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How to Start a Scrap Metal Business
Be able to identify and sort different metals. Buyers will be purchasing specific metals by the pound. You will need to accurately identify your scrap for sale. To do this, first use a magnet to check the metal's ferromagnetism (whether or not the magnet sticks). Weigh this information with the metal's appearance, weight, and item of origin. There are five major metals that will likely make up the bulk of your scrap.
- Iron and its alloy steel have many uses and are probably the most common metal you'll be scrapping. Iron is ferromagnetic, strong, and lighter than most other metals except for aluminum. While normally different shades of gray, it rusts into a reddish brown.
- Aluminum is non-ferromagnetic and very light. Like iron, it is ubiquitous.
- Pure copper is slightly pink, while lower grades are a reddish brown. It tarnishes into a jade green color. Copper is non-ferromagnetic and slightly heavier than iron. You'll find copper in wiring and quality cookware.
- Bronze is an alloy of copper but is worth significantly less. It is a much lighter, almost gold color. It is commonly found in instruments, decorations, and pipe valves.
- Lead is extremely soft and heavy. It is typically used to make bullets and as radiation shielding. Keep in mind that lead is extremely toxic, so use protection when handling anything you suspect to contain it.
- Keep in mind that within these basic categories there are also many different grades with their own properties. For example, most stainless steel is non-ferromagnetic. Additionally, you will probably come across rarer valuable metals if you scrap electronics. Study these before starting your business.
Learn how to disassemble objects for scrap. In order to sort your scrap, you will likely need to break down larger items into smaller component parts. Some objects can be taken apart easily with simple tools, while others will require a blow torch or a metal saw. The item type will determine exactly what steps you will need to take. Look up information online before scrapping something you haven't worked with before.
- While many buyers will purchase wiring as-is, some scrappers choose to strip it themselves to get the full copper value. Figure out if the difference in price is more than the cost of your time and labor. Stripping wire may be worthwhile when you're first starting your business, but less important later on.
Keep track of metal prices. Check metal prices regularly to be aware of what to charge and what to pay for scrap. To do this, simply use the Internet to search for "commodity trading prices." Be sure to ask local contacts in case your area sells at a different rate. It may be a good idea to offer a fixed rate when buying scrap while asking buyers for close to the market rate when selling.
Category: Business ideas