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Steps to start a Scrap Metal Business

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The scrap metal market is what lots of people refer to as a recession proof business. Scrap yards thrive with the good and bad, because they always make a specific amount around the metals no matter what the cost is. This is called the mark-up. Your mark-up must be sufficient to make a profitable living, but small enough to be able to stay competitive with the competition. Now day's people know that their metal may be worth something. Some might not know exactly what, but when you give an honest price to every customer you will continue to do business with them.

Step one: Learn to identify various different types of ferrous and non-ferrous metals. You have to know what it really is that you're buying out of your customers because different metals have different values. Note: There is a huge difference in price in "clean" vs. "dirty" non-ferrous metals. The main reason non-ferrous metals fall into the "dirty" category is because have other metals included. For instance, you might have a piece of copper pipe having a steel fitting or steel bolts attached to it. You have to get the steel taken off the tubing before that piece of copper could be sold as "clean." This is very essential for you to remember so that you don't pay too much for the metals. Purchase a small magnet to look for the distinction between ferrous and non-ferrous scrap metal. Ferrous metals for example Iron will stick to a magnet.

scrap metal

Step 2: Locate and map out metal refineries and large industrial scrap yards in your town. Discover what each place covers your different metals. Calculate just how much it will cost you in travel time/fuel to get at each of these places and find out which of them is going to be most profitable to you. Time is money, much like fuel.

Step three: Once you've gotten a cost for which the metals will take you, determine how much you are prepared to pay so that you can be profitable. The more you can pay, the more business you'll do. Keep in mind your travel time/cost. The greater time you can spend buying, the greater.

Step four: Since you have decided who to sell to and just how much to pay, you've gotta get out there and hustle the metals. There are various ways to acquire the metals. It really just depends upon how much capital you are working with. Obviously larger amounts of money to risk help you to get your name out, but I'll start with the price affective methods.

First post an ad on Craigslist in your area telling everyone that you simply buy scrap metal. Craigslist is great because you can post ads such as this free of charge.

Second acquire some business card printing made. You will get these really cheap with companies for example overnightprints.com. Make sure to put your business name, telephone number and website for those who have one.

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Third without having an internet site I recommend one. You can do a lot of online advertising for very little cost with a website. Everyone gets on the internet these days to find what they are looking for. You can use Google cost-per-click services to help you appear or use SEO services. I recommend SEO, because you'll appear as a natural listing rather than an advertisement.

I suggest for that more capable investor a roll-off truck with at least 5-10 roll-off dumpsters. You'll need these for separating your various kinds of metals and also to set down at companies that you may acquire inside your new venture. The more metal you are able to move, the more money you may make.

This is the basics of starting a scrap metal service. The more time you spend in the market the greater you will learn and also the more money you'll make.

Posted Sep 18, 2012 at 6:44am