How Does a Recycling Business Work?

  • Recycling services are more than modern scavenger services. They address a real desire by people to recycle materials rather than contributing to overused--and increasingly expensive--landfills. The more we recycle, the less we contribute to pollution. Recyclers make the inconvenience of separating recyclable materials or dropping off at a recycling center an attractive alternative by helping to keep scavenger costs stable and paying contributors for certain materials.

  • In many states, recycling surcharges are added to scavenger service licenses, or the state funds recycling by making incentive grants to governmental units that mandate or operate recycling programs. These surcharges and incentive grants help subsidize a low profit margin business. Local governments often partially finance scavenger services, community recycling programs or bulk waste disposal services with recycling credits based on how much the community recycles.

  • Recyclers are basically reverse-distributors. Instead of delivering new products, they receive used products and manage their disposal. A smart recycler will find markets for each material he collects that require the least amount of handling, processing and transportation. In this way, recyclers can make the maximum profit on materials (like metals and paper) for which they get paid well. Those profits will allow them to accept materials (like plastic) where the margin is low.

  • Recyclers may operate as part of a traditional scavenger service, as a contractor for a scavenger service or as an independent company with collection centers. They may "wholesale" recyclables as brokers or in direct contact with the public in a "retail" capacity. Whether the material is collected or brought to a collection center, it must be sorted and crushed, bundled or baled for transport. Most recyclers collect as much of a material as possible, because better prices are paid for larger amounts. After the material is processed, it is sent to brokers or directly to manufacturers that will transform it into recycled paper, cans or bottles. Some will be processed into new products altogether, such as carpeting or building materials.

  • Independent recyclers face a challenge in storing and processing recyclables. Since they are, essentially, waste facilities, they generally need some allowances by local governments if they are to locate in areas that are convenient for residents to use. Collection centers must establish and maintain an efficient system to deal with the public and keep storage areas out of sight. A little public relations goes a long way, and many recyclers partner with civic groups to operate collection drives for materials such as newspaper and metals, splitting the profits and earning goodwill in the process.

  • Check with your state to find an agency that licenses and supports recyclers. The U.S. Environmental Protection Agency maintains a list of business resources. State EPAs or departments of commerce or conservation may also provide grants and business loans. Most state EPAs post a listing of local recycling centers on their websites.

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