New Yard & Portable Shredder Advice Needed

Are you aware of the price of putting in a rail spur? Especially off a main line? You would be better off to find property with an existing spur, unless you have several hundred grand for building the spur.

My hats off to ya if you can make a go of it! I've heard of guys starting off with non-ferrous and building up to the whole meal deal over the course of a few years. Your idea of smaller portable machines seems to make sense, too. But you probably need to start with thoroughly used equipment and learn to fix it yourself to keep costs down rather than go with top of the line new right away.

I've seen the combination magnets/orange peel grapples...haven't talked to anyone about their pros and cons. But the magnet is real good at separating the non-ferrous stuff that lands in the steel yard but is worth more to you if someone picks it up and gets it into your non-ferrous side.

Good luck!!



Jon.

Based on the questions you are asking you don't know anywhere near enough to run a scrap yard with a shredder.

The most glaring problem is that your profit estimates are way off reality. A well run ferrous scrap yard with a large shredder has a net profit margin of 10% or lower. Even a well run yard can lose money over a number of months or have a bad year.

The best way for you to properly learn the business is to start as a feeder yard for a larger yard with a hungry shredder. After a few years learning the in and outs of the business then you could consider moving up to acquiring a shredder.

You should read this American Recycler article on shrinking profit margins in the scrap yard business. One problem nationwide is that there are already too many shredders installed.

American Recycler News, Inc. - Dealing with shrinking profit margins

Also read this SMF thread:

http://www.scrapmetalforum.com/gener...rks-oh-my.html



If you insist on going forward please put together a full blown business plan and have it vetted by some sucessful business people. Also take some time to look into and visit scrap yards that are up for sale. And look into yards that have gone out of business and why they are defunct.