Strategies to Help Your Scrap Metal Start-Up Weather Competition

Posted on: 19 May 2017

Recycling is becoming big business today as companies continue to pump in millions of dollars into recycling programs. With so many startups scrambling for scrap metals and selling them to metal recycling companies, you might think that your start-up scrap metal business does not stand a chance. However, there is no need to worry because there are steps you can take that will ensure your business peaks steadily. This article provides you with valuable information regarding ways you can stay ahead of the competition.

Buying Location -- Since you will be buying scrap metal from suppliers, it is critical that you choose the location of your vendor carefully. When it comes to buying scrap metal, one of the price determinants is the geographical location of suppliers. For instance, a scrap metal yard located in or near cities and industrial areas will likely sell its scrap metal at a higher price compared to a source that is located on the outskirts of the city or further inland. Such high prices can be attributed to intense competition since demand is elevated in the towns. Therefore, you can take a trip inland and visit scrap yards located in rural areas where competition is weak to seek better rates. The rule of thumb is to buy cheap and sell at an optimal price.

Buy Clean Scrap Metals – Mostly, recyclers will not tell you this on your first supply, but to some degree, they like dealing with scrap metal suppliers that provide clean scrap metal. Now, you might wonder what clean scrap metal means. Clean scrap metal is free of other materials such as plastic or paint. Such preference comes from the fact that recyclers spend a lot of time separating plastics, paint, and other non-metallic materials from the main scrap metal. Therefore, it is up to you to take the time, visit several yards, and find out clients that stock up on clean scrap metals. Since you are a startup, such a strategy will help you win customers early on since you will be helping them to save time and energy during their recycling processes.  

Play the Seasons -- One thing that most scrap metal business owners might not know is that seasons do determine the price of scrap metal. For example, during summer, most recyclers prefer to visit yards by themselves; they do not necessarily need an intermediary like you. In such times, the price of scrap metal falls slightly. However, during cold winters, recyclers find it hard to venture out. Therefore, you can take advantage of the situation and sell your scrap metals at a premium price. For that reason, stock as much scrap metal as possible during summer, then sell it during winter. Nonetheless, such a strategy will only work where the scrap metal market is not volatile.