Maximize your ROI by focusing on marketing, efficiency, and the right materials.
As a scrapyard owner, you likely encounter dozens of tidbits of advice every day. There are endless tactics, strategies, and “hacks” you can consider to boost profitability. At times, it can be downright overwhelming: How can you possibly know which ideas are worth your time?
Thankfully, you don’t need to chase down every tiny action item to build a profitable business. If you’re focusing your attention on the most effective strategies, you’ll see results.
Today, we’re talking about the three biggest success factors driving a profitable scrap yard business: marketing, profitable materials, and efficiency.
Learn and apply the basics of marketing.
Marketing is a bit like cooking—there are endless sophisticated techniques and tools out there. But you don’t need all of them—or even most of them—to make a great meal. If you master and consistently implement a few of the basics, you’ll be way ahead of the competition.
In the scrapyard business, you don’t need a Pinterest account or an expensive marketing video to reach your audience. You also don’t want to spread yourself too thin and put half-hearted effort into too many channels. It’s much better to master a few key tactics and remain consistent.
Over time, you’ll develop your own marketing plan based on your audience and your unique business. But if you’re just starting out, focus on these two things:
- A clean, modern, easy-to-use website. If your website is disorganized and outdated, people may assume incompetence. It’s worth spending a little extra time and money to achieve a truly professional look. Stay away from garish colors, novelty fonts, and animations. And make sure the important stuff—hours, location, what you accept, contact information—is easy to find.
- Create and maintain a profile on Google My Business (GMB). Most people think only of Google when they’re conducting an online search. If you’re active on GMB, you’re more likely to appear in their searches. After all, it is a Google product.
Once you’ve established a solid web presence, you can experiment with other marketing tactics. Here are a few of our favorites >
Focus on profitable scrap materials.
This may seem obvious, but it’s surprisingly easy to overlook this key factor to ensuring profitability. You can’t make a meaningful profit if you’re accepting materials with bad margins.
Take a close look at how much you’re making on every type of material you accept. Don’t forget to account for time spent marketing, processing materials, and managing inventory. Consider your space limitations, too. If you stop accepting low-profit materials, you can clear up valuable floor space for the big earners.
If the data isn’t clear right away, watch the numbers for a few months. Good inventory management software allows you to set up custom reports, so you can keep an eye on trends. Over time, you’ll probably spot a few patterns that can help you identify which materials are most profitable. This will make it much easier to cut the underperformers, so you can focus your energy on the greatest ROI.
Run an efficient business.
As a scrapyard business owner, you should know exactly where your money is going. If you neglect the books for too long, needless costs can begin cutting into your profits. It’s on you to keep an eye on things and ensure that every dollar is spent with purpose.
Take a close look at your expenses and see if there’s anything you can change or eliminate. You might also consider the ROI of certain expenses, such as marketing costs. If a certain tactic is ineffective, you might cut it—or funnel that money toward another marketing channel.
You should also consider efficiency in terms of time and talent. Is your team wasting time with outdated processes and procedures? For example, are you relying on analog systems when digital would be faster?
Many scrap yards see a major spike in efficiency when they upgrade to truck scale software after years of paper tickets. Truck scale software also comes with better, faster inventory systems. Up-to-the-minute inventory reporting empowers you to make informed purchasing decisions.
In other words, don’t just work in your business; work on your business. Take time to step back and ask questions about how you’re doing things. Even just one slight change to operations can yield major dividends.
Jumpstart profitability with the right technology.
You don’t need a degree in computer science or multiple complex systems to start working on these action items. All it takes is one good software program.
Scaleit delivers the custom reporting, cutting-edge inventory management, and fast processing you need to step up your game. And our team will train you on every function, so you can get your system up and running right away.
Schedule a demo