Scrap metal collection for profit is a common—and occasionally profitable—enterprise because to this element’s distinctive feature. In this post, we are going to discuss on how to start scrap business? and investment cost and profit margin
When metal goods that we use on a daily basis become useless, they are either discarded or recycled for use in other products or projects.
Recycled materials are equally as important to manufacturers and builders as newly mined and forged metals since metal is a resource that can be recycled several times without losing quality.
Read more: New top 10 best recycling business idea
Given the demand for metal scrap, its use is quite widespread. Metal scrap recycling is a significant business all over the world.
India is a significant market for this huge sector, which employs around 6-7 lakh people. The burgeoning sector also has a lot of promise for the future.
Because over 40% of the world’s steel is manufactured from scrap metal, one may estimate the size of this market.
How to start a scrap business plan?
Firstly. We should know what is a scrap business?
Scrap is derived from recyclable materials which are left from product manufacturing and consumption.
It includes parts of vehicles, building supplies. The materials that can be recycled or refurbished, then it is called scrap material.
Scrap metal recycling conserves energy. Recycling metal takes much less energy rather than mine, produce, and process entirely new metals.
Let’s see how you can start a scrap yard business? and what are the important materials?
The main important materials in the scrap business.
Copper: Copper is the main material in the scrap business because of the consistently high value.
Copper scrap includes such as tubes and wire. It can cost up to 150rs for half of the kg.
Where you will get this copper found? It can be found in electrical wiring, electromagnetic components, and plumbing.
All types of copper do not have the same price. You can get high value for bare bright copper. Its insulation must be removed. There are grades in copper. Different grades have its different value.
Brass: This product can be found in locking mechanisms, pins, handrails, bolts, light fixtures, furniture, household decorative elements.
Aluminum: Recycled aluminum can be sold at a higher value. Because it requires 95% less energy than producing new aluminum from ore.
Many industrial recyclers are willing to pay more money to scrapers because they want to keep the supply continuous.
Lots of products are made up of aluminum such as outdoor furniture, hand trucks, exercise equipment. Aluminum has a higher demand in the market. You can add this item to your list while starting a business.
Area requirement for crap business in India.
People who have starting a scrap metal business needs 3000 sq. feet area to collecting scrap material.
The area depends on how much scrap you will collect from the market.
Scrap business cost in India.
The startup cost would be around 1 lakh rs to develop infrastructure for scrap business. It also depends on how many people you hire on the initial level of business.
As one might expect, recycling metals is not a small-scale business, so you’ll need a substantial amount of cash to get started.
It may be calculated by adding up the costs of various types of resources, utilities, manpower, and machinery.
You have the option of owning or renting the factory. It’s all up to you and your budget. If you have a limited budget, you should rent it first and then buy it later with the right investment.
Types of recycling scrap business ideas.
- Cartridge Recycling
- Battery Recycling
- E-Waste Recycling Business
- Construction Waste
- Paper Recycling
- Plastic Recycling Business
- Garbage Recycling
- Recycling Glass
- Tire Recycling
- Junk Car Recycling
- Medical Waste Recycling
These all types of recycling ideas come from scrap collection.
Infrastructure is the second essential area for investment, and this is where you will have to spend some money. Depending on the requirements, expect to spend between Rs 1 and 5 lakhs.
The next point to consider is resources. Various resources, such as equipment, machinery, technicians, and computers, might easily cost Rs 5 lakhs.
You may consider hiring them, which is ultimately a smart way to save money. You can rent all of the resources or just a few and own some, such as primary machinery that aren’t accessible for rent. Machines do have a hefty price tag.
Depending on the requirements, these devices range in price from Rs 1 million to Rs 20 lakhs and beyond.
Choose a machine that meets your needs, which means your machine should be based on what you’re recycling, how much you’re recycling, the quality of the recycled product, and how much you’re recycling.
Scrap metal business profit.
We already know how much is the market potential of this business. It is a very profitable business all over the world.
You can make almost 5000- 10000 $ per month from this scrap business. Lots of scrap recycling companies are making huge amount of money from this business.
There are two types of scrap metals like ferrous metal and non-ferrous metal.
Here is a list of materials. Go through once.
Ferrous Metals: Alloy steel, Stainless steel, Carbon steel, Wrought iron, Cast iron
Nonferrous Metals: Aluminum, Brass, Copper, Gold, Iridium, Lead, Magnesium, Palladium, Platinum, Silver, Tin, Zinc.
The difference between ferrous and non-ferrous metal is
Ferrous metal is magnetic and contains iron. Likewise, non-ferrous materials do not contain iron and are not magnetic.
Related: How to start a recycling business?
License and permit for scrap business:
You can request a license application from your local government authorities.it maybe includes processing and license fees with your application.
Where you can find Scrap Metal for your business?
Finding scrap material is not that easy game.
You can get scrap from auto repair shops, demolition sites, plumbing businesses, and residential collections.
Some businesses regularly generate scrap. You may contact them for regular pickup.
You can use digital marketing to collect scrap. Use Facebook Marketplace, Craiglist, or through apps like OfferUp and LetGo.
Garage sales, thrift stores, Real estate sales, auctions, and flea markets are the places that generate metal scrap regularly. So you can contact them for regular pick-up.
How to identify scrap?
You can use a magnet. Check the metal’s ferromagnetism. Note down Weight and item of origin.
Iron and its alloy steel most common metals in scrapping. Iron is ferromagnetic, strong, and lighter. Excepting aluminum.
Aluminum is non-ferromagnetic material and very light in nature.
Pure copper is slightly pink in colour. It tarnishes into a jade green color. Copper is non-ferromagnetic and slightly heavier than iron in nature.
Bronze is an alloy of copper, It is a much lighter, almost gold color. This material can be found in instruments, decorations, and pipe valves.
Lead is extremely soft and heavy. lead is extremely toxic. It is used to make bullets and as radiation shielding. Use protection while handling it.
There are also many different grades with their own properties. you will come across rarer valuable metals if you scrap electronics. So you will have to study it.
Purchase or rent a vehicle for your scrap business.
Get a vehicle large enough to transport large amounts of scrap metal.
Cover the inside of your vehicle because it can prevent damage or staining.
You will have to cut down costs that’s why choose a vehicle with good fuel efficiency.
Invest in protective gear.
It can be dangerous while operating a scrap business.
While dealing with scrap it can cause cuts, tetanus, blunt trauma from falling objects, radioactive or hazardous waste.
Hardhats, welding goggles, Wear thick spill-resistant gloves and boots should be worn when hauling bulky items or when near stacked metal.
Let me know If you have any queries about the scrap business?