May 24, 2024 • 25min

The junkyard economist

Planet Money

This episode of Planet Money follows John Ralston, a long-time "junk man" in San Francisco, as he navigates the world of clearing out houses, offices, and other spaces filled with discarded items. John has spent the last two decades developing an expertise in identifying valuable items hidden within piles of seemingly worthless junk.

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Key Takeaways

John Ralston is a "junk man" who has spent the last two decades clearing out houses and offices, finding valuable items in the discarded junk
The junk market provides insights into broader economic trends - understanding how John operates and what he finds valuable can reveal insights about commodity markets, consumer behavior, and more
John has developed an expert eye for identifying items that can be resold for profit, whether as raw materials (metals, plastics, etc.) or as vintage/collectible items on platforms like eBay
The process of sorting, selling, and disposing of junk is a complex ecosystem, involving scrapyards, recycling centers, online marketplaces, and more
John's business model involves getting paid to clear out spaces, then selectively reselling the most valuable items he finds - the "gravy" on top of his core clearing services

Introduction

This episode of Planet Money follows John Ralston, a long-time "junk man" in San Francisco, as he navigates the world of clearing out houses, offices, and other spaces filled with discarded items. John has spent the last two decades developing an expertise in identifying valuable items hidden within piles of seemingly worthless junk.

The episode portrays John as a kind of "trash savant" - someone who can look at a jumbled collection of old furniture, clothing, appliances, and other castoffs and quickly determine what has resale value, whether as raw materials or as vintage/collectible items. By understanding the junk market like John, the hosts suggest, one can gain insights into broader economic trends and consumer behavior.

Topics Discussed

John's Background and Transition to the Junk Business (5:50)

As a high school student, John took a career test that suggested he was best suited to be a garbage man - something he initially resisted, as he saw himself as an aspiring poet
However, after college and various other jobs, John became fascinated by the "garbage" he would haul to the dump after his shifts, eventually getting an artist-in-residence position at the San Francisco dump
This experience sparked John's obsession with junk and led him to start a business clearing out houses and offices, finding valuable items amidst the discarded items

The Junk Clearing Process (7:19)

John and his team get paid by the truckload to clear out spaces, then must decide what to do with the collected items
Some items are sold as raw materials (metals, plastics, etc.) to scrapyards and recycling centers
Other items, especially vintage or collectible ones, are resold on platforms like eBay for higher profits
The process involves carefully evaluating each item's potential value and resale market

Selling Scrap Metal (8:01)

John first takes a truckload of items to an auto repair shop to sell old tires, making a small profit after accounting for disposal costs
Next, he goes to a scrapyard to sell ferrous metals (steel, iron) by weight, earning around $55 for 1,400 pounds
He then sells non-ferrous metals like aluminum, copper, and lead separately, earning an additional $100+ based on the purity and market prices

Selling Cardboard and Other Materials (16:24)

Cardboard is a major source of revenue, with the price fluctuating based on market demand - currently around $95/ton
John sorts the cardboard by grade (single-wall vs. double-wall) to maximize the price
Other materials like plastics and wires are also sold to recyclers, with copper being the most valuable

Reselling Vintage and Collectible Items (21:46)

John keeps certain items he believes have value as-is, like an 80-year-old tin of tobacco, to resell on platforms like eBay
He has strict criteria for what he'll list on eBay, including a minimum expected sale price of $30 and consideration of the competition and sell-through rate
John acts as a "matchmaker" between his collection of objects and potential buyers, leveraging his expertise to identify valuable items

The Economics of the Junk Business (25:40)

John's goal is to make $50/hour through his junk clearing and reselling activities
On the day chronicled, he earned a total of $903.28, exceeding his goal by making over $90/hour
The core of his business is the clearing service, which provides a steady income, while the reselling of valuable items is the "gravy" on top

Conclusion

This episode provides a fascinating look into the world of professional junk clearing and the complex ecosystem surrounding the reuse and recycling of discarded items. John Ralston's expertise and entrepreneurial spirit have allowed him to turn his passion for "garbage" into a successful business model.

By understanding how John identifies valuable items, negotiates prices, and navigates the various markets for scrap, recycled materials, and collectibles, the episode suggests that one can gain insights into broader economic trends and consumer behavior. The junk market serves as a microcosm of the larger economy, with John acting as a savvy operator who can extract value from what many would simply discard.

Ultimately, the episode highlights the importance of perspective and the ability to see potential value in unexpected places. John's story demonstrates how one person's trash can become another's treasure, and how a keen eye and entrepreneurial mindset can uncover opportunities in the most unlikely of places.