Scrap Metal Recycling Business Ideas: How to Start a Scrap Metal Recycling Business

It costs about $4000-$40,000 to a start scrap metal business venture.  The disparity in price depends on the scope of your operation, physical assets and working capital.

 The job is location based, does not accommodate franchising and has some online applications. Scarp metal is all about recycling different metals or just one kind.

The job requires a large parcel of land to accommodate your goods and the price fluctuates according to demand and supply. The enterprise is very lucrative and has a very simple format. You source the metal then supply to a recycling company and collect hard cash.

There is a steady market for the commodity and different metal attract different prices. The commodity hardly decomposes easy so by recycling it you are performing an environment and community service. You make lots of money while saving our planet how cool is that?

The Many Advantages of Scrap Metal Business

The major advantage is the ability to generate income while doing the job part-time or full time. You also own a viable venture and are self employed.

Another nice fact is the steady demand for the commodity. You know you’ve found a good business venture when the demand outweighs the supply.

Another plus is that startup costs are moderate and easy to source. In my location we see lots of youths pushing iron carts buying scrap metal from residential homes.

Although this is the most basic and simplistic form of the business it works. The metal has a huge market and the commodity retains most of its value.

Unlike the manufacturing process which is capital intensive difficult and time consuming? Scrap business need less capital depending on the sector you favor.

You can concentrate on sourcing and supply aspect or owning a recycle plant. Supplies depend on the amount you invest in sourcing the metal.

While recycling plants require huge landed space and scrapping equipment. Recycling plants are either general purpose or focused on one or two metal.

 Countries are getting more eco-friendly passing new laws guiding the disposal of used metal.

The scrap dealer is highly favored in this category due to tax exemptions and favorable laws. The major advantage is contributing your bit to save the environment.

Know your Scrap

There are different kinds of metal some more pricey than others. Some common metals are nickel, gold, silver, aluminum, lead, brass and copper.

Metals hold their value after recycling and are recycled over and over again. Majority of scarp recycled are stainless steel, copper, iron, aluminum and lead.

Lead

Lead is an important scrap metal found in batteries, medical equipment and building materials. The commodity is very harmful to the environment it contaminates water and causes different ailments in our body. The recycled lead is used for new battery cells and other medical applications.

Aluminum

This metal is very valuable and the recycled material is used to make cans, containers and building materials. Recycling the commodity reduces harmful emissions, saves energy and protects the environment.

Recycled aluminum is used in many industrial applications reducing product costs.

Copper

Copper is a very valuable metal to recycle. You can get new products like electrical wires, building materials, pipes and costume jewelry.

Like other metals copper retains its value after recycling. The commodity is the most valuable among its peers retaining an astounding 95% value after recycling.

Steel

Steel alloy is recycled no matter the equipment or hardware the metal is found.  It has numerous applications in the automobile industry, basic household items and construction sites.

Recycling allows cheaper steel for manufacturers and reduces costs for consumers.

Typical scrap Objects

Typical scrap objects are materials such as old refrigerators, piping, copper wire, rusty tubes, aluminum sidings, and brass fixtures. Others are automobile engines, battery filaments, old machines and old gas cookers.

Don’t forget that scrap prices fluctuate daily so learn the trade and understand the business.

Also see: steel fabrication business ideas

Decide on your Business Structure

You need to decide if you want to go into recycling supplies or owning a plant. The next consideration is if your plant handles general metal or focuses on a specific metal.

A recycling plant is expensive so you need lots of money to start the business. Start with basic equipment and slowly build inventory as the business progresses.

Local Restrictions

Find out the local restriction and government laws. The job is hazardous and has lots of safety standards and government legislation. It is good to register with an association to get support and insider information.

Feasibility Study

You need a feasibility study of your area before delving into the enterprise. The study should identify potential sources for the metal and operational costs.

You need a truck or bus to transport your goods. What types of metals are currently recycled in your area? Other things are finding a good location for your scrap.

Study your competitors and what they are doing right or wrong. Learn which commodity attracts the best price and volume handled daily.

Business Plan

Let your business plan take care of legal, finance, company structure and future growth. The plan should include marketing strategy, management, license and permits.  

 How to Start your Scrap Business

The first step is registering your venture and learning the basics. Source adequate capital and find a good location.

Find your customers and supply your merchandise to scrap plants. You need a strong vehicle to carry your supplies. Handling scrap metal is dangerous so you need proper protective gear like gloves and goggles.

Ferrous and Non Ferrous Metal

Non ferrous metal include elements like aluminum, brass, copper, alloys and magnesium. Non ferrous metal are more valuable than ferrous metal so salvaging them adds to your profit.

Modern high tech machinery identifies different kinds of metal and complex technology to separate non ferrous metals.

Ferrous metals contain iron and are magnetic easily attracted by powerful magnets. Common equipment used for this procedure is the electromagnets.

Some plants use eddy current to drop and separate aluminum. Recovering precious metals like gold, silver, lead and copper makes this process economically viable.

Others use high tech sensors and x-ray equipment. A slurry mix is then applied to further sort the metals.

Metal Recycling Machinery

There are a number of equipments used to process metal. Some are cable strippers, shear balers, material loader, car de-pollution system and un-loaders.

Other equipment is metal analyzers cable granulators, metal balers, alligator shears and ingot casting.

The scrap plant owner needs to decide to buy either new or used scrap equipment. No matter your choice buying quality equipment will be beneficial in the long run.

Good equipment maximizes your profit and credibility. Scrap metal recycling business is lucrative but requires adequate planning and finance to succeed.