As so many of us know, the recyclables business is highly lucrative.
Where there’s such huge sums of money to be made, and given the fact so many deals are made remotely, the international recycling industry continues to a breeding ground for fraudsters – to the point that legitimate sellers are increasingly difficult to pinpoint.
But Tradefox founder, Chris Yerbey, is trying to change this by building closer connections between trustworthy traders; ensuring that no-one else loses huge sums of money from unscrupulous fraudsters.
Trust: A Commodity In Short Supply
The recycling industry is often likened to the Wild West. Trust is a commodity in short supply. It’s not hard to see why. Scams involving empty shipping containers, low grade materials, falsified shipping documents, or even fake press releases and media attention, are just some of the reasons that upstanding importers lose millions of dollars every year.
Several years ago, Chris himself was a victim of such a scam – losing $150,000 on a single trade. Instead of hiding away, feeling sorry for himself, Chris decided to act.
He began speaking to other buyers in the industry about their experiences. and started to understand the problem. Chris learned that he wasn’t alone in suffering massive losses. Many other traders and importers were the victims of fraud too – but few were keen to open up about the issue.
Breaking The Stigma
There were a few key reasons why so few would tell their stories openly. Many were concerned about the social stigma of ‘losing’, and given the nature of the industry itself, the belief persists that fraud is expected at some point – it just goes with the territory.
One other key issue was that technically, in some cases, depending on where the fraudulent party was based, it could often be hard to prove they were doing anything illegal. Plus in many cases, losses couldn’t be insured if fraud, cancelled contracts or quality claims were involved. Added to this, the costs and difficulties of bringing rogue traders to justice often outweigh the benefit of doing so.
Prevention, Chris felt, was a much more proactive measure. This was the thinking behind Tradefox, which over the last eight years has gained a reputation for being the recycling industry’s equivalent to Trustpilot.
Rebuilding Trust Between Traders
With just over 3,800 members – more than any other industry trade association – Tradefox has become the go-to platform for scrap importers and exporters.
Using the platform, members can unlock detailed trade reputation reports and openly trade with minimal risk; safe in the knowledge that those they’re buying from are equally trustworthy.
To prove this, all of their import/export data credit information and seller/buyer feedback are analyzed – as a score is assigned to them based on this data. Users can also see what metals others trade in, and get insight from others their vendor has traded with previously. And once they find a reputable partner, they simply hop on a video call to iron out the details.
This sense of community also helps members build genuine, trust-based relationships online; something that’s increasingly important as the world adjusts to a recalibrated way working in the wake of COVID-19. And as fewer traders need to meet in person to establish trust, the time and cost savings associated with less travel are significant too.
All things considered, with nearly 1% of the cost of all imports being lost due to fraud or bad deals – in an industry that´s worth just over a quarter of a trillion dollars – there’s an urgent need to address the trust gap and the inefficiencies of the recycling industry.
Reputation is crucial in a business where promises can be broken and large sums of money are at stake. With Tradefox growing rapidly, more scrap buyers and sellers can focus on growing their businesses, rather than doing battle with unscrupulous fraudsters.
But the battle rages on. At least for the time being; until the rest of the recycling sector cleans up its act.
Due to the COVID-19 crisis, Tradefox is hosting a 2 day virtual recycling conference to help honest buyers and sellers connect. Find out more here.