How to Start an Auto Recycling Business
An auto recycling business, or what is often referred to as a junkyard or scrapyard, can provide a lucrative and service-oriented business opportunity. With the right location, business permits and inventory, an auto recycling business can run successful in good and bad economic times. You can take advantage of community "green" objectives while providing do-it-yourself mechanics with a source of used parts.
- Difficulty:
- Moderately Challenging
Instructions
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Look for property in areas zoned for industrial use. Check with your local zoning board for a list of areas that could be used for your business. An auto recycling business should have at least two acres available to store and work on salvaged vehicles.
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Hire a mechanic who can take apart the vehicles, fix up those that can be resold as working cars and trucks, and help you to mange the inventory. Taking customer requests and shipping and receiving parts and autos will require another full-time employee, or yourself as an owner/operator.
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Buy or lease a tow truck that you have at your own disposal to save on towing fees. If you are able to respond to calls quickly to dispose of wrecked autos, you may pick up more free inventory than if you have to wait on others to bring the inventory to you.
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Invest in software that can help you run the business and manage inventory, one of the most important pieces of a successful auto recycling operation. Hollander develops the most popular software utilized by the industry for Audetex. With the programs, you can rapidly locate inventory and sell it for the appropriate price. It also has built-in contacts for marketing and networking with other dealers and buyers.
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Build relationships with insurance companies, towing services and local law enforcement agencies to start a stream of used inventory coming in. Many sources will pay you to pick up the vehicles, while others may charge a fee for the entire automobile.
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Subscribe to newsletters and forums to keep up with changes in the industry and to get ideas to grow your business. Sites such as that put out by Green Weenies connect users with consultants like Ron Sturgeon who publishes books on salvage businesses and offers a free newsletter to subscribers.
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Set up an account with an online used auto parts directory service to sell parts over the Internet. Sites such as Car-Part.com provide recyclers with portals to reach commercial and individual customers shopping online.
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Tips & Warnings
Search sites such as Business Nation to find existing auto recycling companies for sale. Take over an existing business to defray start-up costs and inherit a built-in clientele.
Keep up with environmental protection laws that can impact your business. Join a group such as the Automotive Recycler Association to stay abreast of changes and to support lobbying efforts by the group.
