Do you want money and yet you have nothing much to offer in return? Why not try out the scrap metal business? The best thing about scrap metal collection is that metal is almost everywhere around us just lying there and waiting for someone to collect it.
It does not need to have a lot of skills and experience to start a scrap metal business. All it needs is for you to have the relevant scrap metal collection tips and you are good to go! Here are the most important tips of scrap metal collection:
Tip #1: Start by learning About Metals
It will do you much good if you started by having a knowledge on metals. You are going to encounter different types of metal in your scrap metal collection business. Some of the metal will be highly dangerous to your health while others will be harmless to you. Some will be very valuable and expensive while others will be very cheap.
Without proper knowledge on scrap metal, you will not know how to protect yourself against the dangers posed by this line of business. You will also not be able to know when it is legally right to ‘collect’ a piece of metal and may end up with a legal suit. Therefore, the more you know on the metal industry, the better it is for you.
Tip #2: Understand Scrap Metals Pices Dynamics
What determines the prices of scrap metals? Do you understand how metal prices fluctuate in the market? What causes the fluctuations in metal prices? There are many factors which affect the pricing of scrap metals. The surest way you will ever have a rough idea on current scrap metal prices is by making a call to the operators of your scrap yard and getting their price list.
There are several factors that determine the prices of scrap metal. Some of these factors include:
- The Location of the scrap metal business. There are areas that are far away from refineries and big cities. Areas where metal refineries don’t exist in. In such areas such as the rural areas, the competition for scrap metal is quite low making their prices pathetically low. However, in cities where there is a huge demand for scrap metal and high competition for scrap metal, the pricing of scrap metals is quite high. In order to beat the locational barriers, many scrap metal businesses are trying to sell their scrap metals through online portals such as e-bay and amazon. The major challenges with this is that there is a lot of competition from around the world, high transport costs which include shipping and handling charges. You will also take lots of time in handling and processing other legal documents needed with such transportation.
- The Type of metal: Scrap metal comes in different types. There are scrap copper metal, scrap lead metal among others. They can be further categorized in terms of their grades and weights. Understand well that your metal will be priced according to its type.
- The quantity of a given scrap metal heist. With scrap metal collection, the theory works simply that the more the quantity of scrap metal you collet, the more earnings you are able to get. A business dealing in scrap metal can use this theory to its advantage by keeping scrap metal as they are collecting until it is sizeable enough to earn good returns.
- The current market value of scrap metal. This is also known as the current spot metal prices and refers to the prices of newly refined metals. The more cash a refinery is able to make from scrap metal, the more the amount of money that you can sell your scrap metals for.
As a business dealing in scrap metal collection, the price under which you are paid will always be dependent upon other factors such as the type of scrap metal you are selling, where you are selling you scrap metal, its pricing after it has been refined and the quantity of scrap metal you are selling. A good point to also note is that most of the times, scrap metal is measured in terms of pounds.