Only one shop can sort through one type of item: cloth, metal, plastic, electronics. Meaning you have to plop down 4 to get all four at once. So my idea is, instead of having to waste space with 4 shops, why not make it an upgrade?

First upgrade allows for two items and two workers and upgrade 2 allows for 3 and so on... make the upgrade cost half as much as a separate building.

The Recycler is a building, that you will need and build at the start of the game. If you continue playing, you will build the refinery, which is "an upgrade" of the recycler, more or less. :)