Refining the Trust Relationship
The best practices for establishing a partnership with your vendors.
Sweeping advances in technology over the years mean that business success requires more savvy and sophistication than ever. While this is certainly true of the dental laboratory business, it is also true that ours is still in large part a “relationship” business. Dental laboratories must develop, maintain, and nurture relationships with their dental practices, most of which have been owned by individual dentists for 20, 30, or 40 years or more.
Of equal importance are the relationships dental laboratories must also maintain with their vendors, upon whom they rely to deliver materials and other products and services that they can count on case after case, day after day, year after year. This means that dental laboratories must be able to trust their vendors implicitly.
There is perhaps no vendor for which trust is a more important issue than your precious metals refiner. This is not something to treat lightly, particularly when you consider that the refining process could well be taking place hundreds or even thousands of miles away. Among other things, you need to trust that your refiner will:
• Process your scrap correctly.
• Recover 100% of the precious metals.
• Give you an accurate report.
• Pay you a fair price.
As you ask prospective refiners the right questions (see sidebar on left), their answers will give you some powerful insights into just how trustworthy they are. As you go through this process, you should be wary of anyone who:
• Proposes to serve as a middleman between you and the refiner. You want to deal directly with the refiner.
• Offers to pay cash-on-the-spot deals. There is no way anyone can accurately estimate the precious metal content of scrap when they are in your facility. The only one of the four precious metals that is noticeable at all is gold, which means that any cash offer could not take into account the other three metals. In addition, if they are in that much of a hurry to “do a deal,” it is probably because they do not want to give you time to find a better deal.
• Makes outrageous turnaround promises. A scrap melt and complete assay take 5 to 7 days.
• Uses contracts and settlement statements with extensive fine print. Deal only with someone who has nothing to hide.
Tony Circelli is the precious metals refining manager at Heraeus Kulzer and has been with the company since 1976.
While understanding the refining process and identifying a reputable company to provide fair value for your scrap may be a challenging and time-consuming task, be assured that there is enough money at stake to make it worth your while. As you investigate potential refiners, the following questions should be asked:
Exactly what will you collect from us? (Their list could include any or all of the following: grindings from finishing benches and drawers, spills and slag from casting wells, floor sweeps from casting and finishing departments, suction system debris, platinum foil scrap, buttons, sprues, remakes and crucibles, platinum muffles, thermocouples, and more.)
Are you capable of performing all the processing from start to finish at a single location or facility and within the same company?
Do you pay for all four precious metals—gold, platinum, palladium, and silver?
Do you provide free scrap audits?
Do you provide assay reports or a certification of the assay?
What kind of assaying technology do you use? (Inductively coupled plasma (ICP) atomic emission spectroscopy is considered state-of-the-art.)
Will you provide a fire assay when needed?
How and when do you set your settlement prices? (Setting prices based on London Metal Exchange prices the day of assay is one accepted approach.)
Do you assess any charges? (Make sure they will not assess treatment charges, assay charges, freight charges, weight charges, accountability charges, minimum lot charges, or low-grade lot charges.)
What are your refining fees? (The industry standard is around 15%.)
What kind of settlement payment options do you offer?
Do you keep careful customer records and monitor trends closely?
Do you offer tours of your refinery?
Can you provide several customer references?
