How to Start a Scrap Metal Business

The scrap metal industry is what many people refer to as a recession proof business. Scrap yards thrive through the good and bad, because they always make a certain amount on the metals no matter what the price is. This is called the mark-up. Your mark-up must be high enough to make a profitable living, but small enough so that you can stay competitive with the competition. Now day’s people know that their metal is worth something. Some may not know exactly what, but if you give an honest price to each customer you will continue to do business with them.

Step 1: Learn to identify all different types of ferrous and non-ferrous metals. You have to know exactly what it is that you’re buying from your customers because different metals have different values. Note: There is a big difference in price in “clean” vs. “dirty” non-ferrous metals. The reason non-ferrous metals fall into the “dirty” category is because they have other metals mixed in. For example, you might have a piece of copper pipe with a steel fitting or steel bolts attached to it. You must get the steel removed from the tubing before that piece of copper can be sold as “clean.” This is very important for you to remember so that you don’t pay too much for your metals. Buy a small magnet to determine the difference between ferrous and non-ferrous scrap metal. Ferrous metals such as Iron will stick to a magnet.
Step 2: Locate and map out metal refineries and large industrial scrap yards in your area. Find out what each place will pay for your different metals. Calculate how much it will cost you in travel time/fuel to get to each of these places and find out which ones will be most profitable to you. Time is money, just like fuel.

Step 3: Once you’ve gotten a price for what the metals will bring you, determine how much you are willing to pay so that you can be profitable. The more you’re able to pay, the more business you will do. Keep in mind your travel time/cost. The more time you can spend buying, the better.

Step 4: Now that you’ve decided who to sell to and how much to pay, you’ve gotta go out and hustle the metals. There are various ways to acquire the metals. It really just depends on how much capital you are working with. Obviously larger amounts of money to gamble with make it easier to get your name out, but I’ll start with the cost affective methods.

First post an ad on Craigslist in your area telling everyone that you buy scrap metal. Craigslist is great because you can post ads like this at no cost.

Second get some business cards made. You can get these really cheap with companies such as overnightprints.com. Be sure to put your business name, phone number and website if you have one.

Third if you don’t have a website I highly recommend one. You can do a ton of online advertising for very little cost with a website. Everyone gets on Google these days to find what they’re looking for. You can use Google cost per click services to make you pop up or you can use SEO services. I recommend SEO, because you’ll pop up as a natural listing instead of an advertisement.
I recommend for the more capable investor a roll-off truck with at least 5-10 roll-off dumpsters. You will need these for separating your different types of metals and to set down at companies that you may acquire in your new venture. The more metal you can move, the more money you can make.

This is the basics of starting a scrap metal service. The more time you spend in the industry the more you will learn and the more money you will make.

For examples of different metals and current market pricing visit

Good luck!

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