Weighing a $38 per cubic yard vendor cap against direct trash-out pricing when the terms are net 45

Read the chargeback section twice before anything else. In packets like this there is usually language letting the vendor reverse a paid invoice for photo non-compliance within some window after payment, 90 or 180 days, and the reversal often comes out of the next check rather than as a bill that can be disputed on its own. Also look for who holds the risk if the property turns out to be occupied when a crew arrives, and what the personal property handling language says. Whether belongings can be disposed of at all depends on state law and often on a posting or storage period, so that clause needs to match the operator's state and a lawyer should read it before signing. The indemnity paragraph in these agreements is usually one-way.

Slightly lost here. A cubic yard is a measure of volume, right, so how do you count them in a house full of somebody's stuff? Is there a standard way or is everybody just guessing at the pile?

This thread answers a question a lot of people carry around, which is whether the cleanout side is something you can own without running crews yourself. So far the answer looks like no.

@megan_doyle15 most crews count in trailer loads and convert. A 6x12 dump trailer with 4 foot sides is about 10 yards heaped, so you walk the house and estimate how many trailer loads it is. My question for @mikeoconnell7 is who wins when your yard count and their desk estimator's yard count disagree. Do you get paid on your photos or on their reviewer's opinion of your photos?

For what it is worth on the direct side, a landlord dealing with a tenant who left a mess will pay $60 a yard on a turnover and never shop it, because the crew that shows up in two days is worth more than a 10 percent saving. The flippers you are working with almost certainly feel the same way. The problem with that customer is frequency. A small landlord needs a trash-out maybe twice a year, so the direct side pays better per yard and delivers far less volume.

Is $410 a month actually buying enough coverage for hauling other people's belongings out of a house? That premium reads low for the exposure involved, so it is worth confirming exactly what the policy covers before building the bid around it.

If the receivable is the constraint rather than the margin, factoring exists for exactly this. Factoring rates on field services invoices typically run 2 to 3 percent for 30 days, sometimes with a reserve held back. At a 17 percent contribution margin, 2.5 percent of the invoice is roughly 15 percent of your contribution, which is real money but may still be cheaper than carrying two months of payroll in cash. Worth pricing before you decide the working capital kills the deal.

A common pattern with these national vendor contracts is a hauler who signs and lasts about 8 months. The rate is rarely what ends it. The usual ending is something like $6,400 of chargebacks in month 7 over photo sets that had been accepted at the time, and by then 60 percent of his revenue is that one client, so he cannot walk. Whatever you sign, keep them under half your book.

Your per-job margin isn't the number that decides this. Compute contribution per crew day. If a crew does 1.2 jobs a day at $197, that's $236 a day against a fixed cost base of truck payment, insurance, phone, your own time, and whatever you pay for the yard. What's the fixed monthly number? Until I see it I can't tell whether 17 percent at high volume is a business or a treadmill.

One thing that drifts on you: tipping fees. Ours went from $58 to $72 a ton over four years and nobody renegotiated my rate for me. If you sign anything multi-year, find out how the rate schedule changes and whether disposal is a pass-through or baked in.

The thing that breaks at scale here is people. One crew is you plus two guys you know. Three crews is nine people at $22 an hour doing hard, filthy work, and the churn is brutal. Every replacement costs you a slow week and usually a damage claim. Budget for that before you budget for the second truck.

Take a rural assignment area where the transfer station is 34 miles out and open Tuesday, Thursday and Saturday until 2. That alone wrecks a 3 to 5 day approval loop, because the crew ends up holding a loaded trailer over a weekend. Ask what the property density looks like in their assignment area before you count on 1.2 jobs a day.

Adding to the earlier point, disposal rules on tires, mattresses and freon appliances differ by county, and some transfer stations flat refuse them, which means a second trip to a different facility. If their flat rates do not carry separate lines for that material, the contractor eats it every time.

The cash cycle is what I'd size this on, not the 17 percent.

Net 45 from approval, and approval on these platforms commonly runs 7 to 14 days after submission if your photo set is clean, longer if it isn't. Call it 55 to 60 days from the day you pay your crew to the day money lands. If you get to three crews at 1.2 jobs a day, 20 working days, that's about 72 jobs a month, roughly $82k of invoicing and $68k of direct cost. Two months of that floating is $130k to $140k of working capital you have to own or borrow before you see a dollar. That's the actual decision, and it's a bigger number than the truck.

So I'd sign narrow. One crew, and cap them at something like 40 percent of your monthly revenue by rule, not by hope, so the direct clients stay the base and this stays the filler that keeps the crew busy in the gaps. Before you sign, get two things in writing: the average bid approval turnaround, and whether you can raise the 45 yard cap to something like 70 on a photo submission without a full bid cycle. If the answer to the second is no, then most of the houses they'll send you are jobs where you either work at a loss or sit idle for a week, which is worse than an idle week you chose.

Price the maid service separately or decline that line. A $140 flat on a house that just had 30 yards pulled out of it is two people for most of a day, and you will lose money on it every single time.

@chriswalton8's factoring point is the fallback if they won't move on terms, and I'd rather pay 2.5 percent than carry two months of payroll on a card.

@derekj19 has it. A preservation crew that survives five years usually settles somewhere around 30 percent national work and 70 percent direct, and the national portion exists to keep the crew paid in January. The direct clients are the business. One more thing on the cap: get the yard measurement standard in writing too, meaning what counts as a yard and whether they measure at the trailer or off your interior photos. That disagreement is where a first year's margin typically disappears.

Before any of this, check what your state and county require to haul waste for hire, because some places want a hauler registration or a solid waste transporter permit and the certs that packet asks for won't cover it. Mine took six weeks to come back. Worth knowing now rather than after you've committed to a start date.