How do junk yards make money
Since the TV show “Die Ludolfs” at the latest, all of Germany has known that you can make money with junk. But how? That's the big question. Indeed, opening a junkyard is a business idea that doesn't inspire positive feelings in every founder. Too loud, too dirty, too exhausting - yes, who one Open scrap yard wants, must not be mimosa, but must be able to tackle. It seems that hardly any other business is further away from the current digitization trend than the junkyard. A single word proves that it can still be worthwhile to enter this business area: scarcity of resources. It is a huge misconception that this world offers us an infinite number of raw materials. At some point every resource is used up. Good for those who still own them and can sell them on.
Scrap yards as an important link in the recycling cycle
Anyone who has been to a junkyard knows that most of the things found here seem utterly worthless. So the legitimate question arises: How can you make money with this business model? After all, when something is labeled scrap, it is no longer something that can be sold at the flea market, but a case for the dump.
The secret of most junkyards are metals. Almost everything that ends up here is either entirely or partially made of metal and therefore has enormous (hidden) value.
As a junkyard owner, it is not only your job to accept and store the apparently worthless things, but also to use them so that money comes into your coffers. This works best through recycling.
Copper, aluminum, nickel, zinc - all these metals, so-called non-ferrous metals, are in great demand and at the same time the most important resource for your business. Their primary task is to separate the valuable raw materials from the actual scrap and to sell them on to large recycling companies, for example. These then recycle copper and the like so that they can be used again.
Basically it can be said that you can not only earn money with metallic raw materials. Other strategies, in which, for example, wood or plastic play a central role, are also quite conceivable. At this point, however, it must be expressly emphasized that the most money can currently be earned from reselling non-ferrous metals. It is therefore definitely worthwhile to specialize in these raw materials - even if many other scrap dealers choose the same route and thus become direct competition for you.
What requirements does a scrap dealer have to meet?
You may have already read it between the lines: anyone who wants to open a junkyard has to acquire extensive knowledge about metals and other raw materials. Even if it often seems like this: The job of scrap dealer is by no means undemanding and can be practiced by anyone. Anyone who wants to be successful in this industry has to be able to meet various requirements. These include, among others:
- business knowledge
- Expertise (metals, recycling, etc.)
- hands on mentality (willingness to tackle every day)
By the way: If you want to specialize in trading in old cars, you have to take an examination at the TÜV. This certifies that your junkyard is suitable as a recycling company within the meaning of the End-of-Life Vehicle Ordinance.
Finding a location
A challenge that almost every scrap dealer has to face at the beginning of their career is finding a suitable location for the scrap yard. If you intend to take in really large quantities of scrap and sell them on later, you need a sufficient amount of space.
Since the scrap yard opening is a very loud and dirty business, as already mentioned above, you should definitely not choose a location in the inner city area. This will only make you enemies who in turn will put numerous obstacles in your way. Better to settle in the outskirts or even in rural areas.
In order to guarantee that you get enough scrap, it makes sense to set up a pick-up service. This means that you buy a van and use it to collect scrap from your customers. This means that they have no effort and can lean back and relax.
tip: If you transport objects that contain environmentally harmful substances (e.g. half-empty tanks, batteries, etc.), you need a corresponding permit.
Where does the scrap come from and where is it sold to?
If you want to open a scrap shop, you should always keep one thing in mind: You do not earn any money just from space. In order to really start a lucrative business, you should ask yourself two crucial questions before setting up a business:
- Where do I get the scrap from?
As a scrap dealer, it is best to have a variety of sources to get you started. These are on the one hand private individuals who simply want to get rid of their old devices and on the other hand business customers such as electricians or steel construction companies.
tip: Try to build as many business sources as possible. This usually means that you will receive scrap continuously and not have to reckon with any bottlenecks.
The question of who will later buy your scrap can be answered with the help of Google research. There are scrap and recycling companies all over Germany and of course all over the world who buy up scrap metal and other raw materials and recycle them.
When it comes to selling scrap, it becomes clear why in-depth expertise in this industry is so important. As a scrap dealer, you need to know the current prices for various raw materials at all times. Otherwise you can quickly be ripped off and you sell the metals and other resources far too cheaply.
Theft: a big problem for scrap dealers
If you decide to open a stationary scrap shop and have already found a suitable area, then you should definitely think about ways to secure it as well as possible.
There is hardly a problem that junk dealers have to grapple with more often than theft. Word has long since got around that the supposed junk is cash. And so it happens that junkyards are regularly broken into.
In addition to high-quality fencing, you should also spend money on a professional alarm system. It also makes sense to think about running a guard dog around the area. Often a little energetic barking is enough to drive the thief away.
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