Harvest Scrap Metal for Cash

October 22, 2014 by: 0

Scrap metal business is one of those businesses which are dirty and dangerous on outside but highly profitable on inside. Especially the metal which can be recycled produces high returns. In current economic tough time it is one of the most profitable businesses because of the continuous increase in the prices of metals. Now companies have started building networks with local scrap businesses in order to harvest the metals which can be recycled. Because making new metal from raw material is costlier than recycle by melting. There are different types of scrap metals like copper, aluminum, alloys, steel and many others. Each and every metal can be recycled.


Understand the importance of scrap
Scrap consist of metals which can be recycled to use them again in manufacturing of various metal based parts or products such as vehicles, vessels, metal parts etc.

According to research done by Environmental Protection Agency, recycling of metal has helped to reduce air pollution, water pollution, has helped in reduction of mining waste and also helped in saving energy and raw material used.

There are majorly two kind of metal industries one is ferrous and non-ferrous
i) Ferrous metals consist of iron them are the ferrous metals
ii) Nonferrous are without iron metals like, zinc, copper, magnesium, brass, aluminum, tin, lead and nickel.

Even there are few precious and exotic metals. Precious metals are gold, silver and platinum. Exotic metals consist of cobalt, mercury, titanium, zirconium etc.

Procedure for Recycling
Initially scrap is collected in one place for processing. It is initially handpicked in terms of their sizes. Smaller ones are differentiated from larger ones. Then they are sent to smelter for melting. Larger ones are cut into smaller pieces and then they are sent to smelter.
If you are looking to harvest scrap metal for cash then here it is how.

Legal procedures
If you are thinking to open scrap business, you require some legal advice in terms of licenses required. You can consult your local lawyer or business registry office. Once you have cleared the license issue. You require a land and no objection certificate of local authorities that land is clear to use for commercial purpose and scrap will not harm the locality. Even after you have opened your business with complete legal procedures you can get surprise visits from local inspectors regularly. These inspectors will look for various things like your working environment, whether your scrap is harming local environment or not.

Loan for business
If you are start up business, then you will definitely be asked about the health of your bank balance, how much capital you require. Because in this business you require vehicles, land and equipment like crane etc.

First thing you should do is get your annual credit report. You can easily get your credit report over internet with websites like annualcreditreport.com and many others. This report will give complete gist of your expenditure and kinds of credits you are holding. Look out for the most problematic credits which are most likely your fancy buys like yacht and their late payments etc.

Next get your Credit score, which is nothing but a score card which reflects your creditworthiness. This score is based on individual’s credit report. There are number of bureaus which provide credit scores based on annual credit report like Innovis, TransUnion, Experian, CIBIL, Equifax etc. depending on the country you live in. The higher your credit scores, the more banks will be keen to give you good loan. The lower the credit score, the less interested the banks will be to loan you money but all lenders are not similar and while it is not good to loan you money, there is always one lender who might be interested in loaning you money.

You can take loan for your transportation, which comes in terms of automobile loans. Even you can take loan for land you want to lease. There are even banks available that are very keen on providing loans to businesses which have very good profit returns. Scrap, if done in large scale it can be one of the most profitable businesses around. You can even ask for a partner who might be interested in investing his money in the business. You can form a group in which one buys transportation; the other gets land and another gets equipment. In this way you complete each other’s requirement. This will reduce the burden and credit on one person. At the end you can divide the profit amount among yourselves equally.

Most importantly, if you are looking for business opportunity in scrap metal business, the first you require is transportation. A truck would be the best transport for it. It gives ability to transport heavy metal loads. If possible a heavy hauler truck creates a good opportunity to business easily with large metal scraps. You can transport big engines which are used in mega ships, old industrial equipment which is of very old nature, etc. Truck should be insured because there is a chance of damage in transportation. Even the interior of the truck should be strong enough to hold sharp and heavy metals.

You can take trucks on contract if you are not able buy the truck. There are always truckers who are looking to provide their truck and driving services. There are large numbers of transport companies that specialize in heavy loads. But this option is always for those who are looking to open big scrap business. But if you do not have such capital and you are looking for small scale business, you might start with buying second hand truck in good condition for some time. Once your business gets running and you earn enough profit to buy your own truck, you can then buy a new truck.

Drivers you use require special certificates. If they are looking to carry load which is over sized he must have heavy motor license. If your driver is going to carry load like exotic metals, it is important you have a driver qualified for carrying out such loads especially with metals like mercury.

Scrap Yard
Once you have your transport, next what you require is a storage area. Storage area must be big enough to withstand metals with any shape and size. You can lease a piece of land. Generally land outside cities is cheaper as compared to industrial area. Generally local authorities will require you to encounter a number of legal procedures to go through as mentioned above. These are very important because if anything is not cleared by government regarding land, you might end up losing your money. There is generally a certificate which is required that land can be used for commercial aspects. And you should take the land which is away from residential area. Generally government will take care of it.
Land should be secluded enough to dump the hardies waste away from the society to avoid spreading of metal based dusts. This dust can harm inhaling capacity of a normal human being. Even local authorities will keep an eye on what kind of waste you are storing or throwing out. In the yard, a cutting area must be arranged with toughest cutters. This will help you cut down your metal into smaller pieces and it will help you separate useful metal from unwanted material. If you do not have enough capital then a storage unit size of small warehouse will be fine or even a trailer will be fine. But it is a must to have a processing area.

Harvesting scrap metal
Most of the scrap which is easily available is from domestic use. In the backyard of a house, there is always one scrap like old refrigerator, old furniture, old bicycle, car etc. People just wait for someone to buy this scrap. It would be good idea if you pick a locality and go door to door. This will give a start to your business. There are few things you must keep in mind before you take up any scrap.

·         Examine the scrap, will you be able to sell it further or not.
·         Always keep in mind current prices of metal. They are easily available through internet or local market.
·         Ask about the ownership of the metal you are buying because it is quite possible someone might try to sell an item which is stolen from somewhere else.
·         Always try to buy a metal which will give profit. Never invest just because owner wants you to just get rid of it. If you buy such useless item, it will be a burden for you to carry around and might end up taking huge space in your yard.

Another thing you can do is networking through internet, local newspaper and even flyers will help. In these advertisements you can ask them for scrap metal. This will help you to get scraps delivered to your door. You can go to companies that use metals as raw material. If you are able to get one or two of such companies interested in your services, they might give you a contract of supplying metal. You should also visit companies which are going through shutdown for up grading because they might have equipment or metal parts which are no more useful for the company. Even ship dismantling yard have huge collection scrap metals which can be useful for you.

Most used metals like aluminum, copper, steel and iron can be easily stored in normal environment.  You can process them and then organize them into small pieces. But metals which are precious like gold, silver platinum which are normally not sold in scrap; they are always removed by their owners. But in case you have them, you require a safe place with some security as they have higher cost than others.

Exotic metals such as mercury require a special treatment. They cannot be stored normally. They require special case because if human comes in touch with them they might be harmful and can even cause death.
This brings big aspect that you should focus on while working in your yard, that is, use of protective gears. While working around large and sharper pieces of metal you always run a risk of being cut or trip on to something. There are gears like gloves, over coat, glass, helmet, boots which can be used in this area.  Even your customer who visits your scrap yard must be given basic protective gear. Moreover you should organize your scrap metal in such a way that it is easily accessible. You should also make sure scraps do not run a risk of falling on someone or someone tripping on them.

Selling your scrap
First thing you should know is the difference between types of metal. There are few common metals such as copper, aluminum, alloys and steel.  Metals prices keep changing so it is important you quote your selling price according to the market. Keep in mind that you are selling scrap not fresh metals, you are bound to get less prices than real metal. There are a number of buyers around who are willing to buy scrap metal. There are companies that used metal as raw material like copper scrap which can be melted for reuse to make wires, vessels etc. There are large numbers of recycling center that only look out for scrap metals. If you have scrap yard you should keep it open to people so that they can buy your scrap.

Scrap metals like iron, steel, aluminum can be priced by its weight. But if you have some other kind of equipment, you must check whether it is working or not. If it is possible to repair the equipment you must try to repair. Because you may not know, it might have high value in working condition.

Running smooth business
Once you have everything running, you require few skilled staff like, trained welders and cutters, crane operators, drivers of heavy hauling truck and few labors. Even at small scale you will require assistance of skilled labors. An account will be must if you are entering with some supply contracts with some firm to oversee your monetary transactions.

This business has a very good growth; concentrating on rare metals will be huge advantage to the business. As you grow along the way, your storage of scrap metal will grow. In future, it may be a good idea to convert your scrap yard into a good recycling center. Recycle center will not only give profit on selling but also on buying.

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