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Yard journal · Selling

What two hundred warehouse cleanouts taught us

Three findings turn up at nearly every site, regardless of industry, size or how well run the operation is. The third one is worth money to almost everybody who reads it.
Published
December 12, 2023
Written by
Ruthanne Pilcher
Reading time
9 minutes

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Key takeaways

  • Sites underestimate their accumulated volume by roughly half, consistently, across every industry.
  • The material is usually in better condition than expected — 70% grades 2A or 3A across two hundred jobs.
  • The floor space is frequently worth more than the material: a 1,200 sq ft bay costs about $8,400 a year.
  • Above about 60% reusable content a cleanout pays; below 30% there is a charge, and we say which before booking.

We passed two hundred completed cleanouts this autumn. They range from a single bay in a machine shop to a 40,000 square foot clearance at a closing distribution centre. Three patterns show up in nearly all of them.

Finding one: sites underestimate their volume by about half

Ask a warehouse manager how many bulk boxes are in the accumulation and the answer is reliably about half the real number. This is not carelessness. Flattened boxes stack invisibly, accumulation happens a few units at a time, and nobody counts something they intend to throw away.

The practical consequence is that the first quote is often based on a bad estimate, which is why we count jointly on collection and adjust rather than holding anyone to a guess made from a doorway.

Finding two: the material is in better condition than the customer expects

People apologise for the state of the stack. Then we grade it and a good share comes out at 2A or 3A. Boxes accumulate because there is no route for them, not because they are damaged — the damaged ones went in the compactor months ago.

The exceptions are predictable: anything stored outside, anything on bare concrete, anything at the bottom of a stack more than about nine bands high. Those three account for most of what we downgrade.

Grade distribution across 200 cleanouts
GradeShare of bulk boxesTypical reason
1A3%Over-ordered production stock, never used
2A26%Indoor storage, one previous trip
3A41%The bulk of every accumulation
4A22%Bottom courses, damp, repairable
Rejected8%Outdoor storage, contamination, wet

Finding three: the space costs more than the material is worth

This is the one worth money. Warehouse space in this region runs roughly six to nine dollars per square foot per year. A bay holding accumulated packaging is not free storage — it is rented floor you are using to store something you intend to pay someone to remove.

A 1,200 square foot bay at seven dollars is $8,400 a year of space, holding perhaps $3,000 of recoverable material. Both numbers matter, and the first one is usually the larger. We have run cleanouts where the material value was modest and the customer still came out several thousand dollars ahead purely on returned floor space.

People apologise for the state of the bay. They should be sending an invoice to whoever let it get that valuable.
Odell Marchetti, founder

The pattern that decides the price

Whether a cleanout costs you money or pays you comes down to one ratio: reusable material against genuine waste. Above roughly sixty per cent reusable and it pays. Below about thirty and there is a charge, because the labour and disposal are real.

We tell customers which side of that line they are on before booking anything, based on photographs. Getting it wrong helps nobody, and a cleanout quoted as a credit that arrives as an invoice is a relationship that ends on the same day it started.

The one thing to do before calling anyone

Take three photographs from the doorway and one of a box turned over. That is enough for a first opinion from us or anyone else, and it costs you ninety seconds. The most common reason accumulations sit for years is that nobody ever established whether they were a cost or an asset.

Questions

Follow-ups on this post.

How long does a typical cleanout take?
A single trailer load in a day. A full bay of accumulated packaging is usually three to five working days using staged roll-offs, scheduled around your dock hours so we never occupy a door your own freight needs.
What do you need from us to quote one?
Photographs from the doorway of each area, rough square footage, your dock hours, and whether a forklift is available. Anything over a trailer load gets a site visit before a number is committed.

Ruthanne Pilcher · December 12, 2023 · Selling

Written at the ReGaylord reload yard, 3259 Fiberglass Rd, Kansas City, Kansas. If any of it is wrong, or you have better data, tell us — several of these posts exist in their current form because a customer argued with an earlier one.

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