Business Overview

A junkyard, also commonly known as a salvage business, collects items consumers no longer deem usable. This “scrap” is then transformed to meet the requirements of specific buyers. Scraps and raw materials can be acquired from junked appliances, vehicles, furniture, and demolished houses. Junkyard owners dealing in automobiles acquire decommissioned vehicles from individuals and companies. They serve as either a short-term collection and storage facility for vehicles on their way to another destination or as the auto’s final resting place. For the latter, junkyard owners remove any valuable parts for resale and crush the rest.

Who is this business right for?

To realize significant success in this industry, one must possess strong technical knowledge regarding the nuts and bolts of the items they wish to salvage. They have a thirst for knowledge, continuously seeking out new opportunities to expand their services and further serve their community. Additionally, this person must have a genuine love for working with people and helping them see the beauty in another person's junk. Entrepreneurs who are passionate about reducing our carbon footprint and who enjoy helping others stretch their limited budget would be the most fulfilled in this profession.

What happens during a typical day at a junkyard business?

As a junkyard owner, your business will primarily be serving the local community. Depending upon your skill set, you will salvage everything from automobiles, motorcycles, and appliances, to furniture. You and your team will spend the majority of each day acquiring these new items and breaking them down for parts, also known as sorting. Once this process is complete, you will need to repair items slated for restoration and junk any unusable materials. These are typically crushed and sold to other salvage yards for processing or further recycling. Parts and restored items must then be inventoried. Maintaining a complete list of all inventory is critical to your business’ success.

Prospective customers will come to you, via telephone or in person, to determine if you have the parts they need. Once you have either located the part or removed it at their request, the client will pick it up at your facility.

What is the target market?

Ultimately, a junkyard’s target market is anyone seeking an affordable option to fix or replace an item they need. The specifics vary based on the needs of the community. Conducting thorough market research prior to developing a business plan is recommended. This will help understand market needs and identify niche markets your business should target. Once you’ve defined your niches, you can then determine what types of individuals and businesses might require your services. Grocery stores, factories, building contractors, construction companies, automobile outlets, homeowners, and electronic companies are all potential clients to consider.

How does a junkyard business make money?

This business is about buying and reselling for a profit. Therefore, it is critical that business owners are able to identify any usable parts, as well as their value. Parts and components must be accurately priced to ensure the business recoups their investment, labor costs, and ongoing expenses. Teams with the proper skill set typically repair salvageable items, generating a larger return on their investment.

What is the growth potential for a junkyard business?

As an important part of this country’s green efforts, the junkyard industry has seen a spike in growth. Automobiles are the most recycled product, with virtually 100% of all dead vehicles being recycled. This niche records annual sales of over $32 billion and is represented by businesses of every size. The key to long-term growth is understanding your community’s needs and possessing the right connections to deliver.