How to Start Scrap Business in India 2024

What if you get to know of a business that besides boosting your profits also contributes to a cleaner greener India? With 45 million tonnes of recyclable material generated each year and the global push for sustainability, India’s scrap business is no longer just a side hustle but a booming industry. If you are new to this industry, this blog shall guide you on how to start a scrap business in your country.

What is a Scrap Business?

Scrap business is essentially the buying and selling of scrap materials like paper, metals, plastic and other recyclable materials. As a scrap dealer your goal is to buy the scrap material at a low cost and sell them for a profit after processing them. The scrap business contributes significantly to the economy and creates employment opportunities and nurtures sustainable industrial growth.

In India, earlier, the scrap business was mainly run by socially backward people and was not duely respected. But over time, and the change in people’s attitude, those who do this business earn a lot of money and make huge profits. Now young entrepreneurs are gradually entering the scrap business in India in more numbers.

What are some of the best recycling business Ideas in India?

• Metal scrap business: Scrap metal prices in India are lucrative and most sought-after materials in the recycling market. They can be collected from households , industries and construction sites in your metal scrap yard and processed to make useful products like utensils, furniture, art decor and many other things creating a profitable business opportunity for those in the scrap metal business.
• Paper scrap business: Paper scraps are a popular recyclable waste and you can collect them from offices, schools or publishing houses and sell them to paper mills or paper recycling plants. Paper products like bags, envelopes or notebooks can adobe made from paper scrap.
• Plastic scrap business: Plastic waste is one of the most hazardous materials in waste management. It takes a very long time to degrade and harms the environment and wildlife in several ways. Newer technologies are evolving everyday to recycle plastic waste to turn them into valuable products like bottles, containers and toys. This initiative has opened up significant opportunities for the scrap trading business, where plastic waste can be collected, traded, and processed, turning an environmental problem into a profitable venture.
• Glass scrap business: Glass scrap can be collated from hotels, bars and restaurants and sold to recycling plants or glass manufacturers. Products like jars, lamps , vases etc. can be made from glass recycling.
• Electronic Waste (E-Waste) business :E-waste recycling involves electronic waste products for recycling. Evolving technological advancements create excess electronic waste, leading to a lot of waste and environmental pollution. People dispose of different types of electronic products like smartphones, batteries, laptops, refrigerators, televisions, microwave ovens, etc. You can collect all this in a scrap recycling company and process these materials to create new products.

How to Start a Scrap Business in India?

Step 1: Market Research

To begin a scrap trading business, market research is a must. Gathering and analysing information about scrap demand in your area , the supply, competition and pricing of materials shall allow you to be well informed of the following:

•  The scrap material that are high in demand in your area categorise by type and quantity
• the reliable suppliers, buyers, and customers for your scrap business start-up
•  the competitive prices for buying and selling your scrap materials
•  your competitors’ strengths and weaknesses and find your competitive edge

On the basis of reviewing online scrap markets, you can conduct surveys and interviews, or make field visits. Compile and analyse the collected data and information from the surveys. The findings shall give you an idea of the key trends, patterns, and insights to make an action plan for your business.

Step 2: Licences and Permits

The legal documents authorise you to operate your scrap business in India. Licences and permits will help you to:

• Align with the laws and regulations of the central, state, and local governments
• Refrain from any legal issues or penalties for violating the rules or norms of the scrap industry
• Strengthen your integrity and stature among your suppliers, buyers, and customers 
• Leverage the benefits and incentives offered by the government for promoting the scrap industry. 

To start a scrap business in India, some of the licences and permits that you need are:

• Business licence: This document grants you permission to start and run your scrap business in India. For a business licence , you can apply for it from your area’s local municipal corporation or district industries centre (DIC).
• GST registration: To register your business under GST if your yearlong turnover exceeds Rs. 40 lakhs (Rs. 10 lakhs for northeastern states). 
• Trade licence: A trade licence is a document that certifies that your business is following the health, safety, and environmental norms set by the local authority. 
• Pollution control board certificate: This document verifies that your business adheres to the state and central governments’ pollution control norms and regulations. You can get this certificate from your area’s state pollution control board (SPCB) or Central Pollution Control Board (CPCB).

The fees and procedures for securing these licences and permits may differ depending on your location, business type, and business size.

Step 3: Funding

To raise fund money for your scrap business, here are some steps you can follow:

• Purchase or rent the equipment and storage space for your scrap yard
• Paying the the salaries, wages, and benefits of your employees and workers
• Consider the operational and maintenance costs of your scrap business
• Touch upon and grow your scrap business in the future

You can also apply for a business loan with a lending institution for funding your scrap godown, submit an application for grants, or partner with investors. 

With scrap metal prices being money-making and scrap business profit margins ranging between 10% to 30%, there’s a great potential to scale operations. By diversifying the types of scrap you trade, from metals to plastics, and investing in better recycling technologies, you can increase profitability. With the scrap industry in India shifting towards sustainability and the need for recycled materials continues to grow, broadeing your scrap business can secure a steady flow of revenue while contributing to environmental preservation.

While each of the funding options has its own advantages and disadvantages, you should choose the best option for your scrap business based on your needs, goals, and capabilities. 

Step 4: Equipment and Storage

In this step of starting a scrap business in India is to acquire the equipment and storage space. Equipment and storage will help you to:In India, the growing demand for sustainable practices has led to an increased interest in buying scrap online. Platforms dedicated to selling scrap, such as Scrapshop, offer users an efficient and eco-friendly way to purchase materials like metal, plastic, and electronic waste. These platforms serve as mediators between sellers and buyers, fostering the recycling industry and promoting a circular economy.

• scrap materials are to be collected,stored and transported
• scrap materials processed into raw materials or products
• Measure, weigh, and label your scrap materials or products
• Sell or deliver your scrap materials or products to your buyers or customers

Some of the equipment and storage space that you need to begin your scrap work are:

• Containers are used to store and transport your scrap materials or products. Metal bins, drums, crates, or boxes, depending on the type and quality of your scrap materials or products you can use the storage.. 
• Scales are used to measure and weigh scrap products. You can use digital, mechanical, or platform scales, depending on the accuracy and capacity of your scrap materials or products. Your scales must be calibrated, certified, and reliable.
• Shredders are machines typically used to cut or shred your scrap materials into smaller pieces. You can use single-shaft shredders, double-shaft shredders, or four-shaft shredders, depending on the speed and power of your scrap materials. 
• Melting machines help in melting your scrap materials into liquid form. Induction, electric arc, or blast furnaces, depending on the temperature and volume of your scrap materials you can use the required machine. 
• Storage facilities refer to warehouses, godowns, and sheds where you keep scrap products. Your storage facilities must be well-ventilated, pest-free, and fireproof.

Step 5: Processes and Products

Processes and products are the activities and outcomes you perform and produce for your scrap business. They help you to:

• Transform your scrap materials into raw materials that can be sold or used for making new products
• Create value and generate revenue for your scrap business
• Meet the needs and expectations of your buyers and customers
• Build up your reputation and brand image in the scrap market. 

Some processes and products that you can implement and offer for your business are:

• Sorting separates your scrap materials into categories based on their type, quality, and condition. Sortings can be done in a number of ways - manual, mechanical, magnetic, etc. depending on the efficiency and accuracy of your scrap materials. It will improve the quality and value of your scrap materials and reduce waste.
• Cleaning removes dirt, dust, grease, and oil from scrap materials. Water, detergent, or solvent can be used for cleaning. The cleaning process improves the appearance and performance of your scrap materials and prevents corrosion.
• Cutting resizes the shape of your scrap materials to fit your equipment and storage. Shears, saws, and torches can be used for this.
• Casting shapes your melted scrap materials into solid form by pouring them into moulds. Sand casting, die casting, or investment casting can be used. It will help create new products from recycled metals or materials, such as utensils, furniture, and jewellery.
• Labelling means adding labels or tags to your scrap materials or products. Stickers, stamps, and barcodes can be used for this purpose. Labelling provides the details and specifications of your scrap materials or products, like weight, grade, price, etc. and helps in tracking and tracing of products.

India has witnessed a demand for sustainable practices that has led to an increased interest in buying scrap online. Platforms categorically selling scrap, such as Scrapshop, offer users an efficient and eco-friendly way to purchase materials like metal, plastic, and electronic waste. These platforms serve as mediators between sellers and buyers, nurturing the recycling industry and promoting a circular economy.

Conclusion

buying scrap online through platforms like Scrapshop not only simplifies the procurement process but also plays a crucial role in environmental conservation. As businesses and individuals embrace these digital solutions, they contribute to a more sustainable future by reducing waste and supporting the recycling ecosystem.

FAQs

Q1. What is the ROI in the scrap business?

Ans. ROI is an important performance measurement used to evaluate profitability. The simple ratio divides the net profit of an investment by its cost. For scrap metal recyclers, having available, up-to-the-minute, organised data about the cost of material is a vital part of the ROI formula.

Q2. What is the main objective of a scrap company?

Ans. The key objective is to manufacture, get manufactured from others, buy, sell, exchange, export, import, machine, and generally deal in various items of Iron and Steel and its Products, Iron and Steel Castings, forgings, of all kinds required by various Industries and to carry on the business of Iron-founders.

Q3. What is the nature of scrap business?

Ans. A scrap waste can fetch some good money. In this way, setting up a scrap collection business as a small-scale industry is a good idea as it not only helps in turning unused waste into usable products but also generates employment opportunities and brings some financial benefits.

Q4.What is a scrap scheme?

Ans. A scrappage program is a government incentive program to promote the replacement of old vehicles with modern vehicles. Scrappage programs generally have the dual aim of stimulating the automobile industry and removing inefficient, more polluting vehicles from the road.