Goodwill beefs up recycling revenue

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Goodwill is finding gold in discarded PCs, Christmas lights, televisions and the like. Its salvage operation is bringing in 7 percent of total revenue.

It's likely unsurprising that local Goodwill stores recycled tens of millions of pounds in 2011.

But in addition to its sales of donated goods — furniture to housewares, books and clothes — Goodwill Industries of the Columbia Willamette also runs a thriving salvage business.

About 93 percent of Goodwill's earnings come from the sales of donated items. But the remaining chunk of revenue — $8.9 million in 2011 — comes from gaming the salvage market, converting unsold items into a steady churn of income.

That revenue stream has jumped 43 percent since last year, thanks in part to upticks in pricing for raw materials and textiles, driven by demands in China and Africa. The remaining gains come from improvements made by Ray Miettinen, now in his second year as taskmaster of Goodwill’s four salvage operations in the Columbia Willamette area. Miettinen presided over this year’s gains and a 23 percent jump in salvage revenue in 2010.

“If I see anything that’s salvageable in the trash compactor it drives me absolutely crazy,” he said.

This is Goodwill behind the scenes: roughly 160 employees sort 2 million pounds of unsold goods a month, all from trailers rolling steadily to outlets from Goodwill’s other stores. They carry unsold items from around the Columbia Willamette area and first land on resale tables in the outlet stores, priced per pound in a last effort to sell them before they head to salvage.

Most Goodwill outlets – Portland, Salem, Hillsboro and Vancouver – are considered prime hunting grounds for local resalers. The tables are mobbed and hawked over by those who earn big money scooping up items for their own resale stores or selling online.

Behind those outlet stores, however, Goodwill’s salvage operations rein. Staffed largely by employees with barriers to employment, Goodwill doubly meets its mission by employing this tiny army of salvage sorters. The operation bundles massive shipments of textiles and shoes to Africa, raw materials for China, toys for South America, electronics, vacuum cleaners, plastics and more.

Every consumer trend means a potential revenue stream, says Miettinen: The advent of LEDs brought reams of old Christmas lights stuffed with copper wire. Flat screen TVs similarly yield old boxy boob tubes full of glass, plastic and metals. Old cell phones are fetching up to $9 a pound for their interior gold.

With more people experimenting with ways to make money, Miettinen said, “I think I’ve been able to leverage better prices because there are more buyers.” He’s also aggressive in his sales, hunting for buyers like a Wall Street broker hot on the trail of a hedge fund.

“Salvage buyers want volume, and we’ve got volume. That gives us more power in the marketplace to dictate pricing,” he said. He keeps 8 to 10 buyers at a time in some markets to keep prices high amid competition.

Columbia Willamette Goodwills receive more donations than any other Goodwill in the world, and resale more items. The charity operates without the donations and partnerships on which many other Goodwills rely, still putting about 94 percent of every donated dollar into services for job-seekers with employment barriers and services to the disabled. Miettinen said donor interest in keeping the money in programs inspired his push to squeeze more pennies from donations by dodging trash disposal fees and selling salvage.

“When it gets into my trash compacter, I feel horrible, not only because it’s not being recycled further, but because I have to pay for it,” said Miettinen.

This year Miettinen carved new revenue streams from glass, copper, tennis shoes (which command a premium in Africa), and vacuum cleaners (which some buyers pare down for plastic, motors and copper cords).

The operation has meanwhile reduced trash from the Columbia Willamette Goodwills by 17 percent in 2011, even while overall donations climbed six percent. Goodwill stores around the nation send trainees to Portland to learn the recycling ropes, and Columbia Willamette has also trained competitors, businesses and state government leaders in efficiency and recycling tactics.

For a look behind the scenes, watch the video below:

Lee van der Voo, lvdvoo*at*gmail.com, is a freelance writer for Sustainable Business Oregon.