3 ways to profit from low scrap prices
Scrap prices are not as good as they used to be! I've seen lots of posts on the forum about the low local metal prices, and wanted to share a few ideas to help you guys actually capitalize on some of the not so obvious opportunities that are created during these times.
Have you ever heard of Schnitzer Steel? One of the largest metal recycling companies in the US with locations all across the country.
It was founded in 1906 by Sam Schnitzer, who was a ONE MAN operation at the time.
A large majority of our members here are "one man operations" just like Sam Schnitzer was...
Now how many years since 1906 do you suppose prices were "less than satisfactory"? Probably more than you'd like to think!
The key is that in order to succeed (in any business) you need to see opportunities where others do not.
Schnitzer Steel » History
So in light of the "great scrap depression", I wanted to share 3 different ways you can actually CAPITALIZE on the low market.
1 - Solicit to new businesses in your area.
There are a couple reasons for this (And yes, I specified 'new' businesses).
First reason is because since scrap prices are low, new businesses are more likely to see their scrap metal as an expense or a hassle rather than a profitable revenue stream. The second reason is because you have LESS COMPETITION soliciting to businesses in your area.
Get your foot in the door now and be the lucky guy/gal who owns the new clientele when scrap prices return.
2 - Stockpile and purchase if you can predict an upward trend.
This is one of those 'buy low, sell high' scenarios. Chances are that scrap will at some point go back up, metal is a commodity and fluctuates with the market just like anything else.
Unfortunately scrap takes up a lot more space than other investments so it's not quite as simple as buy and sell, but if you have the means to do so, times like these are as good as gold. Pun intended.
3 - START CHARGING and/or increase your fees!
This is something we see discussed fairly frequently here on the forum regardless of where prices are at, and it's something everyone must be prepared to do if you want to be successful in this business.
I understand that most people get into this business offering "FREE removal" of everything, which is great, but if something IS NOT going to pay you what you're worth, you need to charge a fee to make up for the difference.
If they don't accept your fee. So what... At least you didn't lose money, right?
People still need your services regardless of what prices are at. And believe it or not, most people who want your services haven't got a clue about metal prices anyway, all they know is that people want it. If they knew about the prices AND had the means to recycle, 90% of them would be doing it themselves.
If you have to charge someone $30 for a quick local pickup to make $20/hour and pay for gas, charge them $30 or don't take the scrap!
That's all, just wanted to throw out a few ways everyone can actually BENEFIT from low scrap prices.
