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How to Make Money in Scrap Metal Yard

Scrap metal yard: Metal recycling and scrapping is a lucrative business for many, especially in tough economic times. While it’s a dirty and possibly dangerous job, high metal prices can dictate large financial returns.  A scrapping business can end up making money in two major ways: Some people will pay you to haul away junk which you can then break down and sell to buyers. Find out how to start a scrap metal business to decide if it can be a wise investment of time and resources.

See also: How to Make Money on Western Metal Recycling Business

Scrap metal yard

Be able to identify and sort different metals. Buyers will be purchasing specific metals by the pound. You will need to accurately identify your scrap for sale. To do this, first use a magnet to check the metal’s ferromagnetism (whether or not the magnet sticks). Weigh this information with the metal’s appearance, weight, and item of origin. There are five major metals that will likely make up the bulk of your scrap.

  • Iron and its alloy steel have many uses and are probably the most common metal you’ll be scrapping. Iron is ferromagnetic, strong, and lighter than most other metals except for aluminium. While normally different shades of gray, it rusts into a reddish brown.
  • Aluminium is non-ferromagnetic and very light. Like iron, it is ubiquitous.
  • Pure copper is slightly pink, while lower grades are a reddish brown. It tarnishes into a jade green color. Copper is non-ferromagnetic and slightly heavier than iron. You’ll find copper in wiring and quality cookware.
  • Bronze is an alloy of copper but is worth significantly less.

    Scrap metal yard

  • It is a much lighter, almost gold colour. It is commonly found in instruments, decorations, and pipe valves.
  • Lead is extremely soft and heavy. It is typically used to make bullets and as radiation shielding. Keep in mind that lead is extremely toxic, so use protection when handling anything you suspect to contain it.
  • Keep in mind that within these basic categories there are also many different grades with their own properties. For example, most stainless steel is non-ferromagnetic. Additionally, you will probably come across rarer valuable metals if you scrap electronics. Study these before starting your business.

See also: How to Manage A Successful Scrap Metal Recycling Business

Learn how to disassemble objects for scrap. In order to sort your scrap, you will likely need to break down larger items into smaller component parts. Some objects can be taken apart easily with simple tools, while others will require a blow torch or a metal saw. The item type will determine exactly what steps you will need to take. Look up information online before scrapping something you haven’t worked with before.

  • While many buyers will purchase wiring as-is, some scrappers choose to strip it themselves to get the full copper value. Figure out if the difference in price is more than the cost of your time and labour. Stripping wire may be worthwhile when you’re first starting your business, but less important later on.

    Read on: How to Make Scrap Metal Business more Profitable

    Scrap metal yard

Keep track of metal prices. Check metal prices regularly to be aware of what to charge and what to pay for scrap. To do this, simply use the Internet to search for “commodity trading prices.” Be sure to ask local contacts in case your area sells at a different rate. It may be a good idea to offer a fixed rate when buying scrap while asking buyers for close to the market rate when selling.

Purchase or rent a vehicle for your business. Pick a truck or van that is large enough to transport large amounts of scrap metal. If your business focuses on scrapping smaller high tech items, you may be able to use a personal sedan instead.

  • Protect the inside of your vehicle from possible damage or staining.
  • If renting, make sure the rental company allows for commercial use of the vehicle.
  • Cut down operating costs by choosing a vehicle with good fuel efficiency.

    See also: How to find the best metal scrap yard near me

    Scrap metal yard

Set up an area for your scrap. You will need a place to sort, disassemble, and store your scrap metal. Depending on how much and what type of items you plan to collect, this could be as small as a storage unit or trailer. If you want a large yard, you’ll have to lease or purchase an open space. Either space must be secure to prevent theft and possible liability in the event of an injured trespasser.

Read on: How to Open Metal Recycling Business

Invest in protective gear. Dealing with scrap metal can be dangerous and may subject you to cuts, tetanus, blunt trauma from falling objects, and even possible radioactive or otherwise hazardous waste.

  • Hardhats should be worn when hauling bulky items or when near stacked metal.
  • Wear thick spill-resistant gloves and boots when working with scrap.
  • Respirators are necessary if hazardous particulates, such as asbestos, may be present.
  • Wear welding goggles when cutting metal.

    Scrap metal yard

     

See also: How to Get High Demands for Scrap Metal Business

More tips

  • Make sure you have the capital to cover startup costs and can bear the economic burden if your business isn’t a success. The average startup costs for a new scrap metal business range from $2000 to $10000. Keep in mind you are also investing your time and potential income.

  • Save on gas by planning out a regular scrapping route instead of hitting up individual locations one at a time.

  • Don’t start a scrap metal business if your local market is already saturated with other salvagers.

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