Scrap metal businesses have a significant market because recycled and scrap metal is cheaper than pure metals, therefore a range of businesses can benefit from buying these raw materials at a cheaper price. If you’re thinking of starting a scrap metal businesses, experience and knowledge are essential as you’ll be involved in a lot of bargaining – you’ll need to ensure the price is fair when both buying and selling product.

Scrap metal businesses have a significant market because recycled and scrap metal is cheaper than pure metals, therefore a range of businesses can benefit from buying these raw materials at a cheaper price. If you’re thinking of starting a scrap metal businesses, experience and knowledge are essential as you’ll be involved in a lot of bargaining – you’ll need to ensure the price is fair when both buying and selling product.

Accumulating raw materials

To run a scrap metal yard, you’ll need the raw materials to sell. Scrap metal comes in a range of different ways so you need to know exactly what’s valuable and what’s not. Building supplies, discarded car parts – these are just two of the potential sources you should be looking into. Some will need to be bought, some will be given for free, and some will need to be salvaged.

Creating a holding area

You’ll also need premises; bear in mind that good access is essential as many people will come in larger vehicles, particularly if they’re looking to buy in bulk. If you want to allow potential customers to come and browse what you have, the holding area will need to be large, and easily negotiable. Some scrap yards do not allow browsing, but those that do often also ask customers to extract the materials themselves (using their own tools, most of the time, and having waived liability for any injuries sustained).

To make your material more attractive to prospective buyers you may want to segregate high-value metal into piles – these piles will be made of the same type of metal, or from the same source, or some other important characteristic. Buyers will then bid on these piles, with the highest bidder ‘winning’ the pile.

Smelting

To increase the number of revenue streams, some scrap metal businesses sell high-value items to buyers and then the rest to smelting companies – this makes lower-quality metal lucrative and increases the amount of material that can be collected.