How does a salvage yard make money?


Quick Answer

Salvage yards can make money by selling scrap metal to foundries and mills, selling car parts to mechanics, and providing cleanup and recycling services. The last of these options involves charging people who want unwanted appliances and junk cars taken off their hands, according to the Houston Chronicle.

Continue Reading
How does a salvage yard make money?
Credit: Space Images Blend Images Getty Images

Full Answer

The unwanted appliances, junk cars, and other products made of metal that a salvage yard business can acquire through a cleanup service can then be sold as scrap metal to mills or to mechanics or vehicle repair hobbyists looking for car parts. The Internal Revenue Service states that 56 million tons of scrap metal are processed per year, which is why salvage yards can often make a profit through scrap metal selling alone, reports the Houston Chronicle.

Salvage yards can sell car parts to mechanics either by taking the cars apart or by allowing mechanics to retrieve the parts they need from the junk cars for a discount on the parts. Money can also be made by opening up the salvage yard to artists looking for cheap materials and items for projects, suggests the Houston Chronicle.

There are a number of startup costs that go into creating a profitable salvage yard. A salvage yard takes up a lot of space, so land must be purchased. According to the Houston Chronicle, a profitable salvage yard also needs loading trucks, scales, cranes, compactors and other equipment used to sort, move and organize metal parts.

Learn more about Financial Calculations

Related Questions