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Old September 8, 2007, 06:02 PM
MichaelRoss
 
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Default An Insider's "Getting Started Thoughts" On Scrap Metal as a Business

Stewart,

Thanks for asking about Scrap Metal.

You do Not need a Truck to get started in this business. Heck, you don't even need a Pick Up - it helps if you do have a Pickup, but you do Not Need one to get started.

In fact, one fellow in the UK started his Scrap Metal Business with his Sedan. If the load was too big to transport in his Sedan he'd either hook up a trailer to his sedan, Hire a Pickup or small Truck to drive to transport it, or even hire a larger transport with driver if it warranted it. With the point being, do Not let your lack of Pickup be a hindrance to getting started in this business.

He started by taking his scrap to existing scrap metal yards - as all people would be advised to start. And eventually opened his own yard.

And with regards to this, you need to know the various prices at the various yards. And you need to know this for a couple of reasons...

Reason # 1: For convenience and Smoother Operation. If you have a Load on the West side of the city you live in, you don't want to drive to the East side to drop it off at the scrap yard unless it financially warrants it. You'll be losing too much Time in traffic. Better to drop off at the Nearby Yard so you can do more jobs in that area.

Reason # 2: You might be able to get more money for some metals at some yards than others. For example, one yard might be paying $1.90 per kg for Aluminum (alley, as we call it) while another yard might be paying $2.20 kg. If you have a couple of hundred kilograms one yard would be paying you $380 and the other yard $440 - a difference of $60. Better to take it to the yard that pays the best, as long as you don't then spend the extra money in Costs to do so. (Silly to drive across town to get the extra $60 while spending $20 on fuel and losing out on another $300 job in the area because you took too long to check them out and give them a price.)

You can find out their respective prices over the phone. Call them and ask them for their prices on...

Brass
Stainless Steel
Steel
Copper - pipe, stripped wire, insulated wire
Aluminum

With the exception of Steel, you should get prices per KG or Pound. Steel is by the Tonne and is quite cheap - maybe $80 per 1,000 kg.

Generally, the prices go...

Copper Wire Stripped (sometimes three times as much as insulated wire) and Copper Pipe
Brass
Copper Wire Insulated
Aluminum - there are usually two prices for Alley depending on if it was Cast Alley or not.
Stainless Steel

I actually like Brass over Copper Wire because of its Weight to Volume ratio. It weights a lot while taking up a small space. (Visit a hardware store and pick up a Brass Faucet Set to understand this.)

You'll also need to carry a magnet around with you. With the exception of Steel, the others are Non Magnetic. Important to know before you think you've got a load of Brass when it's really Brass Coated Steel or Brass Colored Steel.

Also a good idea to carry around some Hay Bale Bags or Garden Waste Bags or even the smaller Fertilizer Bags to put Loose Wire into. A small fertilizer bag might hold 20kg of wire while the larger bags could hold around 100kg. At $2 per kg for such wire, the small bag would be worth about $40 while the larger bag around $200. Often, you can get such bags for Free from the scrap yard by telling them you have a Lot of wire and need a bag to put it into to get it to them.

Other handy items would include a Four Wheel Trolley - the kind you see sold in Office Supply Stores and some Auto Accessory Stores. Flat, and low to the ground, they are ideal for putting those Bags onto and then Wheeling to your vehicle.

Many bags of wire can be filled during an Office Strip Out. In fact, talking to a couple of Sparkies on a 12 floor strip out I was involved in, they took out 1,500kg of wire per floor. At $2 per kg, that was $3,000 worth of wire per floor. Times the 12 floors and their boss pocketed $36,000 in scrap wire while also Charging for taking it away.

Another fellow would visit Mechanics and take away the discarded Catalytic Converter (CAT). Last I heard, he opened them, took out the Titanium and put it into four 44 gallon drums (all on one pallet) and sold the four drums to a company in Germany for $120,000!!!

Another guy drives around in a small Flat Bed truck picking up bags of wire. I've seen him with 8 bags on his truck - at anywhere from $200 - $300 a bag (depending on the price at the time) he had at least $1,600 worth of scrap on his truck.

Some sparkies have told me about Wiring Up a new office fitout on the Friday only to find it stripped of wire on the Monday thanks to Wire Thieves who then sell it to the scrap yards.

Even hotwater systems have a value - copper ones. Ask your scrap yards how much they pay for a system. If they paid $50 say, then you could run an ad...

Hot Water Systems Wanted. Any age or condition. Cash Paid. 555-5555

Pay $15 to $25 per system and you'll make $25 to $35 per system. Ten systems a day will make you $250 to $350 per day. If you find you can get $70 per system, then paying $15 to $25 per system nets you $45 to $55 - ten per day then makes you $450 to $550.

You might be able to Do A Deal with some Sparkies to Cash In their wire for them. They call you to let you know they have few Bags ready. You visit, pay them in cash, then take the bags to the Scrap Yard to get paid yourself. In such cases, always make at Least what you paid them. That is, if you paid them $100 for the bag you want that bag to be at least worth $200 to you. While this is a 50/50 cut you'd not have those bags without them doing the stripping and bagging work for you. And you make some easy money just taking it to the yard.

This is one of those businesses where you have to get the word out Directly. To mechanics to collect Copper Radiators, Plumbers who might replace water systems for the Brass and Copper they take out, sparkies for the wire, and so on. Many such Contacts already know of the Value of the Scrap they have, and would use you as a Convenience to doing it themselves. But it's worth sending them a flyer or even Business card letting them know you exist.

Heck, you might even find a niche taking away old washing machines and the like. They have Metal which has a worth...

Old Washing Machines & Dryers Taken Away. Only $10 Disposal Fee. Call 555-5555

Get paid to take it away and paid for the metal it has. It's usually Steel Outer and Inner so might not be worth the High Prices of Copper or Alley, but the yard still might pay you for them - call them and ask. Even if they won't pay for them they will Take Them Off Your Hands, so you could still make money charging others to take them away.

You'll find some metals come into your hands in greater volume than others. In this regard it's a good idea to have some Storage Containers at home. A Container for each metal is ideal...

So as you come across the odd Brass Faucet it goes in the Brass Container. Same for Stainless Steel Door Handles and Door Furniture going in the Stainless Steel Container. That enables you to have small Stock Piles of certain Items to be Cashed In when they reach 20kg worth.

Other than the above, just get into and learn the rest as you go. You'll discover there is more metal available than you at first realized.

Michael Ross
www.hotsheetcity.com
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