Business Model Of Scrap Dealer By Dilip.

Introduction

Mumbai’s riches are in its garbage,” says Ganesh Gaitonde, Nawazuddin Siddiqui’s character in Sacred Games, as he scripts his rags to riches story in the armpit of the city – its dumping grounds. Gaitonde’s words resonate with thousands of small-scale businessmen who are trying to make a living not only in  India but also all over the world  by selling scrap.

 

 

 

This multi-crore industry born of trash may sound like bare-minimum survival. But it’s a thriving business that employs thousands of small businessmen and ragpickers .

Each and every thing in the world , from pin to plane,  has a life. And when their life ends there comes a value known as salvage (scrap) value. For this scrap material also there is a separate  market where such buying and selling of scrap  takes place.

Case study: Aditya Salvage and Scrap

Established in the year 2000, Aditya salvage and scrap in kharghar,navi Mumbai ,mumbai, is a top player in Scrap dealing business. It's a well known establishment that serves both the locals as well as the customers from all over India. They deal in each and every metal available on the planet.  From pin to plane .

Main source of income :

●        Selling  the  metal scrap as raw material.

●        Reselling of second hand books.

●         Dealing in antique items (like coins)

●        Reselling of electronic items.

●        Gold extraction from E-waste etc

Expenses :

●        Rent

●        Weighing machines

●        Labour cost

●        Interest ( if capital raised from debt)

●        Heavy Machinery cost

●        Various license expenses

 

METALs	Pre-pandemic metal prices (retail level)	Post-pandemic metal prices (retail level)
Copper	320-350	450-488
Aluminum	70-80	120-130
Brass	220-250	300-330

 

Avg turnover for the past one year (19-20)  of Aditya salvage and scrap was nearly 40cr with avg 15 to 20 %  profit. As because of pandemic and fear of viruses many scrap dealers shut down their businesses so instead of falling in the revenue it gradually started increasing with 40 to 50% margin. Just because of monopoly and rise in the prices of metals made more than what they could have made in 2 to 3 years.

At local level only those scrap dealers suffered losses who didn't take the risk and started their business.

The prices  of metals may rise for a short term as there Is an continuous increasing demand for metals in infrastructure development projects, electric vehicles,  advanced machinery etc .

Scrap business is one of the most underrated businesses. People think that making and launching new products can make you wealthy but dealing with the scrap of the old one can also turn you into a billionaire!!