How to Start a Junk Shop Business

September 26, 2010 27 Comments

A junk shop and scrap business is a simple buy and sell business, which is less considered by many since the traded products are unclean and soiled. But in another view, it is a lucrative business that generates a lot of money both for garbage collectors and junk shop owners. This business is most relevant today considering that the government has promoted environmental awareness among its citizens, expressing the need for proper waste disposal and recycling of materials as a major factor in protecting the environment.

As one of the sectors involved in the country’s Solid Waste Management, junk shops are now being recognized for its large contribution in recycling activities and waste recovery.

I. ESTIMATED INVESTMENT COSTS
Minimum Starting Capital Investment: P100,000.00

Fixed Investment

  • Business licenses and registrations
  • Security (refundable) and advance rental deposit equivalent to 4 months, if business space is on lease/rent
  • Operating Equipment
    • Weighing scale (Bascula)
    • 50-kg. countertop/hanging weighing scale
    • 2 Metal push-cart (cartilla)
    • Acethyline Torch and Gas Tank
    • Pulley
    • Tools (steel saw, pliers, vice grips, screw drivers, hammer, “baretta de cabra”, etc.)
  • Vehicle, pick-up-truck (optional)
  • Renovation, in case of land lease
  • Miscellaneous

Revolving Fund

  • Purchasing cash

Labor Cost

  • 1 General Manager
  • 1 Officer-in-Charge (minimum wage)
  • 1 Driver/Helper who can also act as Checker (minimum wage)
  • 2 Helpers who can also act as checkers (allowance + free board)

II. THINGS TO CONSIDER
A) Sourcing of Potential Clients Clients are recycling agents to whom the junk shop owner will be selling the junk items, which have been sorted and segregated. The junk shop owner must search the market for several possible recycling agents to get the best deal possible such as a lock-in period with regard to the buying price of a specific item within one month. Cost of delivery/pickup also affects the price and should always be taken into consideration. The junk shop owner must bargain for the best deal possible and coordinate with the respective recycling agents as to the payment schedule and volume of deliveries or pick-up.

B) Walk-in Procedure for Retailers
Retailers are the scavengers, with or without pushcarts, and residents of nearby communities and local business establishments. To avoid pilferage and maintain an accurate inventory, a step-by-step procedure should be applied in the business:

  1. The walk-in customer/retailer with the recyclable items will be met and assisted by the helper. The helper will inspect the items and sort it out if needed. He will be the one to put the items in the weighing scale.
  2. The OIC will then do the actual weighing. He will fill up a “weigh slip” wherein the type of item and its corresponding weight is reflected and his signature is affixed. The OIC shall submit the slip to the Cashier.
  3. The helper shall then transfer the weighted items to the corresponding stock area.
  4. The Cashier shall compute the total amount due to the customer.
  5. The customer must personally receive the amount and sign the slip of paper as proof of payment.
  6. The cashier shall file all Weigh Slips on a daily basis.

C) Daily Accounting
On day one of operation, a pre-determined amount shall be the basis of the Starting Purchasing Cash (SPC), which shall be maintained and replenished at the start of each working day.

  • At the start of each working day, the Cashier shall count the SPC, which should be the pre-determined amount as mentioned.
  • At the end of each working day, the Cashier shall make a summary of all purchases and enter it in a log book based on the filed Weigh Slips.
  • The Cashier shall also note down all expenses made for the day, excluding purchases on a separate log book.
  • The SPC less all purchases and expenses of the day should match the existing cash-on-hand.
  • The Cashier shall then make a cash count for the day.
  • All cash in-flow coming from the Junk Shop’s sale to the clients shall be directly deposited to business’ bank account.

D) Trading Process

  • Buying
    1. Search for potential wholesalers who have by-products in their businesses that would fall under the categories that the junk shop owner would be buying.
    2. Buy directly from wholesalers/establishments with by-products or junk items.
    3. Tap scavengers by providing them wooden pushcarts (kariton) on the condition that you will have the priority of their junk products and these will be bought at a lower cost to cover for the cost of the cart.
    4. Give incentives (e.g. allow advances up to a certain amount to maintain the in-flow of materials, with the limit on advance and up to the prerogative of the junk shop owner)
  • Selling
    1. Sourcing of potential clients must be a continuous process.
    2. The following are the basic factors to consider as to whom each type of item/material is to be sold: a) payment terms; b) schedule and volume of pick-up and/or delivery.
    3. If there is a broker or agent for the client, it should be pre-agreed upon by both the Junk Shop and the Client that all payments should be made directly to the Junk Shop owner or his duly authorized representative.

III. ESTIMATED COSTING AND PRICING (as of February 2009)

IV. ESTIMATED MONTHLY PROJECTED STATEMENT OF OPERATIONS


V. REGISTRATION REQUIREMENTS

Business Name Registration

For Sole Proprietorship:
Department of Trade and Industry (DTI) within the National Capital Region (NCR)

  • 12/F Trafalgar Plaza, 105 H.V. Dela Costa St., Salcedo Village, Makati City Tel. No.: 811.8232 loc. 208
  • 2/F Park N’Ride, Lawton, P. Burgos Ave., Dr. Basa St. Ermita, Manila Tel. No.: 536.7153
  • G/F Highway 54 Plaza, EDSA, Mandaluyong City (across SM Megamall) Tel. No.: 706.1767
  • 5/F Araneta Square Mall, Monumento Circle, Caloocan City Tel. No.: 332-0854 / 332-0829

For Partnership/Corporation:
Securities and Exchange Commission (SEC)
SEC Building, EDSA, Greenhills
Mandaluyong City
Tel. No.: 584.0923
or contact the concerned Office in the province where the business is located

License to Operate

Mayor’s Permit/Residence Certificate and Sanitary Permit
Contact the local municipality or provincial municipality where the business is located.

Application for Tax Identification Number (TIN)/ Application for Authority to Print Receipts and Invoices/ Registration of Books and Accounts

Bureau of Internal Revenue (BIR)
BIR National Office Bldg.
Agham Road, Diliman, Quezon City

Trunklines: (632) 981.7000 / 981.8888
Email: [email protected]
Website: www.bir.gov.ph
or contact the Regional or District Office where the business is located.

VI. TECHNICAL ASSISTANCE
Technology Resource Center (TRC)
TLRC Building, 103 J. Abad Santos cor. Lopez Jaena Sts.,
Little Baguio, San Juan, Metro Manila
Tel. Nos.: (632) 727.6205
www.trc.dost.gov.ph

IV. LIST OF RECYCLING CENTERS

Batteries / Tires

Philippine Recyclers, Inc.
Marilao, Bulacan
Tel: 299.6202 to 03

Tire Recycling
711 Vermillion St., Agro Homes
Muntinlupa City
Tel. No.: 861.6350 Fax No.: 862.1452

Caltex Julia Vargas
“Bantay Baterya Project”
Mandaluyong City
Tel. No.: 634.3812

Computers

Envirocycle Philippines, Inc.
Daystar Industrial Park, Pulong
Sta. Cruz, Sta. Rosa, Laguna 4026
Tel. No.: 520.8618 to 19
Fax No.: 520.8546

HMR Super Surplus Bodega
Pioneer corner Reliance Street,
Mandaluyong City
Tel. No.: 634.0526

Paper

Container Corp. of the Phils.
60 Old Samson Road, Balintawak 1106
Tel. No.: 361.9801 to 06
Fax No.: 362.3607

Globe Paper Mills
1000 Gov. E. Pascual Avenue
Malabon, Metro Manila
Tel. No.: 361.2516; 242.7321
Fax No.: 242.0198

Asia Paper Industrial Corp.
62 Gregoria de Jesus St.,
Balintawak, Kalookan City
Tel. No.: 432.8000; 983.8000

Sunrise Paper Mills
3549 M. Delos Reyes St.,
Gen. T. De Leon, Valenzuela, City
Tel. No.: 293.3002; Fax No.: 291.5117

Plastics

PEMA Plastic Mfg., Corp.
80 Mendez Road, Baesa, Quezon City
Tel. No.: 361.2844

Synber Mfg., Inc.
Meliton Espiritu Avenue
corner Sucat Road, Parañaque City
Tel. No.: 825.5356/ 826.7827
Fax No.: 826.7228

Polysterene Packaging Council of the
Phils. Rm. 900-1 Victoria Bldg.,
UN Ave., Ermita, Manila
Tel. No.: 526.0889 Fax No.: 522.4354

Interpolymer Corporation
Malabo-Maysan, Valenzuela City
Tel. No.: 292.4878 Fax No.: 292.7726

Metals

Alliance Foundry Shop & Eng., Inc.
135 J. Teodoro St., cor. 10th & 11th Ave.
Caloocan City
Tel. No.: 362.0039

Kim Bee Foundry
329 J. Theodoro St., cor. 9th Avenue
Caloocan City
Tel. No.: 361.1173 Fax No.: 365.8783

A. Metal Recycling Corp.
380 Barangka Drive cor. Hinahon St.,
Mandaluyong City
Tel. No.: 533.4719 Fax No.: 533.4717

Hilton Mfg. Corp.
648 T. Santiago St., Linunan
Valenzuela City
Tel. No.: 292.8134

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