South Carolina researching scrap business

Hey Guys:

I am from South Carolina. I am in Law Enforcement and obviously, I work with the local scrap yards a good bit. For the most part, they all work fairly well with me when I am working my cases. Then again, I understand that often times, the scrap yards are the true victims. They are the ones who the theives are bringing stolen goods to, they pay for them and then sometimes the items are recovered and returned to the victim. The victim then gets their stuff back, the theif has a check (or cash) and the scrap yard is the one that is really out of the money. I often try to get the victim to reimburse the scrap yards/pawn shops when this happens and if not, I ask the Judge to order restitution for the dealers.

Anyway, having seen the steady flow of traffic when I am at the yards, and knowing first hand about the money to be made. I have spoken with my brother who has the means to start a new scrap business. He already has land and has considered "setting up" on about 40 acres (if needed) in a location that is about 7 miles from Nucor Steel in Darlington, SC. That would be the closest scrap metal yard to Nucor out of the yards in our area. I know nothing about the business end of scrapping and that is why I found my way here. I do have many questions such as licensing requirements for my state, whether or not the industry is flooded with yards or if it is still a good time to consider getting into the scrap business, whether Nucor would typically be the buyer for a local scrapper or what other buyers there are local to South Carolina and abroad, approximate start up costs including equipment (scales, buildings, etc.), Goverment funding available to new recycling businesses such as environmental grants, and if he would be better off partnering with an existing larger company and franchising or something similar. I do not know where to begin, so I will surf these forums and post questions that I do not find answers for when searching archives. Until then, I hope to get to know some of you while I research this business and possibly even meet some local people through this forum who I may meet someday and do business with.

Thanks,

Todd

I'd be super pissed if I had scrap stolen, (and I have, only it wasn't scrap), then returned (hasn't happened yet), and then forced to reimburse the scrap yard.

It's not the customers job (us) to see to it that the scrap yards are paying attention to what is coming in and getting identification.

I can't believe the bs I am reading here.

I think he means more along the lines of "stuff" stolen and sold as scrap. Stuff that is worth more than scrap. And he mearly asks, as in a reward to the guy who is now the victim. Unfortunately, anything in this manner is usually torn apart. I am thinking he never gets any takers on that, and I hope that he is responsible for finding some of the theives that are stealing both good stuff and scrap stuff.

One of these days, scrap yards will end up operating like pawn shops and have to set on the stuff for xx amount of time before being able to sell it. I hope that never happens.

Wow! Parrothead, you are correct. This does not happen with the scrap yards as often as it does with the pawn shops. Lots of times you have a family member call the SO from the pawn shops saying that they located their stolen jewelry. We find out that it was their son or brother or daughter or other family member who has a crack addiction and they stole it and pawned it. The victim then demands their stuff back but they refuse to cooperate with the investigation or to pursue criminal charges against their "loved one". They expect to be able to get their item back, not prosecute their family member AND that pawn shop loses. As for the scrap yards, I have had several autos stolen lately that people are just either calling a tow truck and saying, "haul this car to the scrap yard and I'll meet you there". The tow driver does so, they do so and then we track the car back to the scrap yard. Usually, it has been shredded and the victim is out his car and usually only gets ordered restitution through the courts.

Sorry If I was unclear. That situation usually occurs more with the pawn shops than with the scrap yards but it does still happen.

Thanks for all the replies,

Todd

I think the scrapyards need to do what the pawnshops do up here; if they buy anything you stand facing a camera with your ID held out to be readable and they take a picture of you and put it with your receipt. No doubt in anyone's mind who brought in what. I've watched "certain" people slink back out the door when they tell them to line up for the pic.

Pawnshops here require a finger print to sell to them. Scrap yards require a photo ID that they record and your vehicle must have valid plated and updated plates that they record.

Oh, welcome aboard. heh!

Steel is a low grade (relatively speaking) hi volume product. Since you have no previous relationships (atleast none that you have mentioned) with Nucor, the fact that you are only a few miles away isnt a considerable competitive advantage. There are HUGE players in the market paying above market for scrap to keep guys like you out. You will also need 250,000 of equipment if you want to even efficiently process this material for the mill. On top of the equipment investment you would need a safety net of $1,000,000 to $5,000,000 depending on how aggressive you want to be, to stay a float (cash flow).

There is a misconception about the scrap business, that it is easy money and a ton of money... the same can be said for any business given the right environment, socio/politlca/economical climate.... not to mention solid operations and personnel.

Additionally, many people in this forum have earned their stripes and learned everything the hard way...although I am new to the forum, not the industry, I would be surprised if there was alot of "free information" available. I suppose it is how you craft your questions and whether or not people feel generous for others to plant and harvest the fruits of their wisdom/knowledge.

I may be able to suggest some consultants to you if you are interested.

@zakmattingly, in a case like that u believe the scrap yard, or pawn shop, who ever is out the money can file a civil action against the thief...I believe that civil action can be taken whether or not criminal charges are filed, so technically a person my be locked up and or fined, and still be liable for repaying the organization or person who is at a loss.