Plenty of items that are discarded by households can be used constructively and for generating good revenue. People who are into the scrap business use these discarded items to make new products that could sell.
Selling scrap is not just about making money and making calculations using things like the closing stock formula, but it can also be an environmentally friendly way of recycling waste material.
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There are many items such as laptops, mobile phones, and CPUs that can be recycled and resold for a profit and it will also save our environment from getting polluted. We are surrounded by several kinds of waste material daily. Some examples are:
- Metal waste like iron, aluminum, tin, brass, copper, etc.
- Paper waste like newspapers and magazines.
- Glass bottles and jars are made up of glass and ceramic.
- Cardboard boxes and other paper packaging materials.
- Plastic bottles, containers, and thermocol pieces are used for packaging purposes.
- Electronic devices like computers and printers are used for business purposes or domestic use respectively.
What is the Right Business Model for Scrap Business?
Scarp business can be run in two ways:
Many companies manufacture products from scrap like iron, steel, rubber, etc. They buy these scraps from different sources and then process them to make useful products. In this way, they help in clearing the environment of these useless things and also help in recycling them in a useful way. To sell their products they need dealers who work on a commission basis with them. So, this is an easy and relatively cheaper way to start a scrap business.
You can buy a bulk amount of scrap from different sources and then process them to make useful products yourself. You can sell the finished product directly to the market or you can appoint dealers to sell the product for you and earn commission through them.
What are the Steps to Start a Scrap Business?
Below mentioned are a few steps that help you understand how to start your own scrap business:
1. Choose the Right Location for Your Scrap Business:
You need to choose the right location for your scrap business so that it is easily accessible and people can find you without any difficulty. You should also make sure that your location has proper storage facilities so that you can safely store all the scraps.
2. Know Where to Collect Scrap
You need to know where to gather your scrap materials from. You may want to start with a small company that generates a lot of waste and then moves on to bigger companies if you wish to expand your business later on. Many companies specialize in maintaining waste for recycling purposes. This could be an excellent source for collecting scrap material for your business. You can also rent warehouses or storage areas for gathering and storing the scrap materials before selling them off.
3. Know How to Collect Scrap
You need to know how to collect scrap. The methods of collecting scrap include buying the scrap and taking it on a payment basis. You can take the scrap on a payment basis if you think that it would be difficult for you to pay money for the scrap in advance. A lot of people prefer taking the scrap on a payment basis because they don’t have enough money with them to buy all kinds of scraps. However, when it comes to selling the scraps, they charge a higher price than what they paid for it.
4. Permissions and Approvals
No licenses are required to start this scrap business in India. You just need to take permits from the municipal area where you are planning to open your shop.
Some of the important permissions you will require in the scrap business include:
- Shop Act License
- FSSAI License
- Trade License
- GST Registration