How to open a scrap metal purchase. How to open a scrap metal collection point

Many types of entrepreneurial activity, for example, the scrap metal business, simply escape the sight of novice entrepreneurs, although with moderate investments they can make a very good profit.

• What documents are needed to open a scrap metal receiving business?
• How much money do you need to start a scrap metal business?
• How much can you earn from accepting scrap metal?

A scrap metal collection point is a male-dominated field of activity that allows you to earn large sums all year round, even during a crisis. The most important advantage of this business line is that in this case huge capital investments are not required, but the return is very good.

The scrap metal collection point will be profitable in any case. But as for how to make money on it, the main factor should be minimal competition. This should be an important consideration when choosing a place to do business.

Those entrepreneurs who are going to open a scrap metal collection point in rural areas should expect the least income, but in a large industrial city the profit will definitely be impressive.

The business itself (reception of scrap metal) is unusual. Most often, entrepreneurial activity consists of selling a service to a consumer and receiving money in return. In the case of scrap metal, everything happens differently, since here clients bring metal, and the businessman gives them a certain amount for it. The amount of payment depends on the type of metal and current prices for it. They change frequently, so accurate calculations can only be made depending on the situation.

What documents are needed to open a scrap metal receiving business?

Without a clear business plan, it will simply be impossible to achieve success. When it comes to a scrap metal collection point, there are no special requirements, but laws and basic rules must be followed. For example, some “businessmen” believe that officially registering their item is not profitable. Therefore, they disguise it as a personal warehouse or garage. But this entails considerable fines, so if a businessman is determined to work in this area for a long time, he should officially register everything.

As for how to open a scrap metal collection point, first of all you need to obtain a license. All this is not expensive and does not take much time. To do this, employees of government agencies must provide a passport or other documentation for the equipment, documents on personnel qualifications and a receipt for paying for the license. In addition, an entrepreneur will need a personal passport and TIN code to register as an individual entrepreneur.

How much money do you need to start a scrap metal business?

As for investments, metal collection as a business will require huge sums; experienced businessmen claim that at the initial stage investments will not exceed 2 thousand dollars.

The payback in this case depends solely on the type of settlement and competition. Some businessmen manage to return their starting capital within a month, while others wait three times longer.

Even if a businessman plans to open a large collection point for non-ferrous metals, he will definitely need special equipment for the work, but there should not be large expenses. Nowadays, it is very convenient to lease or rent equipment. This turns out to be much more profitable than purchasing dump trucks and scales. An alternative option would be to purchase equipment on the secondary market, but such devices will not work for long and will definitely need to be replaced over time.

Experienced businessmen regarding how to make money at a metal receiving point say that for the normal operation of the point it is enough to have a metal press, a reloader, a couple of dump trucks and scales designed for large volume and weight. All this is convenient to rent.

How much can you earn from accepting scrap metal?

It has already been said above that the metal business is very different from many other types of entrepreneurial activity. Here the businessman pays his clients. But the benefit is that the population accepts the metal at one price, and then it is sold at three times the price.

The price for collecting scrap metal is set depending on the cost of a ton of metal. Black is accepted by wholesalers for one amount, and color is 4-5 times more expensive.

An interesting option would be to use aluminum cans. Now there are many companies in the country that use recycled aluminum raw materials to make products that are in demand by consumers. They even buy aluminum cans in bulk. The receiver can set a minimum weight for receiving raw materials, so as not to waste time on every kilogram.

The price that a businessman sets for collecting metal will affect the amount of profit. However, you should not reduce it excessively, as this can cause you to lose customers and lose your entire business. If you properly promote your scrap metal collection point, you can make a profit of up to 30 thousand dollars a year.

If an entrepreneur chooses this type of business for himself, he is unlikely to be able to cope on his own. Most often, relatives who will be honest are hired as assistants, because in this area it is difficult to control the entire work process. Workers should be prepared to work at night, as scrap metal supplies are especially active at this time. There are no days off at the scrap metal collection point, so there must be several acceptors.

It is quite possible that several employees will work at the same site. For example, if the total area is about 500 square meters, it will be difficult for one receiver to cope. The average salary for hired workers at a scrap metal collection point is $200, so finding staff will not be difficult. Honest assistants in this matter are an important component of business success.

I agree that at first this idea may seem strange on the one hand, and unprofitable on the other, but if you look closely at it, analyze all the nuances to the smallest detail, it turns out that this business is very attractive and very profitable. Metal almost literally lies under our feet, but not every person wants to make money from it, or, in extreme cases, simply does not know about this profitable business.

A scrap metal collection point can bring very good profits. This business is good because it will never fail, because metal in our days was, is and will be, and people who want to earn at least a penny will, albeit little by little, still bring scrap metal to the collection point. This project does not require large investments and can be undertaken by absolutely anyone, with absolutely any education.

What does it take to open a scrap metal collection point?
First, you need to find a premises where metal will be purchased from the population (you can accept metal at home in the garage, you can buy a premises for transporting metal, etc.). Secondly, you need to find a vehicle that will transport the metal to an organization for the purchase and processing of metals (if you don’t have personal transport, you can enter into an agreement with an organization involved in cargo transportation, or lease a car).

Thirdly, you will need scales (preferably electronic, as they will more accurately show the weight of the metal; two types of scales are needed - floor scales, for weighing ferrous metals, and wall-mounted scales, for weighing non-ferrous metals). You will also need metal scissors (or special metal cutters) and a press for baling scrap metal. Scissors and a press are not necessary conditions for opening a scrap metal collection point.

Fourthly, we need staff. Usually this is a truck driver, 3-4 loaders and an accountant (the one who weighs the metal).

Fifthly, you need to register your business, at least as an individual entrepreneur, but also as an LLC, the main thing is that there is state registration, otherwise there may be big problems with executive authorities.

Marketing system or how to attract clients!
Before opening a scrap metal collection point, you need to find suppliers who will sell you metal (this can be private entrepreneurs, any organizations or the general public). I agree that immediately after the opening of the collection point, mountains of metal will not be brought to you, but they will still deliver it. First you need to place advertisements on banners, newspapers and bulletin boards. Gradually, people will be drawn to you who are not averse to handing over metal to your enterprise.
You will have to prove yourself as an honest and high-quality entrepreneur (I know from my own experience that at almost any enterprise that buys scrap metal, entrepreneurs turn up the scales, that is, for example, you brought 1 ton of ferrous metal, but the scales will show that there is only 850 kilogram) and then not only the population, but also private entrepreneurs and organizations will flock to you.

Of course, this business will not immediately bring huge profits (this simply does not happen), because you need to start small, for example, buy metal from people by the kilogram, and then hand it over to a recycling center in wholesale quantities of ferrous and non-ferrous metal. And over time, you will receive many orders for receiving metals, and then the turning point comes when the business takes off.

Next, you will need to find companies that have agreed to buy scrap metal from you in bulk. Travel to various scrap metal purchasing organizations, look at the price, quality of service and choose what is right for your organization.

Where can I get the money and how much does it cost?
There is grant support for entrepreneurs in the Russian Federation! Don't miss your chance, if you really decide (after weighing all the pros and cons) to open a scrap metal collection point, then go ahead! If you look carefully, this business idea does not require large investments. Let's start with the premises. If you decide to rent a folding room, then it will cost you 20-30 thousand rubles per month (it seems to me that this is not too expensive).

Salaries to employees will cost you 10-15 thousand rubles per month, which is also not that expensive. The most important condition: timely payment of wages is the key to successful work of staff.
Equipment, including a truck, scales and scissors will cost you about 100 thousand rubles.

Let's summarize.
to open a scrap metal collection point you will need approximately 120 -140 thousand rubles
Project payback.
One car trip can bring in income of about 15 thousand rubles.
Annual revenue can amount to a good round sum (depending on how much metal was sold). On average, this is 550-700 thousand rubles per year. That is, if the organization works properly, the payback for this project will be several months after the opening of a scrap metal collection point. The most important thing is to remember the competition and set a competitive price, taking into account the real cost of this product on the market.

A scrap metal collection point is a profitable business that requires minimal cash investment to open. This segment of small business is practically not susceptible to the economic crisis, which makes it one of the most reliable ways of investing. With proper budget allocation, you can open a profitable enterprise on your own.

Business Features

The main feature of organizing a business for accepting scrap metal is its demand. The products on which it depends are included in the list of materials that pollute the environment. Therefore, problems rarely arise with finding raw materials for processing.

Having your own scrap metal collection point has a number of advantages:

• there is no need to look for suppliers - people bring the material themselves;
• the volume of products received does not depend on seasonal conditions;
• Metal collection is practically not connected with the state economy.

This type of business is well suited for people who do not have entrepreneurial experience. But without a competent person, the success of implementing an idea is minimal.

He will tell you how to draw up a business plan yourself.

The basic plan for opening a scrap metal collection point includes the following steps:

• and distribution of funds;
• preparation of documents and business registration;
• choice of taxation system;
• choosing a location for placing a metal collection point;
• purchase of equipment;
• development of a scheme for selling products and paying clients;
• and employee employment.

Before you begin implementing a business plan, you need to carefully study the intended market and competitors. Analyzing the activities of similar enterprises that have not achieved success in this area will help to avoid major mistakes.

Documents and registration of metal receiving business

To open a scrap metal collection point, you must obtain an organizational and legal form. A more profitable option is the status (Individual Entrepreneur). (Limited liability organization) is recommended if you plan to jointly own a business, or open several locations. You can find out more about the difference between individual entrepreneurs and LLCs.

Registration of a scrap metal collection point is a prerequisite for running a business. In case of its absence, the activity is considered illegal and is prosecuted by law.

The license is issued by the regional executive body. In large cities it is usually easier to obtain. This document allows you to perform work on:

• metal collection;
• storing products in a warehouse;
• scrap metal recycling;
• resale of collected scrap.

To obtain a license, you must provide a package of documents including:

• passport;
• equipment documentation;
• a certificate confirming that employees have appropriate qualifications;
• receipt for payment of the license fee.

Granting a license to open a ferrous metal collection point is faster. Non-ferrous metal provides a larger net profit. But registering an enterprise for collecting these products requires more time and money.

In accordance with current legislation, collecting scrap metal is prohibited even if the necessary documents are available, unless a license has been issued. The purchase of products is possible if its owner has provided identification documents.

Tax system

Owners of a scrap metal collection point can take advantage of the patent system if they have individual entrepreneur status. Its use is allowed if the business is based on processing products. Resale of metal in its original condition is not possible.

When opening a metal collection point, it is recommended to use a simplified special mode. Its main advantage is that the tax amount is directly related to income. If there is a small profit, the tax rate is 6%. If there is a stable income in large quantities, the tax rate increases.

OSNO (General System of Taxation) in this case is less profitable, since it requires separate maintenance of tax and accounting records. (Simplified taxation system) also includes mandatory accounting, but its submission is required no more than once a year.

Business Starting Costs

To open a metal collection point, a starting capital of 300,000 rubles is required. This amount is relevant for settlements with a population of 15,000 or more people. From it you will need to spend:

• 30,000 rubles – for renting premises;
• 50,000 rubles – for the purchase of production equipment;
• 70,000 rubles – for paperwork and registration of the enterprise;
• 20,000 rubles – for the organization and implementation of a marketing program;
• 50,000 rubles – as insurance capital.

The following must be allocated monthly for business maintenance:

• 50,000 rubles – to pay transportation costs;
• 60,000 rubles – for employee salaries;
• 30,000 rubles – to extend the lease of the premises.

The amount of expenses varies depending on what types of work are performed at the enterprise and what equipment is used for this.

Scrap metal collection point location

The location does not play a significant role for the scrap metal collection point. A more important factor is the number of people living in a locality. The larger the city, the higher the profit. Accordingly, income is lower in villages and villages.

The most profitable solution is to open a metal collection point in an industrial city . With a large number of factories and enterprises, the demand for products increases.

When choosing a room to locate a scrap metal collection point, you should focus on industrial zones or places near factories. Firstly, it will simplify the marketing of products. Secondly, it will help avoid complaints from local residents about the noise created by the enterprise. Thirdly, renting premises in an industrial zone costs less than in other places.

The minimum room area for a metal collection point is 25 square meters. To organize an enterprise, two conditions are sufficient: the availability of heating and electricity.

If a small architectural form is being installed, a number of additional documents and permits from government authorities are required, so this option is not recommended.

Necessary equipment

The basic list of devices used to work with the material consists of:

• mounted and floor scales;
• magnets for studying the composition of products;
• press;
• loading device;
• gas cutting tool for metal.

At the initial stage, in order to save money, it is allowed to work without a press. Instead of a loading machine, you can hire loaders.

Additionally, a truck will be required to transport the material. In some cases, it is more profitable to use the services of transport companies, depending on how often the transportation will be carried out.

What prices should I set for scrap metal?

The cost of metal is regulated depending on the locality. First you need to study the pricing policies of your competitors. The more profitable the payment for the material, the more customers will pay attention to the new metal collection point.

Average price is:

• from 6 to 8 rubles per 1 kg of ferrous metal (depending on quality);
• from 240 to 260 rubles per 1 kg of copper;
• from 160 to 180 rubles per 1 kg of brass;
• from 50 to 70 rubles per 1 kg of aluminum;
• from 45 to 55 rubles per 1 kg of lead;
• from 115 to 125 rubles per 1 kg of titanium;
• from 125 to 135 rubles per 1 kg of bronze;
• from 45 to 50 rubles per 1 kg of stainless steel.

The markup on product sales can be up to 100%. It is recommended to sell ferrous metal at a price three times higher than the purchase price.

How to organize the sale of scrap metal and settlements with clients?

The client base is compiled after registering an enterprise and obtaining a license. It includes two categories of consumers: large organizations and individuals. The main profit can be ensured by concluding contracts with metallurgical plants.

When compiling your customer base, you should contact all possible businesses. Scrap metal collection points are allowed to work with organizations located in other regions.

Another option is to resell the products to other scrap metal collection points. This method is reliable, but has a significant drawback - the minimum profit margin.

If you have positive reviews, a good reputation, and a competent marketing program, the required number of clients will be gained faster.

An affiliate program with a well-known company will allow you to trade with the largest factories in the country. You can learn more about the capabilities of such programs by watching this video:

Staff

Additionally, you should hire a watchman to guard the collected material. To increase profits, you can organize the operation of the enterprise around the clock. But for this the staff will need to be increased to four people.

Employee salaries

The disassembler is engaged in complex work physically and technologically, so his salary must be appropriate. Depending on the work schedule, it ranges from 15,000 rubles.

The receiver's salary is formed as a percentage of the profit. This method is used because the person in this position is unsupervised and can freely carry out fraud. If he knows that the profitability of the business and the size of his own wages depend on him, the risk of manipulation when accepting metal is minimized. Within two weeks, a receiver can earn up to 20,000 rubles.

The watchman receives a fixed salary for the region depending on the responsibility assigned to him. The current salary of a watchman ranges from 9,000 to 18,000 rubles.

Profitability and profit

At the initial stage, the enterprise is unprofitable. With normal development, one trip of a car loaded with metal can earn from 15,000 to 25,000 rubles. The average payback period for an enterprise is up to 6 months.

In the first year of work, with standard business development, you can earn from 600,000 to 750,000 rubles. This amount is relevant when working with ferrous metal. Revenue can be increased depending on the volume of non-ferrous metal supplied.

A scrap metal collection point is a profitable business with the right approach. But its implementation requires a mandatory license and experience in this field. If one of the points is missing, the likelihood of business success is reduced to a minimum.

In each locality there are several scrap metal collection points, the owners of which receive fairly high profits.

Many of them operate illegally, so they may close after the first official inspection.

Peace of mind in work is achieved by obtaining a license to accept and trade scrap non-ferrous and ferrous metals. When properly and consistently organized, dealing in scrap metal is a chance to regularly make big profits.

Setting up your own business

One of the main stages of dealing with metal is registration as an individual entrepreneur. In cases where collection, reception and trade are planned to be carried out with a partner, it is necessary to register a “limited liability company”. This business requires the presence of an appropriate document - a license, without which it is almost impossible to work even at the first stage of entrepreneurship, which involves collecting and receiving material.

You can apply for a license at the local executive body. Many people are faced with the problem of obtaining official permission; there are no guarantees that it can be issued even if the necessary documentation package is fully and correctly collected. This is primarily due to the fact that trading these materials is a profitable business: monthly profits can reach up to $10,000.

Opening a metal collection point

When deciding to open your own metal business, you need to find a company that buys scrap metal in large quantities. Such organizations carry out self-pickup using freight transport. After completing the partnership agreement, you should familiarize yourself with their price list for ferrous and non-ferrous metals. Next, open a reception point and set your own prices, which should be lower than the price list. If a base specializing in wholesale purchases sets the cost per kilogram of ferrous metal at $0.3, then receiving 1 kg at its own point should correspond to about $0.2.

The location of the point where scrap metal trading is planned can be in any part of the locality, the main thing is a spacious warehouse or an extensive area. The best option for a businessman is to own a warehouse for receiving and collection; renting space is unprofitable, especially in the initial stages of developing your own business. If there is a plot of land or a garage, then a reception point can be organized on this territory. It is worth considering that this process can create quite a lot of noise, which most often causes dissatisfaction among local residents.

The optimal location option is near industrial enterprises that have ceased operations.

In this case, even renting a room will cost little money. Basic requirements for the working area:

• availability of electricity and heating;
• certain area – 20–30 sq. m.;
• area for unloading and loading metal by freight transport.

Required equipment

Reception of material is impossible without special equipment, which includes several mandatory items:

• metal scissors;
• scales of various types: mounted, for weighing raw materials weighing more than 1,000 kg, floor-mounted;
• press unit

In order to correctly determine the species composition of the metal, you will definitely need a magnet. Platform scales can be either electronic or mechanical, the main thing is proper installation and verification of accuracy. If there is no agreement with a company specializing in cargo transportation, then you need to rent a truck for the purpose of transporting raw materials to wholesalers.

Over time, the vehicle can be purchased.

Nuances of work

To purchase metal from the population you will need about $1,500–2,000. The collection of raw materials at the first stages of work will not be large-scale, but as the collection point continues to work, it will begin to acquire its regular customers, which will affect profits.

The reception of metal can be organized by the entrepreneur himself, and if desired, employees can be hired. Some businessmen avoid this due to the extra costs of paying wages, as well as the dishonesty of the staff in terms of the possibility of making money on underweights, as a result of which the client will subsequently take the scrap metal to a competing collection point.

It is necessary to contact wholesale warehouses that carry out cargo transportation when collecting 10 tons of scrap metal. At the metal depot, the loaded vehicle is weighed and the weight of the vehicle itself is deducted. The final figure is the weight of the metal. It is worth considering that such material is divided into several categories, each of which has its own cost. The price directly depends on the quality of the raw materials.

Costs and profits

Obtaining a license to accept various types of metal is the most important stage in the development of a successful business. To speed up the process and get a guaranteed result, it is best to use the services of professional lawyers. A document for dark metal costs about $500, the same amount will have to be paid if you plan to receive a colored one. The entire paper process will take from 30 to 60 days. Each entrepreneur decides for himself whether a license to receive and trade is needed or not. It all depends on financial capabilities, connections, and much more. etc.

The main expense when starting a scrap metal business is renting a site if you don’t have your own. Warehouse space will cost 30,000 rubles. per month. If workers are hired, then monthly expenses increase by another 12,000–15,000 rubles. to each. All necessary equipment, including cargo transport, can be purchased for 80,000–100,000 rubles. Thus, an amount of 200,000 rubles will initially be required.

The profit from one vehicle sent with cargo to wholesalers is about 15,000–18,000 rubles, that is, the annual profit is approximately 750,000 rubles. All initial investments, with well-organized work and an advertising campaign, will be returned 4-5 months after opening.

For any type of business, the main goal is profitability. A metal trading business will not be an exception, since this is precisely why the entrepreneur invests money and spends his energy. The main thing in this matter is to choose the most suitable field of activity for yourself, draw up a clear business plan and take into account various factors that can negatively or positively affect further work and income generation. If a businessman decides to engage in such a complex business as metal trading, first of all he will have to take care of drawing up a clear business plan, a premises with the necessary equipment and the selection of qualified employees.

• Where to start your own business selling metal?
• Registration and registration of a business selling metal
• Will ferrous metal products be in demand?
• What metals are best to trade? Product range
• How much can you earn from metal trading?
• How much money do you need to start a business?
• What equipment to choose for metal trading
• Which OKVED code should I indicate when registering?
• Do I need a permit to open a metal trading business?
• Sales technology

Where to start your own business selling metal?

Metal trading is a complex business and requires careful preparation before investing. First of all, you need to study the market and understand which products are most widely represented and which are in greatest demand. This will allow you to analyze the competition and calculate investments with return on investment.

Obtaining information about companies that occupy this niche is an important condition, since the product must be competitive in order for business activities to bring the proper profit.

In any case, seasonality plays an important role. Selling metal is no exception. It is important to take into account that at certain times of the year the sale of metal products (for example,) will be more active. This is due to the fact that construction opens much more often during the warm season.

An important issue is the markup that an entrepreneur can set on his product. In order to understand the approximate cost of the metal, you need to monitor prices taking into account all nearby competitors. In addition, it is worth viewing data from the World Wide Web. On the websites of metal sellers you can find a lot of interesting information that will be useful when organizing a business.

Once these issues have been resolved, you can start looking for premises. It should be large and best of all, if it is an industrial zone. It is necessary to immediately select qualified personnel. A significant part of the success of the entire enterprise depends on the work of hired employees, so everyone, from the loader to the manager, must do their job efficiently.

Think before you decide to open a business, weigh the pros and cons. Perhaps another type of activity is more suitable for you, for example, opening a coworking center. We invite you to read more about correct investment money and make money from it.

Registration and registration of a business selling metal

You need to register with the tax office and the Pension Fund. In the Federal Tax Service, it is better to choose the legal form of individual entrepreneur, which will allow you to minimize tax reporting. It is mandatory to register with the Pension Fund and the Social Insurance Fund, since without this it will not be possible to officially hire employees.