How to become a Scrap dealer in India

By the Scrap Bhai team · Updated 13 November 2026

Who is a Scrap dealer

The Scrap trade has several levels. A kabadiwala collects from homes and shops. A Scrap dealer or godown owner buys from many kabadiwalas and the public, sorts and grades the material, and sells in bulk. A big trader supplies full truckloads to furnaces, mills, paper mills and recyclers, and a recycler or processor turns Scrap into raw material. Most dealers grow step by step from collection to a godown. Scrap dealer को हिंदी में कबाड़ी या Scrap व्यापारी कहते हैं।

Skills a Scrap dealer needs

• Material identification: every grade of iron, stainless steel, copper, brass, aluminium, paper and plastic. See Types of Scrap.
• Rates: following daily rates and the trend, and knowing what each buyer pays.
• Deal maths: margin per kg after transport, labour, weight loss and deductions.
• People: treating sellers fairly so they come back, and negotiating with buyers.
• Records and tax: bills, weight slips, GST, reverse charge and TDS on metal Scrap.
• Fraud sense: spotting fake buyers, fake payments and stolen material.

Steps to become a Scrap dealer

1. Get real experience through collection, a small shop or working with an experienced dealer.
2. Choose your materials: start with those you know well and that have buyers near you.
3. Plan the money, especially working capital. See Scrap business investment.
4. Set up a godown with road access, sorting space, covered storage and a verified scale.
5. Complete registrations: GST, Udyam, trade licence and any local police rules. See the licence guide.
6. Build your network of sellers and buyers, below.
7. Add staff and transport as the volume grows.
8. Keep clean records of every purchase and sale from the first day.

Build your sellers and buyers

Sellers: where material comes from

• Kabadiwalas in your area, who want a fair rate and quick payment.
• Shops, markets, offices and housing societies.
• Workshops, factories and construction sites, through regular contracts.
• Government and PSU auctions, through MSTC and other e-auction portals.

Buyers: where material goes

• Bigger dealers and traders in your city.
• Furnaces and rolling mills for iron and steel.
• Paper mills for gatta and paper, plastic recyclers for plastic.
• Registered recyclers for e-waste and batteries.

Keep at least two or three buyers for each material, so one buyer’s low rate or late payment never stops your business.

Get customers online

• Google Business Profile: your shop on Google Maps with address, phone, timings, photos and reviews. This is how people searching for a “Scrap dealer near me” find you.
• WhatsApp Business: a catalogue of what you buy, quick replies and a status with rates.
• Facebook and Instagram: photos of your yard, honest weighing videos and happy customers.
• Local groups: housing society, market and industry groups for pickups and contracts.

How Scrap dealers earn

A dealer earns on volume × net margin per kg, minus fixed costs. Sorting, bulk selling to bigger buyers, fast-paying customers and steady factory sources raise the earning; credit defaults, wrong grades, weight loss and rate falls cut it. Work out your own numbers with the formula in Scrap business profit margin, rather than trusting anyone’s fixed figure.

Trust and safety

• Weigh in front of the seller on a stamped scale and give a slip.
• Pay the rate you promised, on time. Your name is your business.
• Check new buyers’ GST numbers and start with small lots.
• Never pay advance money for material you have not seen.
• Refuse material without a clear source.

ईमानदार कांटा, सही रेट और समय पर पेमेंट: यही एक अच्छे Scrap dealer की पहचान है।

Common questions

What is a Scrap dealer?

A Scrap dealer buys Scrap from kabadiwalas, shops, factories and the public, sorts and grades it, and sells it in bulk to bigger dealers, furnaces, mills and recyclers. In Hindi a Scrap dealer is often called a kabadi or kabaadi wala, and a bigger one a Scrap trader or godown owner.

How do I become a Scrap dealer in India?

Master material grades and rates, start with collection or a small shop, build a list of steady sellers and two or three reliable buyers for each material, set up a godown with a verified scale, complete GST, Udyam and local registrations, and keep clean records of every deal.

How much does a Scrap dealer earn?

There is no fixed income. A dealer’s earning depends on the volume handled each month, the net margin per kg after costs, how fast the money rotates and how much is lost to credit, weight loss and mistakes. Two dealers in the same city can earn very differently.

How do people find a Scrap dealer near me?

Most people search on Google Maps or ask on WhatsApp. A complete Google Business Profile with your address, phone, timings, photos and reviews is the best way to appear when someone searches for a Scrap dealer near them.

This guide is general information, not legal, tax or investment advice. Rules and rates change, so confirm the details with a CA or your local office before you act.