A Feedstock Tip

By Bill Reed | September 18, 2009
As I witness several biofuel companies in distress due to lack of feedstock, I feel attention needs to be directed at some very basic but overlooked industry standards. If biofuel producers intend to compete with rendering companies for spent cooking oil, it is imperative that more attention be paid to the sales tactics; especially to the person who is representing your company. There are numerous "high-tech" positions available in help-wanted ads throughout the entire United States, but very few of those ads are from companies in search of feedstock procurement personnel. Securing an experienced feedstock procurement employee in lieu of a salesman could very well be your ticket to success. I know for a fact that there are knowledgeable feedstock people in the rendering business who would entertain the biodiesel industry as a new challenge. There are numerous things to learn about waste oil and the places that produce it, so why would you not send in a person who is seasoned in the waste oil business? By the time a salesman figures out how to approach, introduce and secure an account, his credibility is gone, your company looks foolish and, most importantly, you can add this customer to your do not call list.

I recently took a working vacation and visited several biofuel companies I had been speaking with regarding their feedstock procurement practices. I was amazed at what I learned and how blind these producers were when looking at their collection procedures. The companies I visited were all competitors and I did not mention the names of other companies while visiting each. They all had the same story and just didn't see the big picture. They all needed feedstock in the form of waste cooking oil, but were not willing to pay a wage for a sourcing agent, which is the industry standard for similar companies such as renderers.

They all wanted large sales forces, a salesman in every town, and thought that commission sales was the way to go. One company relayed to me that it had just lost a major account that was 25 percent of its feedstock. The company knew nothing about account retention and was too embarrassed to revisit. No benefits, no transportation, no reimbursement for company-spent money equals no business. These companies, and possibly other biofuel companies, are dealing in gallons while the waste oil business has always used pounds. You use scales with liquids that vary in viscosity and I don't know of any scale that reads in gallons. At plant level use what ever works, but on the street, pounds are the measurement of choice.

Rendering companies have been working with grease for longer that biodiesel will ever be alive. The feedstock that is needed is available, provided the right person is representing your company. Waste oil producers want one main thing: their oil gone and no mess. Resistance to change is the biggest obstacle to overcome; all suppliers have heard it all before, and have made the change only to find out that the new company failed to perform as promised. When you tell a customer that you will perform, you'd better do it-do it better than promised-because there aren't many second chances.

With my 40 years of rendering experience focusing on feedstock procurement, I see this as an issue of different playing fields. Biodiesel producers have a great opportunity to grow customer bases if they understand how the game is played. I see competition from biofuel producers, but they are not competing in the same game. The end result is the same: acquire waste oil for free or for as little payment as possible. But the reason they can't grow a solid customer list is that biofuel producers are wearing hockey uniforms to play baseball. There is no need to step out of the box-you need to step back into the box. Look at what your competitors are doing, they have been doing it a very long time. Talk to a competitor's driver. Drivers are always the first to tell you what their company is up to. Seek out a solicitor from the rendering business and don't be afraid to pay him or her a damn good salary. He or she can bring you years of experience that will never be achieved by a salesman. Let's face the real truth-without feedstock we have no business.

Bill Reed is the sole owner of Gold Coast Services. He can be reached at (530) 824-1106 or at wastecookingoil@aol.com.
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