Dentaltown October 2019 - 51

HF: That guy coming in the dental office
who's looking at it-I mean, it's voodoo
economics. He has no way of knowing what
he's buying, and dentists have no idea of
knowing what they're selling.
DW: Dr. Skidmore, a Townie in California, got a cash offer for $950. He passed
it up, sent his metal to us and ended up
getting $2,300-the actual melt value was
almost three times as much as his initial
cash offer. That's not an aberration; that's
a typical case where the cash offer could
be as low as one-third of the actual value.
HF: They separate the gold into a white
pile and a yellow pile?
DW: This approach is a poor financial
decision for dentists because now, for the
first time in years, the palladium market
is more expensive than gold. Dentists and
assistants and office managers don't follow
the palladium market, and that's where
the confusion comes into play: Now the
white pile, traditionally discarded as an
afterthought while the focus was on the
yellow gold, may be worth more than the
yellow pile because of the palladium. Dentists
don't know that, and that leaves a lot of
room for potential chicanery and dishonesty.
In the defense of some of these people
who are paying cash, it's not necessarily that
their intentions are not ethical; it's also that
they don't know what's inside the scrap. It

could be palladium at $1,400 an ounce, or it
could be nickel, which is worthless. Because
of that uncertainty, the offer on the white
pile is low, and that potentially leaves a lot
of money on the table.
HF: I got out of high school in '80, so
I've only seen maybe a half-dozen companies
come out and grow 30,000%. One of them
was Southwest Airlines, and Herb Keller
always said the secret to lower prices is lower
cost. So if you're going to get more money
for your gold and palladium, then you've
got to deal with someone who has less cost.
That's why you go direct.
DW: It's great you bring that up, because
I wanted to explain a couple things about
middlemen, reps, etc. A long time ago, we
used to have some reps also, but we decided
that there was really no benefit. Back in
the day, they'd pick it up and save you
time from boxing it up, but nowadays we
find that dentists don't mind boxing it up
and sending it if they're going to get more
money. So we got rid of our reps.
Labor is probably the biggest expenditure
for all companies-especially refining
companies. One of the pillars to why dentists
tell us our returns are the best is because
we can afford to pay you what we say we're
going to, because our costs are so streamlined
and efficient because we save so much by
not having one single rep in the country.

Hear the entire
podcast online!
This article includes just some of the highlights
of Dave Weinberg's conversation with Dr.
Howard Farran. To download the podcast,
watch the video or read a full transcript,
go to dentaltown.com/weinberg-on-trust.

dentaltown.com \\ OCTOBER 2019

51
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Dentaltown October 2019

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