The Magnetic Computer Tape Story

1965

A true story about doing business with the wrong kinds of people

Written 1/2010 and Re-written 02/12/2016 * 1,889 Words

#108 By Howard Yasgar

Over the years, there have been many unfortunate business lessons that I have learned, and this story is about one of them.

It is a lesson I learned early on, it taught me that not every deal is a good one, and not everyone is a nice person to deal with.

I always knew that for a business deal to be successful all parties need to be happy with the results.

However sometimes things don’t work out like they are supposed to. This was one of those situations.

In 1965, I was twenty-six years old and a junior partner in an automotive parts rebuilding company in Hialeah Florida.

I had bought into the company in late 1963, and by 1965, I was on the road calling on customers from Miami, all the way down to the city of Homestead.

My Partner’s had a son named Don, and Don covered our sales in the local Miami area.

Sometimes, to make an extra buck, Don and I would buy something together and then share a booth at a flea market to sell it, we did that usually on the weekends.

Don’s dad Dave, who owned the company, didn’t mind if we made extra money on the weekends, as long as it didn’t conflict with our normal business duties.

So, every Wednesday, I would make a sales trip calling on all the auto parts stores heading South along US 1 from Miami.

Once I reached the city of Homestead, I always stopped in to see a junk dealer, who had a scrap yard right outside of Homestead Air force Base.

I stopped to see him for several reasons. One was because he had a contract with the Air force called a “Term sale”, which meant he bought all the scrap off the Homestead Air force Base, for a whole year, for only 2 cents a pound.

Sometimes the scrap he bought had good starters and generators that I could buy from him.

Another reason that I always stopped to see him was because he was buying all the scrap off the Air Force Base, so I never knew what interesting junk he would get in, it

It was always fun just to walk around his place just to see what he had.

Usually, every week when I stopped by, he already had a pile of used starters and generators waiting for me, which I would always buy.

The only problem I had was with the junk dealer, he was a problematic kind of guy, he always had a sour disposition, and he was never satisfied with the prices that I paid him.

I had been buying from him for several years, and every week it was always the same routine, he made me negotiate with him, and he was always pushing me for more money.

I always paid him a fair market price so it was distasteful doing business with him.

One day I drove into his yard, and it was filled with stacks of magnetic computer tapes.

Each box was about 2 feet square and about 1-1/2inches thick.

Inside each box there was an aluminum reel filled with hundreds of feet of magnetic computer tape on it.

All the boxes were from companies like IBM, and 3M.

It appeared that Homestead Air Force Base had just converted their old reel to reel computer tapes over to the more modern floppy discs.

So, apparently the Air Force had erased all the reels of magnetic tapes and then threw them in the trash for the junkman to pick up.

The owner of the junk yard saw me looking at them and came over to see me.

I asked him what he was going to do with all the computer reels, and he said he was getting ready to haul them all to the dump.

He said that by the time he took all the aluminum reels out of their boxes and then tried to get the magnetic tape off them, it would cost him more than the aluminum reels were worth in scrap.

He said that he had over 2500 boxes of magnetic tapes, and according to him, hauling the magnetic tapes to the dump was a losing proposition for him.

He said he would have to bring them all to the city dump and pay to dump them.

I told him not to be too hasty throwing the magnetic tapes into the dump.

I told him, let me take a sample and perhaps I could sell the tapes to someone.

In the back of my mind, I remembered seeing similar aluminum reels many years ago at a surplus dealer’s warehouse in New York City.

So, when I got home, I dug around and found the business card of the company in New York, and I called them up.

They said they were very happy to hear from me, and yes they always bought magnetic tapes on aluminum reels.

I think that they were very excited to hear that I had 2500 pieces available and they asked if I could send them a sample, and I said I would send them a sample by express mail the next day, which I did.

About a week later I received a letter from them in the mail with a purchase order in it.

that they could buy all two thousand five hundred of the reels @ $1.00 ea. I was so excited that I could hardly talk.

I went to work, and I told my partner Don about the deal.

If he helped me ship the tapes we could share in the profit equally, he was just as excited as I was.

So, that very afternoon, we both drove down to Homestead together to see the junk yard owner.

Once we were there, I proudly took out the purchase order from New York and I showed it to him.

He read clearly that we had an offer of $1.00 each, so I said I could pay him fifty cents each, and my partner Don and I would pay for the packaging and cost of shipping to New York.

After he closely studied the purchase order again, then the surplus dealer asked me, “How do you know they will pay you?” Well, I said, I had done business with them in the past and I never had a problem with them, they always had appeared to be honest.

O K, he said, “How do you guys want to do it”.

Well, I said, my partner Don and I need to rent a U haul trailer and bring all the tapes to Miami where we can box them up.

Then we need to call a freight company to come and pick them up to ship them to New York.

The junk dealer said, “I think you should pay me more”. I explained that the U haul trailer and the packing and the freight to New York, left Don and myself only a very little profit.

What I was really thinking was, here, this bum had gotten the stuff for almost free, and it was going to cost him hundreds of dollars to take it to the dump.

The next day, Don and I rented a U-Haul trailer and we made two trips to the Homestead junk yard to pick up the tapes.

We then strapped each box with metal banding.

It was summer, and it was very hot, but we finally had all the magnetic tapes packed up.

I then called a local Miami trucker called Southern Transport, and they said they would haul the whole lot of tapes to New York for $300.00. So, the next day they came to pick the stuff up, but somehow they had forgotten to send a truck with a lift gate, so Don and I had to load the entire shipment by hand.

At this point we both agreed that the profit we would earn wasn’t enough to cover the costs and all the labor.

The next day I called the buyers in New York to tell them that the shipment was on its way, and I asked them how long it would take them to pay us the $2500.00.

There was silence on the other end of the phone, finally he said, $2500.00, where did you get that figure from?

From your purchase order, I replied. I have it right here, you offered us $1.00 each. “No, we didn’t he said, we offered you 10 cents each”.

I said that it’s impossible for you to offer us 10 cents each when the freight alone to send to you in New York costs more than 10 cents.

I looked at the purchase order again and I saw they had written $ .100 ea.

I said that you purposely wrote it on your purchase order to look like $1.00 ea.

Well, that’s your problem the fellow in New York said to me.

I hung up the phone, and when my heart stopped pounding, I immediately called the trucking company, and the dispatcher said, I was in luck, the shipment was only in Atlanta Georgia, and they can turn it around, and return it for a cost of about $100.00.

As I had no alternative, I had them return it all to us.

The next day the truck arrived in Miami and Don and I unloaded it.

But this time Don rented a much larger and much more expensive U haul truck. And we drove the entire load of tapes back down to the Homestead junk yard.

Once we were there, I explained to the junk yard guy what had happened, and I took out the purchase order from New York, and we all looked at it again. He agreed that it looked like they would pay $1.00 ea.

I told him that I was sorry, but Don and I were out the cost of the freight to Atlanta, also the cost of all the U haul trucks, not to mention the packaging labor we had in it.

I said, now, now that we had all the tapes on the U haul truck, did he want us to take them to the dump for him for free, and I even offered to pay the dumping fee.

I told him I felt bad about the situation and even though Don and I had lost quite a bit of money, I would pay for dumping the stuff at the dump, which I knew was his intention in the first place.

He said, “No leave it all here, I can dump it after you give me the $1250.00.” you owe me.

Don and I unloaded the U Haul truck, we did it by hand again, and I again apologized to the junk yard guy.

I said, look Don and I already have lost way over $500.00. I’m sorry for what happened, but I don’t intend to lose any more money. Especially since you really didn’t lose anything, so let’s all shake hands and remain friends, but he didn’t want to, and needless to say I never went to see him again.

It was the worst mistake that I had made back then in 1965, and I am sure I learned something. However, to be honest, I think I may have made some worse mistakes since then.