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mr_chook
New Member
9 Posts |
 Posted - 04/14/2010 : 07:14:37
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Hello, I'm new to all this scrap metal business, i wanna open a scrap yard but i only know a bit about scrap metal business, can any of you guys give me some tips or advice on opening a scrap yard
thanks heaps
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Edited by - mr_chook on 04/14/2010 07:21:44 |
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Kurr
1000+ Penny Miser Member
2906 Posts |
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FormerHSPrincipal
Penny Sorter Member
USA
37 Posts |
Posted - 04/14/2010 : 14:55:40
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With all due respect ...
Sometimes it is far far better to test the waters rather than to jump right in ... Especially if one does not know what dangers lie beneath the surface.
Now having said that. Since you acknowledge not knowing much about the business, would it be wiser if you perhaps somehow began working in a yard to learn the basics and learn potential pitfalls. Lessons learned in the business world can be quite costly.
If your sole interest is to own a business and that business must be a salvage yard, I would suggest buying one before starting one. The start-up costs would be cost prohibitive unless you have very deep pockets and a life time to pay it off. The cost of crushers and lifts will shock you unless you have a background in machinery ... And then they will still shock you!
For what it is worth ...
Respectfully, |
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hobo finds
Penny Hoarding Member
838 Posts |
Posted - 04/14/2010 : 15:11:52
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| If you could start one what would be a better location by a rail line or freeway? What would be cheeper to move the stuff by train or truck? |
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Kurr
1000+ Penny Miser Member
2906 Posts |
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hobo finds
Penny Hoarding Member
838 Posts |
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wolvesdad
1000+ Penny Miser Member
USA
2164 Posts |
Posted - 04/15/2010 : 03:35:21
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You better already have business experience for you to even consider jumping into a business that you know little about.
And, are you ready to deal with thieves? Are you going to turn your back to them trying to pass their booty off on you? Or are you ready to turn them in to the proper authorities? Copper theft is a serious problem, and you will run into it if you have a scrap yard. |
"May your percentages ever increase!" |
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mr_chook
New Member
9 Posts |
Posted - 04/15/2010 : 03:48:44
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Gees... lucky i ask this question before i open a scrap metal business,
i was just gonna open a small scrap metal business with a forklift, a truck and a few bins, i was gonna buy and resell the scrap metal to bigger scrap metal recyclers.
i am located Australia and the law in my country is not that tough on scrap metal, i don't need a license to open a scrap metal business but the land i open the scrap has to be approve by the local council.
i haven't started looking for a job in the scrap metal industry yet but i will soon, any special requirement for me to prepare to find a job in the scrap metal industry.
thanks |
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PennySaved
1000+ Penny Miser Member
USA
1720 Posts |
Posted - 04/15/2010 : 05:01:32
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I think you are better off being the middle man than actually owning the yard.
Wouldn't having a truck and finding the scrap to turn in be better than owning the yard? |
SELLING COPPER PENNIES 1.4X FACE SHIPPED......“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale” Thomas Jefferson |
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mr_chook
New Member
9 Posts |
Posted - 04/15/2010 : 05:31:48
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| i would wanna turn the scrap metal business into a metal recycling business in the further after i get everything setup up, i would buy compactor, sheeders and so on,yeh having a truck and goin around n buying scrap from other business is ok, but i rather open a scarp yard and let those ppl sell to me and i make abit on top then i be happy because its alot of running around with the truck |
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silversaddle1
Penny Pincher Member
USA
103 Posts |
Posted - 04/15/2010 : 05:48:50
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Now slow down here guys. He states that he wants to purchase from the public and resell to bigger yard. This can and does work and is not a nightmare to operate. Your best bet would to just deal in non-ferrous stuff at first. If the big yard is at the east end of town, set up on the west end. Work on a margin. If you are going to get $3.00 for copper from the yard you sell to, you buy it for 15-25 cents below that. Sell what you bought the day before first thing in the morning. When buying metals, pay in cash. A lot of people will sell their metals cheaper to avoid any checks/paper trail.
The advice about working in a scrap yard first is very good. Not only will you learn a ton in a short time, you will gain contacts in the business, and maybe even learn what kind of margins the big yards work on. |
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mr_chook
New Member
9 Posts |
Posted - 04/16/2010 : 08:45:21
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Thanks for all the advice and helps guys, just one last question what would i need to start off a basic scrap yard thanks ?
forklift, truck, some skip bins anything else you guys think i will need and is there any other web site that would help me learn more about scrap metal
thanks again guys |
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Kurr
1000+ Penny Miser Member
2906 Posts |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 04/16/2010 : 09:28:51
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Another thing to consider is security. Wolvesdad mentioned above that you have to be ready to deal with thieves. Without proper security the thieves will come shopping in the middle of the night at your yard.  |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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mr_chook
New Member
9 Posts |
Posted - 04/16/2010 : 18:00:58
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it cost too much to buy a scrap metal business in Austria it cost about $500k to $1 million for a established scrap metal business, i can't afford that much i only can get around $150k to $200k, i think it would cost only around $50k to start up a basic scrap yard, and if it goes good just build up from there what do you guys think?
can you guys give me just the basic thing that i would need to set up a scrap yard business ? |
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 04/16/2010 : 18:07:32
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You should definately network with some potential buyers, then find out how much product you can reasonably expect to move. You find out what it costs to move the product. You can then work the numbers backward to find out how small you can start and still turn a profit.
You basically need to start with a business plan before laying down the start-up bucks. |
Come to the new and improved realcent: http://realcent.org
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/16/2010 : 19:32:06
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It is actually a good idea. The biggest obstacle short of money is ordinances and whichever city you decide to set up shop. Not sure of your budget but it does take some capital (Minimum 50K for a bare bones operation), that aside I like it. If money is not in question buy a baler machine.
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Best place to start is to become a recycle center for the community. Keep the place clean and organized, reach out to contractors. Pay only for non ferrous metal, offer free dump for all other scrap. Run ads to buy cars and use the facility to chop them up for higher returns. If you choose to buy steel then you will need more equipment to move it all quickly. Again more capital.
Larger yards will buy your metals at a premium because of volume, that is not a problem.
This is a full time operation which requires a lot of knowledge, Start as small as possible.
If you have not been in the trade for long I would suggest simply going pro scrapper first to learn the game. There is more to it than just buying and selling.
I have seen small yards for sale that I would recommend before attempting to start from scratch. Much easier to take over than start anything. Still many pitfalls to watch out for just in a business transaction.
Nice Idea! Needs a lot of thought before muscle. |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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GA-Silver
Penny Pincher Member
USA
238 Posts |
Posted - 04/16/2010 : 21:59:10
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| Your neighbors are gonna love ya....... |
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mr_chook
New Member
9 Posts |
Posted - 04/17/2010 : 00:30:45
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Thanks cptindy for the very helpful advice, I've got about $150k Australian Dollar to start my business with, I've been trying to find a scrap yard business to buy but they cost too much, some of the business I've seen advertise for $500k and above, i can't afford that much to buy a business, that's why i decide to set up one instead of buying one,
i would start off with a scrap metal company and turn into a recycling company in the future if everything goes to plan, do you own a Scrap yard business your self ? |
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/17/2010 : 09:06:59
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No, I do Not own a yard! The following would be a general concept I have thought about based on real world experience in many businesses.
If I was to start as you wish from scratch, I would first find a location with an adequate building in which to dissect large amounts of metal. Now you have begun the "chase" as I call it, which is keeping up with expenses. I would focus on professional handling and proper resale to earn maximum profit.
All metal when arriving at a yard or which is intended to go to a yard has "parts". Understanding that "recycling" useful parts is more profitable than metal is the mentality that needs to become clear in your mind.
I would start by obtaining my own metal (from this point referred to as product).
A nice set of cutting torches would be a priority. As well as various cutting tools, a simple concrete saw does wonders to anything. (Slicing and Dicing)
Lets use cars as an example: As they sit you can take an auto to the yard for a tidy profit. If well prepared you can get 4X the amount by proper dissection. Removing all junk (non metal).
Exhaust systems, brake calipers, rotors, starters, Engine heads, Engine blocks, catalytic converters, ac compressors, glass, all these parts and others are "rebuilt" by specific companies and pay a premium well above scrap.
Electronics and controls are again another avenue for profit. Each component, is worth far more resold than scraped. Just try and replace any part on your car and you will see $$$.
One car is well worth 2-3 thousand dollars if completely utilized like the Native Americans would a Buffalo.
The actual skeleton you are left with is your operating cash. That is the money used for day to day operations and "paying the light bill".
With your starting capital I would not risk a complete investment in any way. If you did I would sadly say you would be Bankrupt within 6 months. Business is a mental game and chewing on to big of piece will cut any man down to size shortly. Give yourself the opportunity to feel short term success, in my opinion it is the stress that compounds and like a tightening noose.
I would buy only that which was necessary for operation and focus on fundamental understanding and network those that would utilize the "parts".
A website to inventory and sell wholesale stock maintained by someone knowledgeable. You would not have the time to deal with the small issues. A good executive or as I run things as a CO utilizes others and only hires those that can accomplish a task and make a decision. A good crew will analyze options and bring the results to you to make a decision.
The small things will add up as you go along but only invest as net profit can afford.
A front end loader with attachments.Also a hi-lo for indoors. Possibly a tow tow truck or flatbed with hydraulics.
A prep area, inside a large building with power and multiple bay entrances.
Multiple quarantined bins built from rock, as a landscape yard would use.
Multiple torches, Stationary cutting devices, smaller bins, carts, and cages.
A heavy duty truck with as much cargo space as you can afford.
Multiple trailers of varying sizes with walls and covers for hauling.
Just the basics will run 50K buying used and being careful. Do not invest more than that to begin, you will need labor and that alone will begin to eat up capital.
I would like to hear more of this if it begins to be reality. |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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silversaddle1
Penny Pincher Member
USA
103 Posts |
Posted - 04/17/2010 : 12:38:41
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| One must be very careful when deciding on the best way to scrap cars. You say the parts are worth more than scrap. True. But, is the labor cost worth the extra money you will make? Not on core values alone. At some point you will have to decide if you are a junkyard or a scrap metal recycler. |
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/17/2010 : 13:02:12
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I am a profit seeker!
Expeditious behavior is a must.
Core products are not that difficult and yes they are worth the effort. Each one of those items that are rebuilt, when sold to the re-builder will return more than a yard will give.
Where do you think all those rebuilt starters and such come from? Not from returns alone. They buy in bulk from yards which is where they (scrapyards) sell them to make a profit.
Yards are the source, the bottom of the chain, anytime you cut out a middle man you gain additional profit margin.
Junkyard or scrap metal recycle? I'm confused? Ultimately are they not one and the same? Only traveling different routes to profit?
Why not utilize a small team to maximize?
It is my nature to be thorough and utilize everything. Balance in process to gradually maintain profitability is needed but a wholesale mentality in this day and age is not difficult to obtain.It is the order, process and production that would be key, proper tools would be vital. Starting first by hoarding and selling bulk, then methodically working to build a inventory of the most sought after parts.
Experience has taught me that yes some things should be flipped immediately but others are worth the effort to collectively gather. Labor would be an issue as all business struggle with this conundrum. It is the proper management of time and resource that makes any venture worthwhile.
To each his own!
I don't expect to be understood with these simple writings on such a diverse topic.
Consider this just another opinion and take it as you will. I mean no disrespect to any other purpose or procedure as there is always more than one way to skin a cat.
Cars was a mere example, as I have done this with appliances in the past. It would be possible with anything such as heavy equipment or tool and die machines. I must admit knowledge and research would be a never ending development it is not for everyone. |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
Edited by - cptindy on 04/17/2010 13:04:54 |
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hobo finds
Penny Hoarding Member
838 Posts |
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mr_chook
New Member
9 Posts |
Posted - 04/18/2010 : 04:57:32
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GESS.. Its getting complicated now, you would need a lot of experience in the wrecking yard industry true they are both kind off the same but you would need a lot of space to store all the parts and more expense to consider,
cptindy do you have any business plan for a scrap metal yard that i can have a look at so it can give me more info about it thanks
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/18/2010 : 06:55:47
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I appreciate you question towards a business plan. It is Business wise to collect all your thoughts and understanding and lay them out in a organized fashion. It also serves well when approaching investors or financial institutions. I have written several in the past and have always used a simple to use software. There are many available but I have only used You must be logged in to see this link.
If you are somewhat computer savvy check out You must be logged in to see this link. for a torrent file of business plan pro. |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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mr_chook
New Member
9 Posts |
Posted - 04/18/2010 : 18:42:44
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thank you once again cptindy, just one last question so the profit from scrap metal is only about 20 to 30 % right ?
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Starting a scrap metal yard business?
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