Wondering how to start an auto salvage yard? We take you step-by-step from start to success.
Turning a Profit by Starting an Auto Salvage Yard
Well-stocked auto salvage yards are in high demand by consumers interested in saving cash on car repair and restoration projects. But if you think today's salvage yards are just junk yards by a different name, you have a lot to learn about the modern salvage industry.
Salvage yards pay anywhere from $50 to $1,000+ for old vehicles that are no longer fit for service. The vehicles are then either sold for scrap metal or stripped and sold for parts.
Since part sales are significantly more profitable than the sale of scrap, it's important to stay on top of your parts inventory. To do that, modern salvage yards rely on technology, often using advanced inventory management & tracking solutions that maximize profitability by maintaining an accurate record of the parts that are available and where they are located.
Environmental Concerns for Auto Salvage Startups
Auto salvage startups walk a fine line between achieving profitability and minimizing the environmental impact of salvage on the local community.
By its nature, the salvage yard industry for scrap cars is an environmentally friendly resource for the disposition of vehicles that are no longer serviceable. In fact, many salvage yard operators refer themselves as auto parts recyclers to underscore the environmental benefits of the trade.
However, there the potential also exists for hazardous materials to leech into the environment during the salvage process. Subsequently, all auto salvage operations must take steps to comply with Environmental Protection Agency (EPA) guidelines.
Industry associations such as the American Salvage Pool Association exist to educate members about environmental issues and represent salvage interests to legislative bodies.
Successful Business Plans for Auto Salvage Yards
An effective business plan is your auto salvage yard's stepping stone to profitability and long-term success.
Although there are a lot of tasks screaming for your attention, cutting corners on your business plan can be a precursor to disaster. Even though it takes time to write a high quality plan, there are a lot of arguments why your company can't succeed without an effective business plan.
Before you do anything else, perform a reality check on your startup business plan – and if it's lacking, drop everything and head back to the drawing board.
Review the Competition
Before you open an auto salvage yard within your community, it's a smart move to see how many competitors you have. We've provided the link below to help you find competitors in your city. Complete the form by entering your city, state and zip code to get a list of auto salvage yards that are close by.
Before you open up shop, make sure you know what you will offer to your customers that provides a significant advantage over your competition's offering.
Learning More About the Industry
Once you've finished assessing the competion, it's a wise move to have a conversation with someone who is in the business. Local competitors are not going to give you the time of day, mind you. It'd be crazy for them to teach you the business.
On the other hand, an individual who has an auto salvage yard on the other side of the country will be much more likely to talk with you, given that you don't compete with them in their area. Indeed, many experienced entrepreneurs enjoy offering advice to startup entrepreneurs. Our estimate is that you may have to contact many business owners to find one who is willing to share his wisdom with you.
The key question new becomes: how to find somebody who runs an auto salvage yard in another community?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Advantages of Using a Business Broker
Business owners are decision makers. And the first decision you'll need to make is between an auto salvage yard startup and an acquisition. For auto salvage yard entrepreneurs, there are many reasons why a purchase is more logical than a startup.
Although you could navigate a business acquisition on your own, most prospective auto salvage yard owners enlist the services of a business broker.
The best business brokers will ensure that you get the right business for the right price, and will help you avoid common auto salvage yard acquisition mistakes.
Explore Franchising Options
Recognize that your chances of surviving in business immediately improve when you choose to franchise instead of doing it all on your own.
Before you get too far along in your plan to open an auto salvage yard, you ought to check out whether there are good franchise opportunities available that might be worth investigating.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you sell to auto salvage yards, this isn't the right place for you. These resources are more appropriate for you:
If you are interested in starting a different kind of business, please browse our directory of guides below.