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How much profit do the scrap yards make per pound? - Page 2

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  1. #21
    RustyDollars's Avatar
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    There are a lot of posts in this thread that are misusing the terms profit and margin.



    Margin is the percent difference between what the yard pays per lb and what they sell per lb.

    Profit is the percent of the margin they have left after all expenses.

    A well run efficient yard can operate on a smaller margin (offer you more) and still make a better profit than an inefficient yard in most cases.
    If it wasn't for the $ in $crap, it would just be.....

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  3. #22
    msmoorad's Avatar
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    i go to the biggest scrap metal company in the area cos i know the other guys sell to them
    therefore they offer the best prices with regard to the general public.

    the smaller guys always tend to pay a bit less than the big companies.
    although, sometimes u can get a better rate at the smaller yards if u are a regular & speak to the owner & you guarantee him that you will bring in X amt of steel, copper etc on a regular basis,

  4. #23
    mikeinreco's Avatar
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    Small yard i deal with says he is satisfied with 1 cent per lb profit on shred....does this sound correct?

  5. #24
    APA's Avatar
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    Gross profit or net profit? There is no way a yard can servive on 1 cent gross profit.


    Quote Originally Posted by mikeinreco View Post
    Small yard i deal with says he is satisfied with 1 cent per lb profit on shred....does this sound correct?

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  7. #25
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    Quote Originally Posted by APA View Post
    Gross profit or net profit? There is no way a yard can servive on 1 cent gross profit.
    I could only assume this is what the "pure profit" is after all the bills are paid.........still seems a bit low in my opinion

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  9. #26
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    Even at net is seems low, but if it is the pure profit at a penny per pd. it would be worth it. If a gondola car can haul 75 tons or 150,000 pds @ .01 equals $ 1,500 per car. So after paying depreciation, wear and tear on equipment, providing employees with pay, ins., SS, etc. paying for hauling trash, interest on loans, taxes, as well as consumables the company makes $ 1,500 per load. Assuming this is a 3 million dollar facility (strictly arbitrary) selling one car of scrap per day provides a return on investment of 18%. $ 1,500 x 365 / 3,000,000. This would be after all expenses. Six year payout. Now as a devil's advocate, I doubt their margin spread is this tight.
    Give back more to this world than we take.

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  11. #27
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    If you make .15-.25 profits on aluminum, .20-.45 on copper and brass and so on it's very plausible to run a low profit on iron. In Patriot's math at a lot of smaller yards that would cover payroll for the day even at 75% of those numbers. .01 does seem slim but not wildly so, especially if their focus is non-ferrous.

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