A go-getter mentality can make a huge difference in the success of your scrap yard business.
Imagine this: You’re an entrepreneur, and you’re opening up a scrap yard. You’ve got the space, the software, and a logo, and you’re ready to go—but your yard is totally empty. You’re itching to start selling, but you have nothing to sell.
That would be a bit shortsighted, right?
But here’s the hard truth about running a scrap yard: It would be just as shortsighted to wait around for materials to come to you. This is especially true in the early days.
If you’re serious about making it in this business, you need to be proactive about getting materials yourself.
Thankfully, sourcing materials doesn’t have to be all that difficult. It starts with building relationships and being smart about where you might find what you need. Here are five ear-to-the-ground ideas for sourcing materials to grow your scrap yard business:
Build relationships with local businesses.
Much of your material will come from local businesses—but only if they know you exist. So get out there and start making friends. Go to business luncheons, visit the chamber of commerce, and stop by every booth at local fairs. Be especially proactive about construction companies, materials companies, and other businesses that may produce a lot of scrap. You may also consider companies that are likely to have spare parts lying around. You can clear up a lot of warehouse space for them by taking those parts off their hands.
Don’t discount a connection that seems irrelevant—they may be able to make a great introduction down the line. The grapevine can be an incredibly valuable source of information. So make sure you’re tapped into a strong one.
Build relationships with other scrap yards.
This may seem counterintuitive, but you should build relationships with your competitors, too. This is especially true for scrap yards that take different materials than you do. They can tip you off if they encounter a goldmine of your preferred materials. Plus, there may be times when they’re at capacity and need you to take the overflow.
Keep an ear to the ground on renovations and building tear-downs in your area.
Demolitions and renovations produce an incredible amount of scrap material. And all that stuff has to go somewhere.
Stay in touch with construction and demolition companies. Make sure they know exactly what you’ll take. And talk to them about how to make the transaction as easy as possible. Many construction and demolition projects happen in small spaces, and finding somewhere to put all that scrap can be stressful. You can save them a lot of time and headache by hauling all that scrap away yourself. Of course, some may prefer to drop off material themselves. But many will be thrilled to let you handle it for them. If you do it well, they’re likely to call you again in the future.
Stay in touch with your suppliers.
Even as you strike up relationships with new suppliers, don’t forget about your current ones. Those relationships are very important to maintain since they can be your greatest advocates. And you don’t need to be a sales pro to do it.
A friendly phone call or email every so often is all it takes. You might even consider a holiday card or small gift to make them smile. And of course, make sure you’re easy and stress-free to work with. When your suppliers hold you in high regard, they’re more likely to refer you to other potential contacts.
Consider taking new and different materials.
Some scrap yard owners don’t bother with certain materials because the profit margins aren’t particularly high. However, choosing to accept these materials, such as paper and plastic, can be a great strategy for attracting new customers.
Let’s say you’re one of three different scrap yards within driving distance for a customer. The differences between you and your competitors are minimal—but you accept a wider range of materials. Your customers can save themselves a trip by simply unloading everything with you rather than going to two different yards. In other words, by taking more material, you become the more convenient choice.
Another thing to consider: Being open to new materials can increase your value to a wider variety of customers. Those accounts may be smaller in the beginning, but over time, they can grow. Accepting less profitable materials can yield much greater overall profits in the long run.