The scrap metal recycling industry is worth $29 billion in the U.S. alone. Only 500 companies operate in this market, so there is little competition. If you've ever told yourself "I want to sell scrap metal," now is the time to do it. This kind of business has low startup costs and can turn into a profitable venture.

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Scrap metal is in high demand as it helps conserve energy and landfill space. As an entrepreneur, you can sell scrap metals directly to buyers or start a scrap metal recycling business.

What Is Scrap Metal Recycling?

Scrap iron, steel and other metals have been recycled to make new products for over 150 years. Durable and sturdy, these materials are widely used in the production of electronics, shipping containers, construction materials, cast-iron products and more. Scrap metal recycling helps reduce waste while conserving energy and landfill space. Recycling just one ton of steel, for instance, helps save 120 pounds of limestone and 2,500 pounds of iron ore.

Copper, aluminum, lead, zinc and stainless steel can all be recycled. Yet, only a small percentage of all metals used worldwide are melted and used to make new products. For example, less than half of all aluminum cans on the market have been recycled in 2016. The good news is that a growing number of consumers and businesses are starting to realize the benefits of recycling metals.

The global scrap metal recycling market is forecasted to reach $280 billion by the end of 2019. Its revenue will increase by about 3% by 2024, according to Recycling International. Entrepreneurs can sell scrap metal to supplement their income and build a sustainable business.

Starting a Scrap Metal Business

More than 53 million tons of iron and steel were recycled from scrap in the U.S. in 2016. The scrap metal recycling market is booming, so why not leverage this trend and start a profitable business? Form a company, obtain business licenses and make a plan.

Depending on where you live, you may need to obtain a scrap metal license. The State of Washington, for example, requires scrap metal suppliers, recyclers and processors to be licensed. You can't just go out, collect scrap metal and sell it for cash.

First of all, learn about the different types of ferrous and nonferrous metals, how to identify them and how they can be used. Iron and other ferrous materials are found in refrigerators, car engines, stoves and other products. Non-ferrous metals, such as copper and aluminum, are commonly used for the production of wires and pipes, customer electronics, home decorations and more.

Collect and Sell Scrap Metals

The next step is to figure out where you can find and collect scrap metals. These may include auto repair shops, construction sites, hospitals, clinics, garage sales, bakeries and even junkyards. Bakeries, for example, use professional kitchen equipment made from stainless steel; if something breaks and can't be repaired, they'll throw it away. You may also collect old metal racks and damaged shopping carts from supermarkets and other local stores — just remember to ask for permission.

Beware that not all metals can be sold in scrap yards. Paint cans, for example, may have residues that are difficult to remove. Also, copper wires need to be stripped before being sold. That's why you first need to learn how to disassemble various items for scrap. Additionally, it's important to research the prices of commonly traded scrap metals; copper, for instance, is worth about $2.51 to $2.98 per pound, while aluminum is traded for $0.66 to $0.9 per pound.

Make a list of scrap metal buyers and request quotes. Focus on recycling centers, scrap yards and manufacturing companies. Consider setting up a website to display your inventory and rates. Buy or lease a pickup truck to deliver scrap metals to customers; you will also a quality scale and a warehouse, so take these costs into account.