How do people make money from scrap metals

On 11/6/2011 10:33 AM, Jim Wilkins wrote:
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Shills can be avoided entirely by never exceeding your predetermined maximum bid.

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I don't, but they have driven me right up to it.
jsw

On 11/6/2011 11:20 AM, Jim Wilkins wrote:
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What difference does it make? Your max is what it is worth to you.
If you don't like being driven to your max, then your max is too high.

Jim Wilkins wrote:
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I have fun with shills. I screwed a bunch of them. bid fast and furious for a couple of bids and then stop suddenly.. they make another bid and get hung up.
They will come back to you and offer the merchandise at a lower price. They know that your know they tried to shill you but don't say anything other than you will buy it for a much lower price.
John

On Nov 5, 11:13 am, Ignoramus27678 <ignoramus27...@NOSPAM. 27678.invalid> wrote:>
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Also remember they may not always estimate correctly. And sometimes they may think it is worthwhile to break even or even lose money just so a competitor does not win the auction and decide the scrap business is worthwhile.
Dan

Also remember they may not always estimate correctly. And sometimes they may think it is worthwhile to break even or even lose money just so a competitor does not win the auction and decide the scrap business is worthwhile.
Dan
The scappers can be a valuable resource, being friendley with them is a good idea. You have to remember that they also aquire things from thier sources other than auctions. When i had my business in chicago i had some scrappers that would bring certian items i told them i buy to my place before the went to the scale. Got a lot of good merchandise for much less than auction prices. Also scrap yards themselves are a good source, i bought a lot of stuff from scrap yards. Some of the yards i dealt with would call me when they got a load of tooling, machines, and motors. My thinking at that time was to let them do the grunt work and i would cherry pick for items i could sell quickley. When you deal with these guys remember cash is king, always pay them in cash and will love you forever.
Best Regards Tom.

Ignoramus27678 wrote:
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The best way to get educated is to buy a couple of lots. I been in and out of the scrap business since I was a kid. you just do it a little at a time until you get familiar with it. Way back when I would fly out to ca. and bid on 40000 lbs of electronic scrap at a couple cents a pound. The trick was to see a couple of expensive items that needed minor repairs and base the bid on what you could sell them for with the rest being the potential profit. I did have an edge in that I knew how to repair almost all the test equipment I would come across and had a place to sell it after it was repaired. Those big old motors are loaded with copper windings more than any new motor. Beams are easy to estimate you bid about 10 cents a pound if the beams are in good shape and sell them for 50 or whatever the market will bear. There is always someone looking for a beam for a project. I had a friend that was heavy into the used steel business and I would fly him around to look at buildings he was bidding on to tear down. There are no instructions in the scrap business but the whole thing is to buy low and sell hi.
John

The best way would probably be to avoid it, and at least save the investment it would've cost to find out you didn't have the experience dealing with those sorts of deals. Demolition/salvage specialists know what they're doing. Piss 'em off and the EPA might show up at one of those "opportunities".
Like antique specialists, it isn't easy to compete with them. Even if you could, it just means the cost of deals will be higher.
In a deal like the salvage job (realistically, you'd be buying work), you probably end up with unskilled, unmotivated laborers/strangers damaging, and/or possibly stealing your equipment, causing collateral damage (huge risk of injuring each other) and other liability risks.
There are a lot easier/safer ways to make legal money, and your limitations are that you're trying to do it by yourself. When one person needs to be out checking on deals, loading, transporting, testing, cleaning, making minor repairs, researching, photographing and listing online auctions and/or other administrative duties.. days are too few and too short. Start appreciating the time left, above the dirt.
It appears that you're picturing an early retirement, and are becoming erratic in thinking about how to get there. You made the big leap, it seems now you're wondering what to do next. For what yor actions suggest, you should probably have about 2 others involved, who are talented and reliable. They could have full time jobs, but willing to devote some time/effort, but they'll need to be rewarded.. not just with broken equipment.
When you look at overhead expenses of profitable small businesses, it's fairly easy to see that profit margins are often very lean. Some of the ones that do very well are crooks, and you wouldn't want to do business with them. Advertising, utilities and some other major expenses need to be met every month, whether there was a profit or not (after repairs, maintenance, new business acquisitions etc).
For example, you might be, by far, further ahead using that building space for a car detailing/cleaning business (for car dealers only) instead of dealing in used industrial machinery.
You may just end up running an enjoyable pastime into the ground. With just a little bigger garage at home and a part-time helper, you could make fairly easy money with eBay and small items that can easily be carried to a car. No huge overhead expenses, little risk of injury and a moderate but continuous stream of income. More time with your family and a schedule where you're free to do what you want. Consistent small profits can achieve more than infrequent large profits. USPS provides free, clean, attractive looking boxes.. and newspaper is generally free, so one expense (in addition to the greedy scumbag eBay/paypal fees), is packing tape. USPS also picks up packages.
So what if there is an opportunity to make $2000 on a 3 ton machine.. carrying boxes to the car is easy. Not likely to lose a finger or an eye.
I've mentioned a few deals I found on eBay (delivered to my door) and found at flea markets (a couple of weekend hours outdoors in nice weather, meeting friendly people), which I ended up making huge profits with when the items were sold on eBay. Light-duty efforts, huge profits.. and generally as frequently as one would desire.
I often hear retail store wage earners whining about their jobs, and I can't sympathize with them when I know they could at least triple their part-time earnings with the same hours (or less) applied to finding and selling stuff online. They're probably too busy working on their Face or Space webpresence to have any spare time. Reporting who passed out at a party is much too important. Knowing that they didn't actually need that retail job would make it much easier to cope with.
The US is the land of surplus and this isn't a new development. Most 2x-10x profit opportunities don't require a tow vehicle. A rental truck and helpers might be handy once in a while.

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Bill, thanks for a lengthy post touching several interesting topics, I will give a long winded reply.
The above is a good point (actualy several). What you are basically saying is that
a) they know a great deal of difficult to learn stuff b) if I piss them off by competing with them, they might hurt me in some sneaky way and c) these jobs are inherently risky due to dangers of injury and property damage
I heartily agree with the first point, I also always believed that knowing some difficult to learn, complicated stuff is a great way to make money. I consider my dealing with industrial surplus to be one of such applications of arcane knowledge. Someone looks at a crate and sees a crate full of junk. I look at the same crate and see servo drives, servo motors, steppers, electronic pressure gauges, and other things that are easy to test and sell.
Somehow, I feel, that someone experienced who is looking at a scrap pile, would not just see it as a sad pile of junk, but could see how much copper, bronze etc is in there almost instantly. That is hard to learn, no less than other things, and my gut feeling is that it is a very valuable knowledge.
Second point is something I heard about, but so far I have never encountered in the US.
When I think about bidding on large scrap lots, I do NOT want to be removing those items by myself, I would hire people to do it. I already hire people by day, it works great, although what they do is a great deal safer than torching down old boilers.
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Yes. A couple of things. One is that I like what I am doing so much, that I am no longer contemplating early retirement. In fact, I am thikning the opposite, how long will I be able to do this stuff. It is great fun and fits my personality 100%.
Second is that I find this stuff so interesting, that I already lost 8 lbs of weight, by simply not being bored and not eating as much due to boredom.
So, for me, retirement is out of the picture for now.
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Good point.
What I want is to have a smoothly running operation, so that I can oversee it, buy stuff, and sell stuff, without being involved in moving stuff, cleaning it, packing, loading out etc.
I hope that I can then spend about half of my time on this, and half the time on my websites, all the while being around the work that is being done.
This sort of setup, requires a certain amount of volume being transacted monthly, of course with enough profit.
At this point, I have a very nice person working for me on a "paid daily" basis, and this helps me a lot.
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Yes. I agree. This is why I decided that I do NOT want to be in manufacturing or services, where competition is at its worst. Dealing with surplus is generally high margin and intellectual, and fits my personality much better.
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I own this place and owe nothing to landlords, banks, investors or partners.
I have the following fixed expenses.
1. Cook county real estate taxes. 2. Heating in winter. 3. Repairs, such as likely upcoming roof replacement.
Pretty much everything else is variable expenses. So, I would think, the bar is relatively low.
In addition, I have a huge front parking lot, which I want to stripe and use as a semi truck parking lot. That might pay for my real estate taxes. I have a lawyer writing a parking agreement for me right now.
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I never do any business (not even buy surplus) with car dealers, other than repairing my vehicle.
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WB, I do not yet have enough experience running a business out of this 10,000 square foot factory building. Early indications from the last 31 days, suggest that selling used stuff seems to be working out okay.
I have a forklift since last week (actually two, but one is being fixed), so things should be a little easier from now on. Once I settle down a bit, acquire pallet racking, etc, and straighten out the selling process, I hope that
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I know exactly what you mean!
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They would have to actually know something, and take some minor risks, which many people are not capable of doing.
Actually, being a successful buyer/reseller requires several skills. One is being organized enough to keep track of what is going on and to ship on time. Sounds minor, except many people cannot do it. Another is interest in the stuff that one is dealing with, knowing what to buy and to sell. Another is some character restraint, not paying too much. Yet one more is to be at least relatively honest, to stay in business. Plus some appetite for risk taking. Most people lack at least one of those.
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I have a pickup truck and two trailers. One is a military trailer that I can convert from enclosed to not enclosed in 5 minutes. Another is a lowboy. This is a good start for most purposes.
i

On 11/5/2011 9:51 AM, Ignoramus27678 wrote:
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You missed one big tax. That is a personal property tax. I presume IL counties have such a thing? On Dec. 31, you inventory all the stuff you have for sale and estimate the market value and send the document to Cook County. Next November, they will send you a tax bill. Same goes for the equipment in your building that is not permanently attached to the building.
My bill is pretty big each year, because the county depreciates the equipment at a rate most favorable to the county!
Paul

On 11/5/2011 1:20 PM, Paul Drahn wrote:
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No such thing in Arizona. < http://www.kiplinger.com/tools/retiree_map/index.html?map=&state_id=3&state=Arizona >

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I never heard of this. I have been doing business since 1998
i

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In illinois you also have to pay "use tax" on equiptment that you buy for use in your business, it's the same as sales tax most of the time. Some things are exempt, ask your accountant. Tricky stuff.
Those fork lifts you bought are subject to "use tax", as is any other equiptment you did not pay sales tax on. The compresser your installing is subject to use tax if you did not pay sales tax on it when you bought it.
Best Regards Tom.

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Illinois does not have a personal property tax.
Many states do. I am no expert, but I believe these occur in states that collect a state property tax and are a device by which local governments derive their levy.
Illinois does not get income from property taxes. It used to, but it took such a bath during the depression that it decided to get its revenue from income and sales taxes. The state oversees the assessment process to make sure that each county assesses fairly, but the moneys collected go to the counties and municipalities.
As far as Iggy owing sales/use tax on his fork lift, he probably does. But that can be lessened in several possible ways.
In IL sales/use tax is intended to be paid by the end user. If you run a office furniture company and buy a truckload of desks for resale, you do not pay sales tax on them. You collect the tax from each sale and send it to the state. If you take one of the desks and use it in your office, you become the end user and owe tax on its purchase price.
Exemptions include:
Items for resale.
Equipment used for manufacturing, printing or farming. (A forklift is technically materially handling equipment so I do not think these apply except as farming exemption)
Or equipment purchased for lease to other parties.
Which path he takes depends on his accountant, but:
So Iggy can claim the lift as inventory. If anyone asks he can say it is a demonstrator model. He will not owe use tax.
He can form a second company and lease the equipment back to himself. He will not owe use tax.
He can pay the use tax and expense the lift on his state and federal income tax. Given the amount he generally pays for this stuff, he can probably just write it off in the first year. Worst case, 5year MACRS depreciation will mean (assuming he is a sub s corp doing the normal fiddle on his FICA tax and a federal tax rate of 15%) he will cover any use tax paid in income tax for the first 1.5 years, and probably make that much again in the remaining 3.5 years.
He will however, owe income tax on the entire nondepreciated amount when he sells it.
Paul K. Dickman
I am not an accountant, I am just a guy who fills out his own tax returns.

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Everything I have is for sale, except my motherland. So I think that I do not owe use tax on anything. Thanks for clarifying this for me. Stop by one day if you get nearby.
i

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About two days a week I am within a few miles of your warehouse. When I am visiting my pop in the home, or working on the family house, trying to clean it up to saleable condition.
Unfortunately, I am on the Lake St. side of the Proviso Rail Yards. There ain't but two ways across those tracks and both of 'em suck.
Paul K. Dickman

Hi Iggy,
Where's your warehouse located?
Bert

berkeley, il.
would love to see you.
i
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Your solution is obvious --> < http://www.salvex.com/listings/listing_detail.cfm?aucID 2944475 >

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You must be near Ferrellgas then. They fill my propane tanks.
i