How To Start a Scrapping Business : Detailed Guide For Future Metal Scrapers

Author: Daren Bell
Updated on February 20, 2020

scrape_yard

Most of the scrapping guides online might be fun to do a quick start, just the basics how-to guide for someone who's looking at getting into it or isn't sure where to start. I know a lot of people who read to this article already have plenty of experience scrapping and if that's the case well this is not gonna be anything to you but thanks for reading.

5 Steps to Start a Scrap Metal Business

  1. Write a business plan
  2. Find a good location for your business
  3. Apply for licenses, permits and insurance
  4. Purchase the necessary tools and equipment
  5. Learn the type of metals, how to identify and sell

Business Plan

Steps to create a good business plan:

  1. Research
  2. Write it down all aspects of your business
  3. Marketing Plan
  4. Finance Plan
  5. Identifying Variables
  6. Planning the future

Research

Do some research. Visit your local banks, I'm also going to let you have a starter pack for sitting up a small business are all different and very helpful.

Consider getting in touch with your local business link. A business link is a government-funded organization specifically set up to help small businesses. I would look at that website and see how they could help you. Tell something to give you good advice on what should be in your business plan.

Write it down.

Writing things down helps to clarify your thoughts and these are the points you should be considering.

  • What's the purpose of your business?
  • What is it that you're selling?
  • What's your Market in other words who are you selling to?
  • What about the competition?
  • Where does your business fit in and even more important where does it differ from the competition?

Marketing Plan

You need to think about your marketing plan. Let other people know that your business has arrived.

  • How to plan your marketing strategy for more advice on this?
  • What are you starting up requirements?
  • What do you need to get your business really up and running?

Finance

Examples of metal scrapping business costs :

  • Truck
  • Scraper tool bag
  • Storage yard

These can cost you a lot of money. So you may need to plan how to finance your business. People are a very important part of any business. Experience and any qualifications, if they needed and then add any other factors using Code Enforcement.

Variables

It's almost impossible to predict exactly what will happen. So it's a good idea to highlight the areas where you can't be precise.

Opening a fashion boutique for example you can't possibly know what your customer footfall is going to be but you can probably predict your seasonal sales trends.

Michael spring summer autumn and winter collections but even these depend on the weather.

The way forward

Finally, think about the way forward. Once you considered all these points, try to predict how long it'll take you to get your business really up and running. It'll probably take a lot longer than you think. Her Majesty's revenue and customs wouldn't be surprised if you didn't make a profit for two years but you need to keep steady cash flow. This is why you need a good bookkeeping system and cash flow forecast which will help keep you on track.

Tools for scraping metals

You're gonna need some tools and I wouldn't suggest anything less than a magnet a pair of wire cutters. Sometimes I prefer the cheap ones, they're a little bulky and to be honest tin snips like these are the wrong tool for the job they are gonna go dull if you use them to cut through wire all day but when they're sharp they make things go fast and smooth so I still prefer them.

You also need a quality pair of grips. There's a ton of different ones on the market but I like the ones that have a lot of grips and a really wide mouth. I like these and a multi-head screwdriver as a bare minimum. There's an upgrade this is the way to go cordless that saves you a lot of effort and time and be sure to bring it with the longest head. You've got to maximize its usefulness. I had one and I lost it because it was so useful I had it with me all the time.

How to find, identify, scrape and sell the different type of metals

Ferrous metals

Your magnet here is the first and foremost because that helps to identify ferrous metals. Ferrous meaning containing iron and that is the most common kind of metal you will find anywhere. You can find mountains of it rusting all over the place now. For any full-time serious scrap or that rusty stuff is gonna be the bread and butter. You're gonna find it everywhere and if you have a truck or a trailer you could reliably expect to fill it up and get $40 to $100 a load and you can probably do that twice a day. If you just cruise picking up washers dryers stoves microwaves old computer cases everything that stuff would go in a shredder built-in and the nice part about that is you don't need to worry about cleaning it out.

Please go ahead leave on all the stickers and the plastic garbage and the fasteners. It doesn't matter they don't care same money you might want to remove the goodies like the copper that's in a microwave or the stainless steel drum that'll be in a washing machine but that's totally up to you if you want to spend your time doing it. I'm sure they'll be happy to pick it apart after you leave. For me, this is all the space I've got so I don't usually bother with that stuff.

The most I've gotten out of a steel run in this was 40 bucks and I was focusing on the densest pieces I could find so talking about heavy bars and bed frames and I did have some computer cases and some microwaves but I think it was bearded diver who suggested this to me they were full a little bits of steel. So all the screws and little corners are junk metal. I put them inside the cases so these were very heavy little metal boxes and 40 dollars is decent. So there's nothing wrong with that but I certainly don't focus on steel so much because the pile gets pretty big pretty fast.

I used to ignore brake drums and brake rotors. They're cast-iron so the value is a little higher anywhere from one to three dollars for a piece. So that might not seem like much but everybody just leaves them lying around and it does not take long to build up a big pile of it. When you find one you usually find two or four so it's one of the easiest 5 to 10 $ you'll make.

Some other common places you'll find cast iron which I don't have any examples right in front of me are the grills from some barbecues. They've got to be the heavy thick ones though and old clawfoot bathtubs. That's why they're so heavy most of them are not made it of course and they're cast-iron covered in. Let's say that a magnet won't stick to the bathtub and I wouldn't take it because it takes up a lot less space and worth almost nothing.

Wire

The next most common types of scrap you're gonna come across are aluminum and wire. Let's start with insulated copper wire that means it's got the plastic insulation still on.

There are three categories of insulated coppers which are

  • Number one
  • Number two
  • Number three

They're graded based on the percentage of their total weight. Your scrapyard is going to get out of them.

In actual copper number, one being the best and that a decent rule of thumb here is if you bend it and it holds that bend it's probably some decent number one solid core.

Now different scrap yards sometimes have a different interpretation of what exactly insulated number one copper wire is. So best just ask them to give you an example of the smallest stuff they'll accept as copper one.

Number two that's your everyday stuff the power cords the little connective wires inside appliances may see adapters like all sorts of wires.

Everything else goes to number three which is, of course, the lowest of the low. We're talking about Christmas lights bulbs on little plastic bits stuck on just glow yield out of all of this. I experimented with different types of Christmas lights to see how much you can increase your payout by the hour you spend chopping off all of the bulbs. In short, if you're gonna do it just do the ones with big bulbs. It seems a little counter intuitive but those you'll get about $7 an hour if you work fast. I'm gonna bring them in just like this because that is all the time I have in my life for Christmas lights .

Number two stuff everything else my yard wants it cleaned like everything cut off no connectors. I'm gonna have to find a pair of scissors and get this off because that's not good enough for them but to give me a good price. I want into the number two pile as long as it does not coax. Nobody wants coaxial, do not let it in here number two pile because your scrap yard will not be happy. That's the stuff that TV and old video game systems we're connected to. it looks like it's got a nice solid copper core but that events solid copper center running through, it is actually a steel wire. This is copper coated worthless, don't even pick it up.

Outside of those here's a couple of the types of wire your scrapyard might pay more for if you keep them separate.

The first one cat5 from talking about ethernet cables. You're gonna need to cut the ends off of this but the places that wanna separate will give you a higher price for it. I think it's because it's got five small strands.

The other one this BX cable. It's got an aluminum casing on the outside and the inside. This is a nice solid core kind of stuff and that stuff adds up the price because it's heavy. Some places will pay more for this. Housing wire kind of stuff too and these kinds of ones that's a high copper content with an aluminum sheet so they'll give you a different grade for that as well there is one to watch out for to keep an eye out or you might be tricked see these. It looks like a really nice too thick piece of wire but it's a little suspicious one because it's super flexible and it doesn't weigh very much. So if you take your snips and have a look inside you see that silver Sparkle on there. This is aluminum wire with a copper coating that's another thing you scrap. You don't want you sneaking into the number two copper insulated bin and honestly unless you've got a lot of space I would just put it back even these things. It looks like they've got copper on them that's copper-coated steel also not worth anything into the Shred if you've got a shrimp in.

If you find a whole pile of aluminum wire at once I wouldn't leave it lying around because it is worth money but takes a while to add up so unless you've got more space than you know what to do with or you somehow find it all the time I wouldn't feel bad leaving it behind.

Aluminum

That'll lead us nicely into the most common scrap metal and the most common metal in the world aluminum. Aluminum is fairly easy to identify because of three different reasons; The first is it's extremely light The second is it's extremely flexible The third is it's almost whitish silver color There are a lot more kinds than you might think but for scrapping, it's primarily grouped into three different categories.

  • The first one we see here is old aluminum. It's really thin it's probably been hammered or milled flat somehow it's used on things like siding baking trays and pots and pans. The fact pots and pans are a really common source of this stuff doesn't weigh very much so it does take the kind of a while to add up but fill up a bin and you'll probably have 10 or 20 bucks worth. It's super common you will find it all over the place so it doesn't take as long as you might catch it.
  • The next one and the easiest one to get excited about aluminum extrusion or extruded aluminum. Ignore the plastic bits on this aluminum. Extrusion is a process in which they take a piece of aluminum stock and they heat it and they force it through a shaped die so that it comes out the other side in the shape that they want this somehow makes it stronger. It's generally a much purer grade of aluminum so it's worth a little more. You can tell primarily by looking at the shape and if you see these machined edges like they've been cut down and there are no seams connecting things or they have little divots or shapes where things will stick on to them that's an aluminum extrusion.

Most common sources of these will be fence post hair of getting pieces free legs will be aluminum extrusion and also something like this extruded stuffs a lot denser so it adds up a lot quicker but you might mistake it for steel if it wasn't that it was non-magnetic and so easy to scratch.

  • The other one is cast aluminum you can tell it's cast because it's light and it's got a complicated shape. So you'll commonly find this on waffle iron as well as barbecues and something like this base of a saw. If you're not sure if it's cast just hit it with a hammer. It's really brittle. Another point about aluminum extrusion, there's actually quite a few different grades of this stuff. I went to one scrapyard and they wanted me to separate everything there was like four different bins that they wanted it. It took forever. I don't take aluminum to that yard anymore because I honestly don't have time for that stuff. I go to one word that just lets me throw all of the extrusion into one band gives me one price.
  • There's one other kind of aluminum that's actually pretty common is aluminum rim we just take a minute to appreciate how messed up this one. I got a little water going on here aluminum rim is actually an alloy so it's a different grade and different price but it's a good price. Also, most radiators and cars are made of aluminum especially the new cars. Those are a different grade as well.

I find aluminum to be one of the most important scrap metals to clean and I'm not talking about with a brush and soap and water. I mean removing any of the none of aluminum bits from it because it's worth about three times as much this way. Few of scrap yards have a certain percentage of contaminants that are allowed in the bins that they sell to their buyers. Therefore if I have a big enough pile of aluminum and that's just included in it. I might be able to talk them into just grading it along with the rest of the stuff. I think they told me 5% which is kind of a lot the only problem is aluminum is really light so just a little bit of steel can put it over 5%. We'll find out, either way, I'm not spending all day taking those off something like this these rivets are aluminum not sticking but that plastic is gonna ruin it.
PVC can be pretty resilient but if I can break it off with a hammer that'll save me a lot of time. If it's really dirty they'll call it aluminum breakage which is not worth very much at all but the thing is aluminum breakage is something that's has aluminum on it. I drove into a dumpster one time and I found these two really big aluminum frame windows that still had all of the wood that they were built on and around stuck on to them and I didn't want to spend all day taking screws and nails taking that thing apart. So I just threw him my car took them to scrap. The way they were they didn't like them with the glass in there so I smashed that out over a bucket. I still got 30 bucks for a quick run so well lumen breakage isn't all bad. Just you want to make sure it's heavy enough to make it worth it.

Other less common things you should definitely keep an eye out for because they are worth a lot more than aluminum. Let's talk about copper and brass. You're not gonna find copper very often because everybody's after because everybody knows it's worth money but it's easy to identify because of its color. It's copper or at patinas green and it smells like blood. It's also heavy and flexible we use this stuff in piping because since it's so soft and flexible it's easy to fuse together but it also doesn't contaminate water with rust or anything like that. They kind of switch to plastic for a lot of applications because it's gotten really expensive. Because it's so awesome it's seriously an amazing metal, it doesn't rust, it's really malleable it's got a really pretty color and it's extremely conductive so it's just incredibly useful for so many different things. It's common in microwaves and old tube TVs but if you're gonna scrap those you're only gonna get about $4 out of each of them. So honestly I don't really do them anymore but if you're going to I would suggest stacking up a whole bunch of microwaves and doing it fast. The old tube TVs the good part is not what you might think it's nothing but copper part it's the degaussing cable that runs around the actual glass on the inside.

Copper

Copper also has three different grades;

  • Number one copper which is like this one here it's kind of dirty but it doesn't have any contaminants on it because it does have a green patina but it's still you know a pure chunk and then bare bright which shows the beauty of this stuff. It has to be exactly what it sounds like bear and break the wire fall is the same grid.
  • Number two copper which means it's got contaminants like solder or paints on it.
  • Number three is brass. We can find it in all the same places that they would have used copper but copper was too soft so things like this faucet head all the fittings and threaded parts are brass because copper is too soft. It's still a copper tube on it a lot of the time the silver bits will be chrome or zinc plated brass as well but you're gonna have to get that layer off. You can use a file or saw to separate it.

The number one is bright. This stuff's pretty heavy so you do want to put the time into separating your number two from your number one. This solder no good but if you chop it off right here then that whole length becomes number one and then the end it still has solder. I don't you just throw it into the number two. I have a little pipe cutter. It's a tool that you lock on and then turn and turn and turn and turn but I want to sleep that takes forever. The stuff is soft enough, if you have a sharp enough X just chop through it with an ax on a chopping block but more than likely just hit it with something heavy, flat and bend it many times it'll come right off.

Another one of those ones that you really want to clean meaning taking off all of the steel and plastic and whatever isn't brass because it's worth about three times as much when you clean it. This, unfortunately, can be difficult to take apart so a lot of the time well. I just leave it in a pile because it hurts my feelings bringing it in the way it is and getting almost no money. It's also pretty common for door handles but unless it was a big heavy piece like this I find them too much of a pain to take apart.

You will want to do the magnet test on the hardware as well because often those are breasts other places you'll find brass these plugs they go in as dirty brass but they do add up and even the ones that don't look like, they're brass. If you do a scrape test on them you'll find that these are just coated with something to make them silver and more visually appealing but they're still brass. A lot of decorative housewares are brass or brass in disguise even this candle holder is in fact brass that sexy white brass is one of my favorites. It's extremely common if you know where to look for it and it's worth a lot because it's basically copper in disguise. It's an alloy of copper and nickel I think it's a nickel so well copper is worth over 2 bucks a pound brass isn't far behind it.

About a buck and a half but brass win over copper in the where they use it. It's generally in big heavy chunks so that stuff adds up quickly. All we want to get good at finding an identifying brass like on car radiators. The way they used to make them be made out of big chunks of brass and copper. If you can find one you'll need to do a scratch test to identify them. Generally, something that old they'll just look completely black on all the brass parts and the copper all looks like this really muddy green but you'll be happy when you do find one. Trust me they're out there.

Lead acid batteries

Speaking of big chunky things that add up fast lead you don't want to find you some lead acid batteries. You can identify them pretty easily because it'll say right on it lead acid battery it's exactly what it sounds like it's a battery made out of lead and acid something to do with the way electricity works. You'll also find that acid batteries built-in things like these portable chargers anything that needs to carry power with it. These things are really heavy. They add up quickly and people throw them out all the time. So keep an eye out for them and check a few different scrap yards to find the best price because if anyone's giving you less than 30 cents you're probably getting ripped off.

Other sources of bling a leaded glass window. It's not just a fancy name. This one's frozen to the floor. They used to use those on roofs and doors and it's a fireproofing kind of a thing. Lead is pretty easy to identify because it's really heavy but it's also quite soft.

Rarer metals

Rarer metals are actually more common than you might think. The platinum silver and gold yes we're talking about a waste now. I'm talking about computers laptops cell phones, to be honest, I don't have a heck of a lot of experience with that stuff because I've never sold any of it but dumpsters seem to be all over that game and following their advice. I've been stacking up motherboards, video cards some sound cards, hard drives, and cell phones. Those are the ones I'm stacking in a bin and someday I'll sell them.

Thank you for reading.

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