How much does a Scrap Metal Recycling Yard cost to buy?

A typical Scrap Metal Recycling Yard sells for 1.5x to 4x annual revenue. With average revenue of $2.0M, expect to pay $3.0M to $8.0M.

How much does it cost to start a Scrap Metal Recycling Yard?

Startup costs range from $150K to $800K depending on location, equipment, and scale.

Physical

Scrap Metal Recycling Yard

Q: What are the profit margins for a Scrap Metal Recycling Yard?

The average profit margin for a Scrap Metal Recycling Yard is around 10%. Key costs: yard rent or purchase (large footprint required — 1–5 acres), forklifts and processing equipment ($50K–$300K), scale calibration and certification, 2–6 employees, EPA permitting, and insurance. Cash working capital for inventory is the biggest variable.

The business where people bring you product, you weigh it, and you profit

Scrap metal yards buy ferrous (steel, iron) and non-ferrous (copper, aluminum, brass, stainless) metals from contractors, homeowners, demolition crews, and industrial clients — then sell to mills and processors at a spread. Non-ferrous margins run 25–50%; ferrous margins are thinner at 5–15%. The model is uniquely cash-generative because customers come to you with inventory. A well-located mid-size yard processes $1M–$5M in material annually at net margins of 8–15%. Large yards scale to $10M–$50M. Private equity (e.g., Sims Metal) has been consolidating the industry, making independent yards attractive acquisition targets.

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Avg Revenue

$2.0M

Profit Margin

10%

Acquisition Multiple

1.5x - 4x

Startup Cost

$150K - $800K

Difficulty

4/5

How It Works

Customers drive onto your lot, you weigh their material, identify and separate metals, and pay them spot-price minus your spread. You accumulate inventory until you have enough tonnage to sell to a mill or broker. Price risk is the key variable — you buy at today's spot and hope prices don't fall before you sell. Active yards separate, bale, and shred material to increase value before selling upstream. Non-ferrous metals (copper at $4+/lb, brass, aluminum) are the profit engine; ferrous volume creates cash flow.

Revenue Range

Low End

$500K

Typical

$2.0M

High End

$8.0M

Pros

+Customers bring product to you — reverse of most businesses
+Commodity pricing means you're never negotiating at the sell side individually
+Strong community of repeat suppliers (plumbers, electricians, demo crews)
+Consolidation by PE creates exit opportunities at attractive multiples

Cons

-Commodity price exposure — margins compress when metals prices fall
-EPA environmental compliance and site remediation are real liabilities
-Working capital intensive — you're always holding inventory at risk
-Theft and weight fraud are ongoing management challenges

Best For

Operators with industrial or logistics backgrounds comfortable with commodity risk and EPA compliance

Operating Costs

Key costs: yard rent or purchase (large footprint required — 1–5 acres), forklifts and processing equipment ($50K–$300K), scale calibration and certification, 2–6 employees, EPA permitting, and insurance. Cash working capital for inventory is the biggest variable.