How I Afford to Bid on Scrap Metal, Electronic Scrap and Salvage Material

Word-Of-Mouth and Bootstrapping are Keys to Success

Recently a fellow emailed me asking how I could afford to bid on electronic and telecommunication scrap. The short answer is that I did some creative bootstrapping. Here are more details.

This fellow was referring to a discussion in my eBook, How to Make Money in the Home Based Salvage and Recycling Business. In the eBook I describe my adventures in electronic salvage, scrap metal and deconstruction.

First off, there's bidding and then there's auctions. Starting off I had no cash at all so auctions were out of the question. Even now I stay away from auctions because things usually get bid up way too high and the lots are often too large. In my experience the ones who bid and win have seemingly unlimited cash and they "flip" things almost immediately. Even if they only gain 10% in a couple of days, 10% of say, $10,000, is $1000 profit - not bad pay. Problem is most of us, including me, don't have that sort of cash laying around.

So, I bid on things. Through word-of-mouth I hear about things that are available. Often they are free. If not, I'm usually asked how much I pay, I "bid" and if acceptable, I get the material. Unless my bid is a small amount I explain to the seller that I need X number of days to pay after I pickup the goods. If this is unacceptable, I go on my merry way looking for the right deal that fits my circumstances and finances.

I've found over the years that word-of-mouth referrals is gold. I don't spin my wheels attending auctions, watching craigslist and freecycle listings and the like. Just too time consuming for the meager return. One of my best deals ever came directly from sitting in a rural coffee shop each morning and getting to know the folks who come in. One thing led to another and I ended up with a year's worth of very profitable electronic salvage work.

Recent examples include a word of mouth referral to a person wanting a 100 year old house torn down. I got the call and ended up with 1000s of board feet of beautiful old growth lumber for free. I'm using some and selling the rest.

Another example is a call I got about an old farm. I could have whatever I wanted for free. Note that I said, "have whatever I wanted." In this case, if I had to take all of it, I would have passed or offered a small amount for the stuff I wanted - just too much junk I didn't want so this worked out well. In a couple of hours I collected about 300 pounds of used aluminum roofing, some corrugated steel roofing in very good shape, about 200 pounds of copper wire, a working wood lathe, riding lawnmower, all sorts of miscellaneous tools, hardware, plumbing and electrical supplies, fencing material... Enough to load my Nissan pickup and 8 foot trailer to the brim.

My contact is going to get in touch with the absentee owner of the farm to see if I can have other items as well that he was unsure of at the time. Things I have my eye on are a canoe, a small Kubota diesel tractor (needs work), several 100 feet of irrigation pipe, doors in casings, and the old barn itself. He's pretty sure these are unwanted items as well. I'll keep my fingers crossed :)

A word about Craigslist - I said above that I don't spin my wheels searching craigslist all the time. I've found it to be mostly too unprofitable, but once in awhile it pays off. I check maybe once every couple of weeks. This morning I saw a listing for a very nice woodstove fireplace insert with variable speed blower. I called and found it was just a couple of years old. The folks bought the house with it in it and decided to heat with propane. Woodstoves are too heavy for most people to move around and they just want them out of there - thus free! If you run into these, ask too if they have any firewood. Most people seem to forget this. This morning if I hadn't asked, I would have missed out on a cord of nicely seasoned oak firewood.

A tip - Woodstoves typically way between 250 and 350 pounds. I can load and unload these woodstoves myself (and I'm 65 years old) using the following method. I have a small 8 foot utility trailer I bought as a kit from Harbor Freight. It's the heavy duty 5 lug model with a tilting bed. I can easily tilt the stove up on end and flip it back down on a 4 wheel dolly. Then I roll it to the edge of tilted down bed of the trailer and roll it on. You'll need a small piece of heavy plywood to fill the gap between the edge of the trailer and the ground - a steel plate works even better. Once on the trailer it's relatively easy to roll it in place and take it off the dolly.

In my pessimistic view of the economy, I think woodstoves and firewood are going to be gold (among other things). I may keep this one and use it. Whichever extra one I end up with, I'll probably trade it for a wood splitter or something else useful.

www.RecyclingSecrets.com for Free Home Based Salvage and Recycling Information Including: Metals, Deconstruction and Used Building Materials, Gold and Precious Metals and E-Waste. Check out: How to Make Money in the Home Based Salvage and Recycling Business

Home Based Recycling and Salvage 101: Bootsrap Yourself out of the Recession

I began in the recycling and salvage business in the early 1980s. Like today, but not as bad, there was a housing boom and bust that made making a living and maintaining a home difficult for many.

I was inspired to get into the recycling and salvage business after reading a little booklet titled, "Surplus and Salvage." I was amazed that everything I needed to improve my conditions and make a decent income were right in front of me - most everywhere I looked.

Without the insights in that little booklet I would have never dug myself out of the hole I was in. My hope is that this little article will help you see what is out there and how you might change your life for the better once you do.

Recycling and salvage is much more than collecting cans, cardboard, paper, etc. and taking them to a recycling center. This works, but to a very limited degree. For me, recycling and salvage takes some creativity.

In my mind, one of the reasons that our economy is failing is that "find a need and fill it" has become "create a need and fill it." Our economy is driven by greed and over-consumption instead of need. With enough money for advertising ANY need (e.g. desire) can be created. Recycling and salvage brings us back to a solid economic foundation based on need not greed.

In this work we are really operating at the ground level of needs and fulfillment. When I started out I first went from business to business and asked them, "what is it that you need?" Just a few days of doing this produced a long list of things that I should be on the lookout for. It included: old brass valves for rebuilding, auto parts for rebuilding, electric motors and generators for rebuilding, wooden shelving, steel shelving, desks, chairs, file cabinets, hand tools, power tools, plumbing supplies, glass ... The list went on and on.

So, now I had a list of things to keep my eye out for and ...

Read the entire article at RecyclingSecrets.com

High profits come from turning over your recycled and salvage material as quickly and as often as possible

by Michael Meuser, mike@recyclingsecrets.com

When I first started out I wanted to hold on to the material I collected telling myself I was waiting for the best price. It took me awhile to realize that by doing this I was crippling my business and putting it at risk. If you are like I was, you have a limited amount of capital and most likely started out by bootstrapping your business. If you are, it makes the most sense to turn over what you have collected as quickly as possible.

Here's an example. Let's say you paid $500 for a pickup load of high grade computer boards this morning. Gold has been going up and down and now it's a bit down, but you paid the amount you paid based on the value of gold NOW. So, you have to decide if you are in the salvage/recycling business or if you are a speculating investor. A speculator might hold off, see how the market goes and try to sell high, but this doesn't work if you are in the business. In this business it makes most sense to process or sell the goods today or tomorrow - as soon as possible - to get back your $500 stake plus 10-20% profit or more and have your capital available to do it again and again as often as possible.

Here's another way to look at it. If you pay $500 for something and can sell it tomorrow for $550, you've made a 10% profit in one day. If you wait a week for a better price and sell it for $575, you've made a 15% profit in a week but much less than that per day. For the entire week, you have not had your $500 of capital to use to buy and sell more material. $50 every day or so is more than $75 in a week. The more often you turn over your material, the higher your profit will be no matter how marginally profitable some of the individual transactions look at the time.

One very real risk of hanging on to your material too long is that when you do finally sell it, you'll need some of your capital for everyday expenses leaving less to buy more material with. If you are not careful this will be the beginning of a short downhill slide to not having enough capital to do business and then you have to bootstrap all over again starting at the bottom.

I'm not saying that there aren't times when it makes sense to wait a bit. If you live far from a refiner or buyer, it makes sense to make the trip with a large load rather than a small one. So, you have to factor in the cost of transportation and the value of your time. Some things like electric motor and generator cores or valve cores are sold to remanufacturers who don't want to be bothered with very small lots.

Bottom line is that to be profitable and make the most of your capital and to help make it grow, turn over your material as quickly as you can given the value of your time, transportation and shipping costs, and buyer constraints. In this case, time really is money.

Mike Meuser

Visit RecyclingSecrets.com for free home based recycling business resources and free how-to manual about recovering gold from electronic and computer scrap

Michael Meuser entered into the salvage and recycling business in the early 1980s. He began with building deconstruction and scrap metals and then moved into electronics, computer and telecommunications scrap where he learned to recover gold and other precious metal. Michael tells his story and offers his advice at his website, RecyclingSecrets.com, and his blog, Recycling Secrets Blog. Also, you can follow Michael on Twitter.