Avoiding Metal Supermarket extortion and Saturday shopping

[torinwalker]

I was on metalsupermarkets shopping for a simple 3" billet of aluminum, figuring that I'd like to keep some on hand for the occasional odd job. I started by entering a length of 1" to get a feel for the price and I was surprised by a price of $13.91! Typing in 2" produced a similarly striking price of $20.80. As I continued to increase the length however, the price average per unit length reduced to a more reasonable figure.

So I explored further; I sat there and graphed the entire pricing structure for this particular dimension of aluminum from 1" to 48" inches in 1" increments, then every 12" thereafter up to 12 feet, resulting in the the attached graph.

As it turns out, if you want a piece of 3" aluminum round 1" long, it'll cost you $14.00/inch. Two inches is $20.80 ($10 per inch). Three inches is $23.84 ($7.95/inch). The price drops sharply at four inches to $16.67 ($4.17/inch) which actually causes the price to dip below the cost of three inches due to their price tiering. From 5" and beyond, the price rises as the length and the average price per unit length slowly dwindles. At 12 feet, the price is at it's lowest markup. 12' is the longest section one can purchase of this particular dimension.

I estimate that to get a reasonable price (i.e. fair markup) for one's purchase at metal supermarkets such as these, one would want to purchase more than 3 ~ 4 feet of material. At this length, the markup is only 25% higher than the lowest price shown in the graph which at 12 feet is $1.57 per inch.

Now on to my second point - metal supermarkets that aren't open on Saturdays. Yeah, I know - what's the big deal? Just take off an hour earlier and catch them before they close. Sure, but what if I think of something I'd like to do and it's Saturday? In that case, no such luck. I was surprised at how few stores are open in the GTA (read: nearby) who sell metal.

So, I wonder: Is there a market for a guy like myself to stock some larger pieces of metal for occasions where like-minded hobbyists find themselves in need of a chunk of metal for a weekend project, who are, shall we say, disappointed with the pricing structure of metal supermarkets?

It is reasonable to expect such pricing of these types of stores however: They have four staff on hand to take orders and cut metal, they have rent to pay, and utilities (hydro), and probably some overhead where it concerns franchise royalties.

It has me wondering if one could strike up a similar competing business. Could these metal supermarkets have established pricing structures specifically to curtail the purchase of tiny amounts of material? The overhead to cut a material is effectively constant regardless of length, so the pricing may be a tactic to combat low profiting on labour costs.

It also has me wondering if I could save a couple of bucks by sharing the cost of a larger length material and splitting it with several people. How long would you (the reader) be willing to wait to receive material if you knew you could get it for significantly cheaper? (i.e. closer to the $1.57/inch described earlier?)

Would anyone care to discuss?


Torin...

[Caprirs]

The company has to pay the employee to take the order and spend time processing it regardless of the length of "stick" being purchased. In essence, even if the order was for .0001" (disregarding whether the saw could cut this ), a person with a certain hourly wage sitting in a building with monthly rent and utilities using a saw (possibly leased, definitely using consumables) means there is a bare minimum cost. In addition, the credit card process will eat a certain minimum fee for running a transaction of $.01.

There are a lot of other factors other than the cost of the raw material.

[harryn]

Hi, about 30 years ago I lived in out in the country in IA. Most stores were closed on Sat in the nearby town, and the nearest real "city" was 1.5 hours each way. The ability to buy things through the internet didn't exist - at any price.

I learned prety fast to be like a boy scout - prepared and planning ahead for what might or be needed, and to stock up on some common sizes of items that I played with, or improvise. The modern trend toward stock minimization and instant access has us all lulled into a stupor.

The pricing chart you posted is very interesting - thanks for doing that. It is remarkably similar to how electronics parts are sold at industrial suppliers such as Newark, Digikey, etc. I do know a few people that have common interests that have gone in together to buy some inventory of items for sharing.

More or less, there are "fixed costs" assocated with every transaction, and variable costs. Many companies simply refuse to accept orders of less than $100 due to this. I have seen estimates that it costs many companies $ 100 minimum just to "place" an order, never mind what it costs to process it by the company getting the order.

This sounds high until you figure that with overhead and taxes, few people actually cost less than $ 30 / hr, and $ 100 / hr is more common. ($ 15 / hour goes just to social security, and another at least $ 15 / hr just to various state programs in California out of that $ 100 / hr)

From your graph, it looks like at 4 ft, you have reached the majority of the available discount, and sizes in the 6-8 ft range are similar enough to common wood lengths that storage is not usually a problem.

It might make sense to really look at the alloys you plan to use for various projects if you are going to buy this much material. While 6061 - T6 is a common alloy, I don't personally use it unless I have to, as it machines poorly for my simple capability, and has only moderate strength. There are 5000 series alloys that machine much more cleanly and 7000 series that are much stronger (and harder) and also make nicer chips vs those long strings from 6061.

I don't use ebay, but lots of people do. If someone has to buy on-line (from you) then somehow you will need to be able to compete with that market, unless someone is really nearby. Then it is sort of like craigslist postings and local adv, plus the credit card or paypal fees, which can hit 15% effective really fast.

I don't mean to discourage you, just that you keep these areas in mind as you entertain ideas.

It would be interesting to see if any of the local machine shops would consider to sell some material to you. I am guessing you could almost use their scap lengths if it is for hobby use.

[torinwalker]

Toward the last third of my post, I specifically stated that they are justified in their pricing scheme. I'm not sure why you're telling me what I already stated.

But to further clarify, what I am trying to say is, because of the exponentiated pricing model necessitated by their high overhead in running the operation, an opportunity may exist to compete. I was asking for opinions on whether other people would be interested in, for lack of a better term, "sharing" in the cost of materials (like a group-buy) to reduce the overhead.

For example, I suspect that smaller round sizes 0.75", 1", 1.25", 1.5", 1.75", 2", 2.5", and 3" aluminum, as well as similar simple multiples of 1/2" for flat aluminum bar would be very popular among hobbyists who wish to tinker on their lathes and mills. If enough hobbyists were to come to me for their material, rather than go to a metal supermarket, I would be willing to purchase larger lengths of some of these dimensions if I could sell off whatever I don't use myself.

Given that I would serve this material out of my garage, I would eliminate the overhead of four employees, rent, and especially royalties. The benefit, for my trouble to cut some material now and again for strangers, is that I get access to a greater selection of material for a cheaper price.

Plus, my Saturday shopping is in the bag!

[Caprirs]

Local to me, there are some recycling places that will sell scrap by the pound, and in some cases they will cut to length. Since many of the materials they get are the "drops" and remnants from the larger metal distributors, this material was going to be melted down anyway so the cost is much less. The limitation is the material isn't well inventoried and isn't in from-the-mill condition. But it is less expensive and they are not so picky about the minimum order size.

A large local distributor has a retail store that is open on Saturday mornings and stocks lots of stuff including many pre-cut sizes such as 12" bars in a variety of cross sections.

[MrWild]

I found a GREAT source of cheap metal. Sure, most of it is tubing, and then there is wire mesh, but gosh, you get some casters and sheet metal too, and all for just TWENTY FIVE CENTS! It's great, and who would have ever thought a food store like Aldies would be selling metal.

[Kipper]

Originally Posted by MrWild I found a GREAT source of cheap metal. Sure, most of it is tubing, and then there is wire mesh, but gosh, you get some casters and sheet metal too, and all for just TWENTY FIVE CENTS! It's great, and who would have ever thought a food store like Aldies would be selling metal.

If you buy 2 you have enough metal to make a really nice toolbox trolley too!

[ger21]

Since you're in Canada, you're options are probably much more limited.
For online shopping, I like Online Metal Store | Small Quantity Metal Orders | Metal Cutting, Sales & Shipping | Buy Steel, Aluminum, Copper, Brass, Stainless | Metal Product Guides at OnlineMetals.com

If I go to my local MetalSupermarket, they have a lot of smaller cutoffs that they sell for much less than cuts from full pieces.

[titan99]

The title "extorsion" surprises me. If machines shops like to stock all the raw materials and share among other machine shops, then actually the material cost will be even more higher. Metal dealers speacility is their bulk sourcing from mills with material certificates and keeping it for retail supply. MTC for materials is required for all seroius stuffs.

Titanium Suppliers*Rods*Bars*Sheets*Plates*Tubes*Metal & Alloys*CP Grades*Singapore

[pasha_kazmi]

I've looked in the major supermarkets in the area but to no avail. I'm in desperate need of either an approx 200 gram tub of them or two or three tubs of the mixed coloured ones. Can anyone help.

[pasha_kazmi]

How to use mastercam to make a .NC file which can control both Turrent A(G14) and Turrent B(G13) On an Okuma OSP500L-OSP5000L CNC Operating System.

[DMF_TomB]

you pay for the 12 foot piece to be cut.
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many places charge extra if cut piece is over 3" as the remainder piece needs to be sold and maybe more difficult to sell because of larger size and lower sales in larger sizes.
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it is always cheaper per pound buying full lengths, by the ton, and by the truckload,
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took a tour of a steel mini mill once. their daily production was 2by2 angle 20ft long and made a pile 20ft wide by 20ft tall. more steel than many machine shops use in a lifetime was daily production amount of a "mini" steel mill.
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price of most things often are at least 50% logistics costs. warehousing, shipping, taxes, etc. many modern factories skip most of this by leaving it on the truck, product is on consignment, being delivered, etc.
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often a shop being able to compete has more to do with the science of logistics than their machines and employees. in modern factories the dirty words are warehouse, stockroom, asset taxes, burden costs, etc.