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When
They Save, You Earn Some
of our readers are familiar with the name CSRSI (Cost Savings and Reduction
Specialists, Inc.) as they are merchant service agents. However, it may be news
to some readers that CSRSI also provides non-hazardous waste management and
consulting services—and this could mean cash for ISOs. Ross
Federgreen, Executive Vice-President of CSRSI, tells us that they have
established a program by which ISOs are paid a portion of the setup fee
collected from the merchant, in addition to ongoing residuals, simply for
referring a new client of the merchant to CSRSI. This program has already proven
to be very lucrative for ISOs. Federgreen
tells us that the plan is easy to sell, since every merchant has waste that they
need to deal with. Unlike explaining an abstract concept such as transaction
processing, pre-paid gift cards, loyalty programs etc., the merchant sees (and
sometimes smells) garbage every day. Federgreen says, “It’s like night and
day—it’s so easy.” One
Man’s Trash. . . CSRSI is
actively involved in the management of non-hazardous waste removal. The company
offers three distinct services: •
Analysis of waste stream content •
Analysis of equipment needs •
Contract analysis and negotiation With
these three separate but integrated functions CSRSI reduces merchants’ costs
of non-hazardous waste removal. At the same time, merchants become valuable,
“green” community businesses, by more actively participating in recycling
efforts and reducing the amount of waste sent to landfills. Here’s
the part you’ve been waiting for: how ISOs can earn money. CSRSI signs a
three-year contract with each facility. The terms of the contract include a
non-refundable setup fee ranging from a minimum $500 per site (usually for
restaurants) to $5,000 per site (usually for major stadiums and arenas). ISOs or
sales agents function as independent contractors and receive 25% of the setup
fee. Therefore, an ISO can collect anywhere from $125 to $1250, per location,
just for the referral and signed contract with the new client. In exchange for
the setup fee, CSRSI provides analysis and implementation functions. During
the course of the 36-month contract period, CSRSI reviews the monthly waste
bills on a continuing basis, to make sure the location is realizing all the
possible cost savings. When they find areas for savings, they share in the
savings with the merchants, and so does the ISO. CSRSI collects 25% of the
established savings on a monthly basis. These savings are based upon the forward
savings determined from the merchant’s base cost. For
example, for a business that currently pays $100 a month for waste removal and
recycling, CSRSI would recalculate the fees, renegotiate the contract, and make
the waste stream more efficient. In this example, the monthly charge might be
reduced to $70, resulting in a savings of $30 per month. The ISO would earn up
to 30% of that “savings,” depending on the size of the merchant. Also,
CSRSI collects 25% of all recoveries from previous overcharges. Again, ISOs get
25% of these earnings. Merchant
segments that have benefited from CSRSI include malls, arenas, restaurants,
apartment complexes and industrial sites. Federgreen states, “The vast
majority of merchants we’ve talked to feel there is room for improvement in
this area. We are literally uniformly successful. We’ve dealt with major
corporations down to mom-and-pops, to churches and synagogues. There is not a
location for whom we have not saved substantial money.” Federgreen continues,
“Restaurants are critical. Every restaurant we have has yielded significant
results. Any large retailer that has a lot of materials coming in boxes, such as
toy stores do well too.” However, every location has garbage so you could
approach any of your accounts with this add-on service. If your
merchant is happy with his disposal service and you don’t want to risk
alienating him, you can tell him that CSRSI also works with major disposal
companies, such as Waste Management, BFI, Allied and Republic to make their
services more efficient. “They love us because we help them too. We increase
the density of their trucks and that’s how they make money, by having as many
picks ups on a truck as possible. They work with us every day of the week and
are very responsive.” How
do I get started? There
are no fees required of the ISO. The ISO simply approaches a merchant and asks
for basic information, such as what they are currently paying for removal or
haulage of their non-hazardous wastes and recycling. The ISO forwards that
information to CSRSI. Based upon that information and the description of the
property, CSRSI informs the ISO of how much that property would cost to set up.
If the merchant finds that fee acceptable, a contract is executed and the setup
fee is collected. The ISO receives 25% of the setup fee. “That’s the end of
his responsibility,” says Federgreen. “The ISOs are truly out of the loop
after that contract is executed and we are funded on the front end.” There
are also retroactive fees from which the ISO can benefit. Federgreen states,
“Many times we will find the particular location has been overcharged, such as
paying for a 6 cubic yard dumpster and actually having a 4 cubic yard dumpster
on site, or being charged for 3 pick ups a week when they are actually getting 2
or 2 1/2.” CSRSI is extremely careful about examining what has been contracted
and what is really occurring. Federgreen
also says, “Don’t be fooled into thinking that because a store has a
compactor that large savings can’t be achieved.” Many times the compactors
are not adjusted correctly, which can affect costs tremendously.” In other
words, more frequent deliveries to the dump cost more money. Where
do I sign up? |
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copyright 2001 · The Green Sheet, Inc. |
