude require a quick response and the ability to ensure that material will not be landfilled. By taking on an umbrella coordinating role, ReDO will be able to provide a guaranteed solution to large organizations and simultaneously help out its members by recovering quality material.

Important as developing new sources for material may be, the most vital issue facing reuse operations is what Danny Woodcock, operations manager for Rehab Resources, Inc. in Indianapolis, said in a recent ReDO newsletter. “The number one challenge facing us today is getting enough clients to take material away. There is an unlimited supply of materials out there, and the more materials we move out, the more new material we can move in, and the more impact we can have on diverting materials from the landfills. We need to let people know we are here and encourage them to use our resources.”

David Biddle (jango@aol.com) is Research Director for Philadelphia Self-Reliant and a contributing editor to In Business magazine. For more information on ReDO, visit www.redo.org, or call their offices at (317) 631-5395.