NEW Brick and Mortar Scrap Metal Business..SALES?????

Hi.... I am here just looking for some advice and knowledge. My brother-in-law just opened up a scrap metal business on a VERY BUSY street in New York City. I have done all of his background work and designed his logo and shop sign. This week was his first week opened. (He has worked in scrap metal for the last 30 years...but just opened up his own shop). My question is... IF YOU HAVE a scrap metal business (that you operate in a building) can you tell me what you expected or RECEIVED your first week in sales? Did you get any customers? What was your experience like? The only advertising we have done was sending out 200 postcards to the local businesses (plumbing/electricians/builders)

He had about 2-4 customers per day his first week... small customers though... no huge payouts by any means. I just wanted to hear your experience and on how your business was the first week and maybe the first few weeks after that? Unfortunately, he is feeling a little defeated.



I truly appreciate your sharing your story.

Thanks
Anna

I don't have a scrap yard, but I do have some advice.

Scrappers are creatures of habit, they are going to take their scrap metal to their usual scrap yard(s) unless you give them a good reason to bring it to yours.

Within the last 3 years 2 new scrap yards opened in my area. To attract customers from existing scrap yards they both employed loss leaders. One yard paid the best price around for light iron. The other yard paid the best price around for different grades of aluminum. The loss leaders got word of mouth around about both scrap yards.

A couple of other things.

Winter is a slow season in the scrap business. It is even slower now because ferrous and copper prices are way down.

As I am very familiar with NYC and NYC traffic, a very busy street can actually be a detriment to a business like a scrap yard.

Also, how many other scrap yards are within 5 miles of the new business? NYC is a tough competitive marketplace.

I don't know anything about New York, but here's what I'd do:

Wait. Put up some window signs, and go on with business. When it warms up (End of March), advertise, and raise prices temporarily. People will come.

I don't have a scrap metal business but i did start (selectively) buying e-waste awhile back. It's a work in progress.

You have to be patient .... it takes years to develop a solid customer base.

Timing is important too.

Is he doing anything for outreach ? Maybe visit with potential customers ? Consistency is the key. The first five or ten times you stop by a place they might not have anything for you but if you're always polite, friendly, and respectful they will eventually want to throw you a bone.

Thanks for the reply Mechanic688.... I will definitely look into one of those signs. Thanks for the tip

Hi Jeb1212...thanks for your reply... there is only 1 scrap yard within 5 miles...then 2 more a little further out.. I know the weather has been tough the last week where we are so that is def one of the problems....hmmm... I didn't think that a busy area would be a detriment...I thought the pass through traffic would be helpful... I guess we just need some patience. Thanks

Thanks Matador.... I told him that... the weather has been freezing here... 5 degrees average for the week... so it has been freezing... I keep telling him that... Thanks for the advice

I don't operate a yard, but there are two things that he can do; buy it for more, or buy it better. One of the biggest complaints I have about my current yard is that it's a PITA to drive into (only one scale, and it's quite busy so it can be hard to drive out of the yard once you're in). I mean, as long as he's offering competitive prices (IE at least on par with similar yards) then he should theoretically attract scrappers in the immediate area. But if I've been going to a yard for years that is paying the exact same as a new yard, and the new yard isn't any nicer, I don't really see any reason I'd take my business there.

Try to get a good web presence going. Maybe offer a donut or a coffee with every load of scrap, food is a great motivator.

Originally Posted by BRASSCATCHER

Where in the city is the yard? There are 5 boros that make up NYC?

Please say Manhattan. I swear it would be the first thing I'd go to see in NYC if there was a scrap yard underneath some Goldman-Sachs office.

He's starting up in the toughest business climate in years. Is he specializing in non-ferrous or is he taking everything?

He will definitely have to work every angle: visit potential customers--every business he can think of in as big a radius as possible. Advertising as suggested above with signs and print ads in papers, craigslist; fast throughput of customers, pleasant staff, and competitive prices.

Use every gimmick he can--donuts in the office, handouts with his name on them--magnets, pens, mouse pads. Punch cards--visit the yard "X" times, get a few % more on your scrap, etc.

The idea of bumping prices when people are in spring cleaning mode could work, too, especially coupled with a big ad campaign.

Has he set up with equipment to service customers? Bins, lugger truck and the like? It is a service industry--sometimes you gotta go to the customer.

He will have to be a whirling dervish to get people knowing him and knowing he can provide SERVICE. It's a little tough if he is just one guy...he can't be out pounding the pavement, away from the yard.

Patience will be a virtue here, as long as he can hold out--it may take the better part of a year to get known and get serious traffic through his yard.

I wish him well. He's a gutsy guy, jumping in with both feet!! Keep us posted!

Jon.

Put one of those inflatable flailing arms guys out front.

Then when the weather gets warm in the spring, have a lady in a bikini next to it waving to traffic.