Creating Cash From Trash
A new e-commerce service is helping recession-racked contractors cash in on surplus project products. ZamRay.com is quickly becoming the Craigslist of the construction world, with 22,000 visitors and 110,000 page views within its first six months of operation. The Westminster, Colo.-based website is the brainchild of Kurt Fisher, 39, a former warehouse operations manager for electrical supply giant Gexpro, a unit of Dallas-based Rexel Holdings USA.
“One my responsibilities was managing excess inventory,” Fisher says. “Every quarter we would end up throwing away materials in the Dumpster.”
Fisher decided to turn trash into cash. Launched on Jan. 6, ZamRay allows contractors to transform extra project items into revenue. The site currently has over 25,000 listings for everything from dump-trucks and ceiling fans to screwdrivers and safety cones. ZamRay charges $24.99 for a 99-day listing, regardless of the item.
All deals made on ZamRay are between buyer and seller. But ZamRay has partnered with Escrow.com, a secure transaction site that charges a 2.5% to 4% fee based on the purchase price. The site is developing a system for rating and ranking buyers and sellers, similar to eBay's.
“I've had an ad on ZamRay for about a month and a half for some switchgear on a job that got canceled,” says Craig Barnes, president of Barnes Electrical Contracting Inc., Lafayette, Colo. “It's a pretty specialized piece of equipment, which cost $1,500. I have it up there for $850.” Barnes also plans on listing some leftover light fixtures as well as some temporary power poles.
“We often have many things leftover at the end of a job,” says Darrel Wilmoth, president of Infinity Construction Services Inc., Aurora, Colo. “We have had five stainless-steel disconnects listed on there for about a month. Without ZamRay, we would have no venue to sell it.”
Northern Electric, which owns 50% of the startup, has been invaluable in kick-starting ZamRay. The contractor's network of suppliers and subcontractors helped make crucial introductions. The partnership also helped create pacts with trade groups such as the Associated Builders and Contractors, Associated General Contractors and the American Subcontractors Association, among others.
“Our relationship was started through Northern Electric, which was already a member,” says Joshua Fowler, development director for the 200-member ABC Rocky Mountain chapter. “After talking to them, we decided a partnership with ZamRay would be a win-win for both groups. One of our goals is to help our members improve their bottom line.”
ABC members who post a listing on ZamRay receive a 15% discount, while the association gets $5 for every ad placed and renewed. In exchange, the association has a ZamRay link on its website.
Oakley Electric, Portland, Ore., stumbled across ZamRay by running a search on Google. “We had a warehouse of stuff that we had been trying liquidate forever. We had no way to get rid of it,” says Oakley field superintendent Brandon Bruenderman. “We weren't sure it was going to work, but we ended up selling three spools of wire—about 15,000 ft worth—to some guy from northern California for $6,000. He didn't even try to negotiate.”
ZamRay is counting on rising raw building materials prices and cash-strapped contractors for fueling rapid growth. Further, the site is playing the sustainability card by selling recycled items region to region. The U.S. Green Building Council in Denver has OK'd ZamRay for up to four LEED points. Fisher believes the sky is the limit for ZamRay's future and hasn't ruled out a merger or going public.
“Until now, there hasn't be been a venue to sell materials,” says Fisher. “You have to either get it off-site, scrap it or haul it back. But if you can convert that stuff into cash, why wouldn't you?”