How To Open a Scrap Yard

Scrap collection

Contrary to what most people think, a scrap yard is actually a profitable and stable business.  With so many people throwing old crap around, these seemingly useless things can still be salvaged and recycled.  The best part about it is that you can really make decent money doing it.  Normally, a scrap yard business is quite easy to start up and does not need heavy capital to initiate.  Here are some of the things to keep in mind when contemplating on opening your very own scrap or junkyard.

  1. Check the requirements, permits, and licenses.  Like any business starting up, you will need to know and secure all the necessary permits and licenses to open a scrap yard business. Your best bet in finding out what you will need is to go to your municipal office and inquire.  Make sure to check for zoning restrictions if you have a location for the scrap yard in mind already.  Requirements and licenses may vary from city to city and state to state.  These requirements may limit the types of junk you can sell in the area as well.  So be careful and really ask questions.
  2. Determine the kinds of junk you will focus on.  Before opening up your scrap yard, it would be wise to identify the types of scrap that you will deal in.  Steel, copper, and other precious metals could be an option.  Another popular option is to strip the parts off of junked motorized vehicles.  You can do both but it is better to specialize in a particular type of scrap.
  3. Decide on a location.  Based on the zoning restrictions in your area and the volume of scrap you are to expect, find a suitable location for your scrap yard.  Space is the major aspect to take into consideration.  It is recommended to locate your scrap yard away from residential areas to avoid complaints from your neighbors.  However, make sure to locate your yard in an area that is convenient and easily accessible to your potential customers.
  4. Gather the scraps.  Once everything is set including your location, start gathering the scraps you need.  Rummage around your area for junk that homeowners have thrown away relevant to your specialization.  Try to build relationships with garbage truck and tow-truck companies to deliver scraps to your yard.  If you are dealing with metals, then build relationships with metal resellers as well.
  5. Hire staff.  Don’t forget to hire a few people to work on organizing your scrap yard.  You should not really need a lot of employees since scrap yards do not really get heavy traffic.  Just make sure you have enough employees to work on scraps and pile them in the yard based on the specification and kind of scrap.  You may need people to gather the scraps around the area as well.
  6. Start marketing.  As soon as your scrap yard is open and has a good inventory of reusable junk, you should now start to advertise and market it.  Print out some flyers and distribute it around the area.  Place some signs up and around the area directing people interested to your location.  Newspaper ads are great options for effective marketing as well.  To increase your sales and the public’s awareness, build a website and consider selling scrap online through your website or other ecommerce and auction site like EBay.

Sooner or later, you will begin to see an influx of new customers rummaging around your yard or website.  Sales will soon come if the scraps you are selling are in good condition and can still be reused.


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