A Trader Drops a Broker Relationship and Lists Directly
A scrap trader had relied on a regional broker for years to move volume to export buyers, accepting the broker's spread as the cost of access to those buyers.
This is an illustrative composite scenario built around how ScrapTrade's features are designed to be used, with representative numbers — not a verbatim account of a specific named customer.
The Situation
A scrap trader had moved export-bound volume through the same regional broker for several years. The arrangement was simple: the broker quoted a buy price for each grade, the trader accepted it, and the broker handled finding an export buyer and the logistics from there.
The trader never had direct visibility into what the broker actually sold the material for downstream — only the buy price they were quoted, which they'd always assumed was reasonable given the convenience.
The Problem
No visibility into the broker's margin
Without a reference price, there was no way to know whether the broker's quoted buy price was close to the export market rate, or whether a meaningful spread was being kept as the broker's margin.
The convenience had a real cost, unknown until measured
The broker relationship removed the hassle of finding export buyers directly — a real service — but the trader had never quantified what that convenience was actually costing per tonne.
Switching away from a known relationship feels risky
Years of a working relationship with the broker made it feel safer to keep accepting their quotes than to test whether direct buyers would pay more, even once market prices became easy to check.
The Approach
Started checking live market reference prices
Before accepting the broker's next quote, the trader began checking ScrapTrade's market price data for the same grades, giving a reference point that hadn't existed before.
Built a verified listing track record in parallel
Rather than switching all volume at once, the trader began listing a portion of each grade directly — GPS-verified, as usual — while continuing to sell the rest through the broker, testing the waters without fully cutting ties.
Compared broker price to auction result, grade by grade
Each grade sold both ways over a few months, which let the trader directly compare what the broker had quoted against what the same grade cleared for via live auction on the marketplace.
Shifted volume once the gap was consistent
Once the pattern held across several cycles rather than one lucky auction, the trader moved the majority of volume to direct marketplace listings, keeping the broker only for grades or volumes where their logistics service still added real value.
Execution Timeline
Trader starts checking ScrapTrade market prices before accepting broker quotes.
First parallel test: a portion of HMS 1&2 volume listed directly alongside the usual broker sale.
Direct auction result for HMS 1&2 clears meaningfully above the broker's quote for the same grade that month.
Test repeated with a non-ferrous grade (copper); gap holds again.
Majority of volume shifted to direct marketplace listings; broker relationship kept only for select overflow volume.
The Results
Across the grades tested, direct auction results consistently cleared closer to the market reference price than the broker's historical buy price had, confirming the gap wasn't a one-off.
The trader kept the broker relationship for occasional overflow volume where the broker's logistics handling still saved more time than the price gap cost — a deliberate choice, not an all-or-nothing break.
Profit Breakdown
| Lot | Quantity | Broker's Historical Buy Price | Direct Marketplace Auction Result | Difference |
|---|---|---|---|---|
| HMS 1&2 Steel Scrap | 30 tonnes | $298/tonne → $8940.00 | $338/tonne → $10140.00 | +$1200.00 (13.4%) |
| Copper Wire Scrap | 600 kg | $7.10/kg → $4260.00 | $8.05/kg → $4830.00 | +$570.00 (13.4%) |
| Combined Gross | $13200.00 | $14970.00 | +$1770.00 (13.4%) | |
| Less: ScrapTrade commission (1% of direct marketplace auction result) | −$149.70 | |||
| Net Proceeds via ScrapTrade | $14820.30 | |||
| Net Gain vs. Broker's Historical Price | +$1620.30 (12.3%) | |||
Key Takeaways
- A broker's spread is invisible until you have a reference price to compare it against — checking live market prices is what made the gap visible in the first place.
- Testing directly alongside an existing relationship, rather than switching all at once, made the comparison low-risk and the evidence solid before committing.
- Cutting out a broker isn't always all-or-nothing — keeping them for genuine overflow or logistics value while taking the rest direct can be the better trade-off.
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