A buyer asked me yesterday how we calculate a buy-back quote. The honest answer is we have a spreadsheet, but the spreadsheet is doing roughly six things, and it's worth being clear about them.
1. Tank yield value
For each tank size and grade we have a current sell-side range. A 275 reconditioned to Grade B sells for $115–$135. After wash labor, freight, and overhead, our margin per tank is roughly $35–$50. That's the upper bound of what we can offer the seller.
2. Inbound freight cost
The biggest variable. If the seller is within 60 miles of our yard and we have a route headed that direction this week, freight is $4–$8 per tank. If they're 220 miles out and we need a dedicated run, freight is $28–$42 per tank.
This is why our offers vary so much. Two sellers with identical tanks and identical conditions will get different offers depending on where they sit.
3. Wash chemistry cost
If the prior fill is straightforward (food, water, glycol), our wash is fast and cheap — about $4 per tank in chemistry. If the prior fill needs a more aggressive caustic cycle, it's $9 per tank. If we can't determine the prior fill at all, we have to assume the worst and the offer drops.
4. Valve and gasket condition
A broken valve costs us $12 in replacement plus 15 minutes of labor. Missing gasket is a $4 replacement. We bake these into the per-tank offer rather than nickel-and-dime the seller.
5. Volume bonus
Pickups of 20 or more tanks earn the top of our range because consolidation efficiency improves. Pickups of 4 tanks earn the bottom because the freight per tank is the binding constraint.
6. Time elapsed
If the seller emptied the tank three months ago, residue is dry and easy. If it's been emptied for 18 months and stored outdoors, the bottle may be cosmetically degraded enough to push the tank from Grade B to Grade C.
What this looks like in practice
A clean 275 sitting at a Detroit auto detail shop, prior fill car wash soap concentrate, drained within 90 days, valve intact, pickup of 22 tanks within a sweep we can consolidate: $42 per tank. Same tank, but only 4 tanks total at the site: $28 per tank. Same tank, but 350 miles away with no route in the schedule: $18 per tank.
The quote isn't arbitrary. It's six small numbers added together. If the math doesn't work for you, ask us to walk through the inputs — we'll show you which one is the binding constraint.