A: The Scrap Metal Exchange is a technology platform, a way for Brokers to compete with each other for Scrap Metal, Internationally. We are not in the referral business. We are in the business of assisting Scrap Producers & Processors who wish help in finding a Buyer and trust The Scrap Metal Exchange to recommend a full service professional, with an exact need and geographical experience. The Scrap Metal Exchange is also in the business of providing our broker partners incredible value as we provide an alternate source of business at a reasonable cost. The Scrap Metal Exchange's marketing success, our brand name, our technology and our experience with participating brokers, enables them to obtain market share in their area. We collect no up-front fees for our services but work on a success basis, wherein we receive a part of the broker's revenue after closing, and from that, we generally provide extremely generous rebates to Scrap Producers & Processors for using a The Scrap Metal Exchange broker.

Q: How can you say you are not in the referral business? Why else are you building a broker network? What would you call your revenue model?

A: Our business is to supply our customers with a service they need, finding a Buyer, and our brokers with volume. The Scrap Metal Exchange is a network, or an exchange, wherein two constituencies (buyers/sellers, scrap seekers/scrap finders) can find each other in an easy, cost-effective, and targeted manner.

Q: Are scrap brokers solicited by The Scrap Metal Exchange to join your referral program?

A: The Scrap Metal Exchange is not soliciting brokers to join our program. Our program has been open on an invitation only basis. We add brokers in any area where we are getting consumer requests for a Buyer and we do not have enough brokers on the network to provide Scrap Producers & Processors with choice. As we have plenty of broker choice available in all metropolitan areas this means we usually offer brokers the opportunity to join ou rnetwork in smaller, under-served locations.

Q: How does the program begin?

A:  To begin the first program is called a "one time broker" where we have a customer and no broker coverage. Montezuma, CO for example. In this case we would contact the consumer directly by phone to verify that they are for real and then we would go to the closest broker and ask them if they want the lead. For only those leads, the fee is negotiable, as our objective is to place the consumer with a Buyer. The rebates are always prorated based on the commission and the referral fee.

Q: Can brokers utilize the system, for their listings and then charge the same referral fee that they usually charge?

A: The Scrap Metal Exchange invites brokers to have listings shown on a co-branded website for which there would be no up front charge. This provides an increase in consumer audience that participating brokers receive at no cost unless closings occur.

Q: What is your strategy as far as growing your referral business?

A: Our goal is to continue marketing and advertising for our broker network and to deliver motivated Scrap Producers & Processors who trust The Scrap Metal Exchange to help them find the Buyer best suited to their situation.

Q: Where do you get your leads?

A: The Scrap Producers & Processors who use the "Find a Buyer" service come from our site, The Scrap Metal Exchange.com, as well as relevant partner web sites, affinity relationships, manufacturers, demolition co, Gov’t agencies, and other affiliates

Q: The Scrap Metal Exchange charges a 35 percent referral fee. How is that a "reasonable" cost? This is advertising. It's not like you are a processing company with a lot invested in the lead.

A: After we provide the rebate, the referral fee is more like 17 percent, an extremely reasonable fee for what we do. We spend a significant amount of money in ads, fees to our partners, technology and education. The close rates on our referrals are high and the brokers appreciate the business. The balance is the rebate which is also acceptable to our brokers and agents. They endorse the rebate as it reduces the cost for the purchaser or seller and it allows them to be competitive in this market without discounting their entire book of business. Also, the program is voluntary and they can drop out if they feel they are not getting value for their money. Very few brokers drop out of similar networks, leading us to believe that the vast majority do feel they are getting value out of their relationship with The Scrap Metal Exchange.

Q: Do you have permission from the National Association of Recylers to use the trademarked term Buyer in your advertising?

A: No. Our legal team plans to obtain permission. Why? Because NAR accepts the fact that our brokers and agents are Buyers, that we support the professional Buyer and because we use the name correctly. When we use the term BUYERS in our materials, we include this disclaimer: "BUYER® -- A registered collective membership mark that identifies a recycling professional who is a member of the National Association of Recyclers® and subscribes to its strict Code of Ethics."

Q: Are you planning to continue the use of automated tools from FNIS to give Scrap Producers & Processors more to do on the site? If they can automate their own scrap valuations, what do they need a Buyer for? Isn't this a conflict in your business model? Or is there another purpose?

A: Yes, we plan to give Scrap Producers & Processors whatever they need to become educated and empowered. We do not have an automated valuation tool. We leave valuation to the professional buyers, processors and brokers. We have a "Scrap Value Estimator" tool which allows a consumer to check prices in which they are interested. It is a free tool and delivers a fairly wide range of values. It is extremely accurate. All other models we checked were either not accurate enough or lacked a viable consumer interface as they were built for lenders, not Scrap Producers & Processors. Scrap Producers & Processors requesting more detailed and finite information are referred to our Buyers.

Q: Where on the The Scrap Metal Exchange site is it disclosed to the consumer that the broker you refer is paying you a 35 percent referral fee on the transaction?

A: We do disclose it on the site under the Terms of Use in the Scrap Metal Services section.

Fees and rebates are also supposed to be disclosed in writing by the Buyers to the buyer and seller in accordance with their local state laws and regulations, once a producer has chosen a Buyer. Rebates are paid only in states where they are not prohibited by state law and are distributed also in accordance with state law.

Q: Do you constantly seek other sources for listings and exposure for The Scrap Metal Exchange?

A: Yes. That is our business: Seeking partners delivering Scrap Producers & Processors to our network through The Scrap Metal Exchange technology. Our listings of scrap for sale will come from any legitimate source such as third party suppliers, MLS's and the brokers themselves. The Scrap Metal Exchange will only work with partners that provide us with listings through legitimate sources.