How Much Catalytic Converter Recycling Owners Make on $4745M Revenue
You’re buying before you get paid, so revenue is not owner income This page estimates catalytic converter recycling take-home income from first-year modeled revenue of $4745M, known direct costs, $252k monthly fixed costs, a $140k general manager role, reserves, and settlement timing it excludes income taxes, debt service, and any converter purchase cost not provided in the data
Owner income$2.8MNet margin59%Revenue for target pay$4.7MBusiness difficultyHard
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Owner income calculator
Estimate owner take-home and the target-pay gap from revenue, margin, costs, reserves, and target pay.
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Planning note: This is a researched planning estimate only, not guaranteed salary, tax advice, or owner distribution advice.
Want the six drivers that matter most?
1
Acquisition Volume
$4.7M-$19.1M
More legal converter buys push revenue from $4.745M in Year 1 to $19.075M in Year 5, so owner income rises fastest when intake stays steady and local sourcing stays clean.
2
Spread Capture
6.0%
The buy-sell spread is the core margin buffer, and the model's 6% COGS means small changes in purchase price or recovery rate flow straight to profit.
3
Assay Accuracy
1.0%
Better assay work cuts metal loss allowance and avoids overpaying on weak lots, which protects margin on every batch.
4
Metal Prices
$1.1K-$4.9K
Platinum, palladium, and rhodium prices can move recovered value fast, so metal swings can lift or cut cash without any change in volume.
5
Settlement Terms
11%-8.2%
Refining, freight, and settlement terms shape the 11.0% to 8.2% variable-cost load and the cash gap between shipment and payment.
6
Fixed Overhead
$25.2K/mo
About $25.2K in monthly fixed costs means overhead, compliance, labor, and reserves decide how much revenue turns into take-home after the base is paid.
How do I check owner income in the financial model?
How many catalytic converters do you need to recycle to make a living?
For the Catalytic Converter Recycling Service, you can’t calculate the converter count from the data given because monthly converter purchases, purchase cost, and settlement value per converter are missing. The quick planning formula is target monthly owner draw + overhead divided by net contribution per converter after purchase cost, refining deductions, freight, labor, and reserve. Fixed costs are $252k per month, plus a $140k annual GM role if staffed, which is about $11.7k per month.
Missing inputs
Converter count is not calculable.
Need monthly units bought.
Need purchase cost per unit.
Need settlement value per unit.
Planning formula
Owner draw + overhead is the numerator.
Use net contribution per converter as the divisor.
Add $252k monthly fixed costs.
Add $11.7k monthly GM cost if staffed.
How much money can you make recycling catalytic converters?
You can’t price owner take-home from top-line sales; for a Catalytic Converter Recycling Service, the model shows $1.460M of Year 1 room before converter purchases, taxes, debt, reserves, and missing mature payroll. For the KPI side of that spread, see What 5 KPIs Should Catalytic Converter Recycling Service Business Track? because legal sourcing, grading accuracy, processor terms, and cash discipline decide what owners actually keep.
Year 1 math
Revenue: $4.745M
Known costs: $3.285M
Pre-exclusion room: $1.460M
Take-home: lower after reserves
Year 5 math
Revenue: $19.075M
Known costs: $15.177M
Pre-exclusion room: $3.898M
Profit depends on purchase spread
What is the profit margin on catalytic converter recycling?
Year 1, the known numbers point to a strong margin: $4,745M in revenue minus $1,017M in direct and variable costs leaves $3,728M, or a 78.6% gross margin. After $3.024M in fixed overhead and $140k in GM payroll, the known-cost operating margin is still about 78.5%; see What Are Operating Costs For Catalytic Converter Recycling Service? for the cost stack. That is not net margin, though, because converter purchase costs, reserves, taxes, debt, and unprovided payroll are still out.
Margin math
$4,745M revenue
$1,017M direct costs
$3,728M gross profit
78.6% gross margin
What moves it
$3.024M fixed overhead
$140k GM payroll
PGM content changes payouts
Assay and freight change margin
Key Takeaways
More verified volume lifts profit only if pricing holds.
Buying below recoverable value protects the spread.
Better grading cuts overpaying and loss-making lots.
Fixed overhead and reserves come before owner draws.
Scenario objective: compare low, base, and high owner-income planning cases
Owner income scenarios
Owner income rises as recovered metal output and pricing improve, while fixed overhead and variable haul and processing costs keep the model sensitive to scale. Purchase costs and taxes sit outside this view.
Low, base, and high owner-income views by operating year.
Scenario
Low CaseTough
Base CaseModerate
High CaseAggressive
Launch model
Year 1 is the lower-income path.
Year 3 is the modeled middle path.
Year 5 is the stronger earnings path.
Typical setup
Year 1 starts with $4.745M revenue, about $3.285M of operating pool, a 69.2% gross margin before converter purchases and reserves, $25.2k of monthly fixed overhead, and 11.0% variable expenses.
Year 3 lifts revenue to $10.653M, the operating pool to about $8.108M, gross margin to 76.1%, fixed overhead stays at $25.2k monthly, and variable expenses ease to 9.6%.
Year 5 reaches $19.075M revenue and about $15.177M of operating pool, with a 79.5% gross margin, $25.2k monthly fixed overhead, and 8.2% variable expenses.
Cost drivers
Metal yield
pickup density
fixed payroll
compliance fees
reserve holdback
Converter volume
metal mix
logistics efficiency
wage growth
reserve holdback
Higher throughput
stronger metal prices
larger team
lower unit logistics
reserve holdback
Owner income rangeBefore owner reserves
$3.285MLow Case
$8.108MBase Case
$15.177MHigh Case
Best fit
Use this to test a slower supply build and tighter cash control.
Fits a normal ramp with steady converter flow and stable processing.
Fits a strong sourcing network and a team that can scale fast.
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Planning note: Scenario ranges are researched planning assumptions, not guaranteed earnings, salary promises, tax advice, or distributions. Purchase costs and taxes are excluded.
Catalytic Converter Recycling Service Core Six Income Drivers
Legal Converter Acquisition Volume
Legal Converter Acquisition Volume
More verified converter volume from repair shops, fleets, auctions, and scrap suppliers can lift gross profit only if buy prices stay disciplined. The model moves from 1,200 refined platinum units, 1,500 palladium units, and 300 rhodium units in Year 1 to 4,000, 5,000, and 1,100 in Year 5, so scale is real. But each extra unit also ties up cash in inventory and delays settlement.
Owner pay improves only after purchase cost, 6% revenue-based processing costs, compliance, labor, and reserves. With fixed costs at $252k/month and GM payroll at $140k a year, acquisition volume must clear the cash drag from storage and the risk of slow payment. Settlement-side prices of $1,100, $1,200, and $4,500 in Year 1 set the ceiling for what good volume is worth.
Track Source Mix and Settlement Speed
Measure units by source, buy price, and days to settlement. Split repair shops, fleets, auctions, and scrap suppliers so you can see which channel brings verifiable volume without raising loss risk. The right lot adds income only when its expected settlement value beats the purchase price and the cash sits for fewer days.
Count units by supplier type.
Flag weak records before buying.
Set reserves before owner draws.
Test faster settlement terms.
Overhead, Compliance, Labor, And Reserves
Overhead, Compliance, Labor, And Reserves
Owner pay comes from what’s left after fixed costs, not from gross metal sales. The listed monthly overhead items add to $144k for lease, environmental monitoring, security, insurance, maintenance, and software, and general manager payroll adds $140k/year or about $11.7k/month. The brief also says fixed expenses total $252k/month, so the overhead schedule needs a clean reconciliation before any draw.
Reserves are not provided, so they should be an editable line in the model. Cash should cover legal compliance, insurance, recordkeeping, and security before owner distributions. If reserves are too thin, a late settlement, claim, or compliance issue can wipe out the month’s profit and push owner take-home into a cash squeeze.
Protect owner pay with fixed-cost control
Track overhead as a monthly burn rate, then tie owner draws to a minimum cash floor. Here’s the quick math: if fixed cost run rate rises by $10k/month, that cuts annual owner cash by $120k before tax. Keep reserve funding separate from operating cash so compliance spend doesn’t get starved when volume slows.
Build a payout rule that releases cash only after month-end close, required filings, and reserve funding. That keeps draw decisions tied to real cash, not hoped-for profit. If settlement timing slips or security and insurance renew higher than planned, pause distributions first, not compliance spend.
Track monthly burn against budget.
Set reserve floor before owner draws.
Review insurance and security renewals early.
Separate compliance spend from growth spend.
Catalytic Converter Buying Spread
Catalytic Converter Buying Spread
The buying spread is the gap between expected settlement value and purchase cost plus selling deductions. It drives gross margin and owner pay because every extra dollar paid to buy a converter comes straight out of recoverable value. In Year 1, settlement-side prices include $1,100 for platinum, $1,200 for palladium, and $4,500 for rhodium, so overpaying or taking heavy deductions can wipe out profit fast.
Use the spread as a risk check, not fixed profit. If grades are wrong, the business buys too high; if processor deductions rise, net cash falls after settlement. The owner earns more when purchases stay below recoverable value while still paying legal suppliers competitively. Here’s the quick math: spread = settlement value - purchase cost - deductions.
How to protect the spread
Track three inputs on every lot: assay or grade, purchase price, and processor deductions. If you do not log all three, you cannot see where margin leaks out. Keep settlement sheets by supplier, then compare realized net value against what you paid so you can catch overpaying and undergrading before it hits owner draw.
Test low, base, and high grades.
Review deductions on every settlement.
Block bids below target spread.
Pay faster only for verified lots.
The key risk is buying inventory at one expected value and settling at another. Even a strong metal price does not help if the lot was misgraded or the refiner keeps too much. Better controls improve cash flow, keep supplier terms clean, and leave more distributable profit for the owner.
Grading And Assay Accuracy
Grading And Assay Accuracy
Assay accuracy sets the buy price. Catalytic converter value comes from platinum, palladium, and rhodium, but exact yield is not known until assay or processor settlement. Better grading cuts overpaying on weak lots and missing value on strong ones, so gross margin improves before metal is sold.
Here’s the quick math: assay testing services rise from 500 units at $250 in Year 1 to 2,500 units at $290 in Year 5. That is $125,000 to $725,000 in assay revenue, before $21 per unit cost and 6% revenue deductions. Weak grading still burns cash if purchase pricing is loose.
Tighten Grade Checks
Track lot-level grade against settlement, not just total units. The inputs that matter are converter count, grade mix, assay cost, deduction rate, and realized metal value. If your regrade rate falls and purchase price stays close to assay, owner pay rises because fewer lots settle below cost.
Compare buy price to settlement weekly.
Flag thin-metal lots before purchase.
Double-check high-value units.
Track error rate by supplier.
At $21 per assay unit plus 6% deductions, small grading mistakes can wipe out margin on low-content lots. Tighter grading protects cash flow, reduces loss-making inventory, and leaves more profit available for owner draws.
PGM Price Volatility
PGM Price Volatility
Platinum-group metals (PGMs) drive the payout on each converter, so small price moves can change revenue, margin, and owner draw. In the model, refined platinum rises from $1,100 to $1,300, palladium from $1,200 to $1,400, and rhodium from $4,500 to $4,900; inventory bought at one expected value can settle later at a different one.
The key inputs are purchase date, settlement date, metal mix, and the spread between buy price and final settlement. If prices fall before settlement, gross profit drops and cash for owner distributions gets tighter. If prices rise, the opposite happens, but only after the lot is sold and cash clears. This is planning logic, not investment advice.
Test settlement downside before paying yourself
Run sensitivity on lower settlement values first, then set the distribution rule from the downside case. Use the same lot counts and price deck, but haircut the final metal price to see how much cash still covers freight, refining, labor, and compliance.
Track buy date and settle date.
Reprice lots before owner draws.
Separate inventory cost from cash value.
Stress-test platinum, palladium, rhodium.
Here’s the quick math: if you buy on one expected value and settle after a move, the spread is what protects take-home pay. That spread is not fixed profit, so distributions should wait until metal is sold and deductions are known.
Refining, Freight, And Settlement Terms
Refining, Freight, and Settlement Terms
This driver is the gap between recovered metal value and what it costs to move, refine, and settle each converter lot. The 6% revenue-based bucket covers refining royalties, hedging fees, environmental compliance, smelting energy, and metal loss allowance. When those fees are clear and freight is tight, more of each settled dollar reaches owner pay.
Here’s the quick math: variable logistics and procurement costs start at 110% of revenue in Year 1 and fall to 82% by Year 5, so total variable outflow is about 116% to 88% of revenue before fixed overhead. Faster processor settlement lowers working capital pressure, so cash comes back sooner and owner draws are less exposed.
Track Deductions and Cash Lag
Measure each lot by revenue, freight cost, deduction %, and settlement days. If processor deductions move above the stated 6% bucket or freight rises with longer routes, margin gets squeezed fast. Faster payment matters too: short lag means less cash tied up, so owner pay can follow real cash, not paper profit.
Freight per lot against lot revenue.
Settlement days from receipt to cash.
Total deductions held near 6%.
Procurement cost trending below 110%.
Build pricing and dispatch rules around landed cost per lot, then test whether route density, cleaner lot sorting, or tighter processor terms push the Year 5 cost path toward 82%. If settlement slips, hold owner draws until cash cover improves.
