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Selling Scrap Metal / Scrap Yards

Discussion in 'General Entrepreneurship and Startup' started by bosco, Jan 7, 2009.

  1. bosco
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    bosco New Contributor

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    Anyone in the scrap business? How does the collection yards work? How do they make money? Who do the collection yards sell too?

    Also with the price that copper is at right now, is it worth collecting and holding onto it until the price goes up?
     
  2. bflbob
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    bflbob Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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  3. Justin
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    Justin New Contributor

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    Scrap is WAY WAY down right now.
     
  4. bosco
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    bosco New Contributor

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    Thanks for everyones input here. I am focusing on materials that I have reasonable access to. Copper, Brass, Aluminum, and some steel. Unless you have access to alot of steel its not really worth handling and warehousing it for .05 cents a pound.

    I built a machine to strip copper wire and was thinking of buying wire from the electricians, etc.....have my retired father strip it and then sit on it until it goes back to 3 bucks a pound. only at a dollar now.

    What I want to learn now is how to deal direct with the big yards and not the local feeder yards. Basically want to deal with the folks that all the yards deal with. If I did enough volume I am positioned to open to the public to startbuying but need to be able to sell higher to pay same price as the rest of the yards.

    How much margin are they working on if they are paying a dollar a pound. How much do they turn around and sell it for? Do you think they also time the market and sit on inventory when it is low and sell it all when the prices go up?
     
  5. Excalibur
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    Excalibur Contributor Read The Millionaire Fastlane Speedway Pass

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    I'm wishing I had held onto a load of copper I had. Sept 2009 I bought over 1,000 pounds from an IRS auction for $300 and cashed in for $1,900. Was in the scrap yard today and noticed it would have been about $2,770.

    I doubt this will be a fast lane vehicle for me, but it's a decent ROT/ROI in my spare time.

    I'm now thinking I should stockpile scrap as I come across it, then negotiate a better price when I take it in. I got a 5 cent bonus when I took the aforementioned load in. Not much of a bonus if you ask me.

    Currently working on a load of stainless I need to cut up/separate to get clean price.

    Glad to see this topic. I was wondering the other day if there was one on scrap metal.
     
  6. Excalibur
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    You're right bosco, steel isn't worth warehousing. I bought a lot of 232 5 drawer file cabinets last year. Original plan was to sell them for 10/15 bucks each. Would have resulted in about 2,320/3,480 bucks. Once we got into it, it was evident that moving and storing this many was going to be more hassle than it was worth. Ended up scrapping all but 20 or so, and sold those for 20 a piece. If I recall, I scrapped about 17 tons. The scrap yard was amused by this many cabinets...they even set a few out in their "for sale" pile.
     

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