Complete Guide to Maximizing Recycling Business Profit Margins (2024)

Considering the saying that, “one man’s trash is a treasure for another”, recycling is gaining a boom as the world is becoming environmentally conscious. People are sincerely undergoing waste reduction and recycling programs to not just conserve natural resources, but evenly contribute towards sustainable practices as well as reduce their carbon footprints.

Amidst all these developments taking place and the challenges being witnessed, the recycling businesses are significantly growing. 

That’s why here we dive into some strategies and practical tips that will help you maximize your recycling business profit margin along with attaining sustainable practices. Whether you’re already in the recycling industry or thinking of starting a recycling business, these insights will prove invaluable in achieving your goals.

Understanding the Recycling Industry Landscape

Current Market Trends

Americans consist of around 4% of the total population, though it produces 12% of the planet’s trash. This figure is quite dangerous when the statistics show that it is contributing in throwing away 4.9 pounds of trash per person every day – which is nearly around 1,800 pounds of materials per American every year. The majority of waste discarded by homes or businesses in the US is dumped into landfills or burned in incinerators.

Profit Potential Analysis

Initial Investment Requirements

You must account for recycling businesses depending on your niche and should typically include:

• Processing complexes involved 
• Costs involved in the transportation of recyclable materials
• Employees and support team’s salaries
• Waste management equipment and vehicles used
• Utilities, solid waste permitting, licenses, etc.

For instance, the cost you need to recycle can be around $30 on average, while landfilling may cost around $50 per ton, and incineration costs $60 to $75 per ton.

Expected ROI Calculations

Not just this, 

• The recycling industry has been successful in driving over 500,000 jobs in America and started creating more than $100 billion in revenue. For instance, it created 6,81,000 jobs in the year 2012. This equates to the creation of 1.17 jobs for every 1,000 tons of materials recycled.
• Along with this the metal, paper, plastics, electronics, textiles, and glass in the recycling stream are inherently valuable as seen in the example given above for cell phones. 
• In spite of the fact that commodity markets do fluctuate, most of the recycling waste still commands high prices, especially materials like PET, used in water bottles, which can be sold for $309 per ton, or clear HDPE, used in milk jugs, can be sold for $734 per ton, on average in 2018.
• Lastly, China’s National Sword Policy banning foreign scrap from recycling and waste management businesses of various countries across the globe was a wake-up call towards undergoing strong recycling practices. When China denied import of the contaminated waste, it started getting piled up in the home countries creating a surge to invest in domestic infrastructure, process our own waste, and deliver higher quality bales of recycled materials.

Hence, keeping the statistics and data in mind, people started recycling plastic, cardboard, and metal into sellable products like bottles and sheets of metal. This can be lucrative when you consider the below fact.

7 Most Profitable Recyclable Materials

After considering the need of undergoing sustainable recycling practices, what should be the mindset of recycling centers? It should be to identify and focus on profitable recycling materials which help them thrive in their recycling businesses. 

Here are some of the identified profitable recycling materials and unique ideas for a recycling business that can help recycling companies maximize their profit margins.

1. Textile Recycling

Market Demand

As per the report circulated by IMARC Group, titled “Textile Recycling Market”, the global textile recycling market was valued at $5.2B in 2022 which is projected to reach $6.1B by 2028, exhibiting a growth rate (CAGR) of 2.85% during the forecasted period of 2023-2028.

Processing Requirements

Under textile recycling, recyclers make money by recycling textiles which can include discarded clothing, along with other smaller sources including furniture, carpets, tires, footwear, and other nondurable goods such as sheets and towels. This can also include leather and rubber.

The recycled material is then sold to companies that use them to manufacture new products. An instance of products created from recyclable materials are insulators and stuffing for pillows or mattresses. Another profit-making way from textile recycling is to burn them to create electricity and sell them back to power companies. This is however not an eco-friendly option due to smoke and other harmful pollutants released in the air.

Profit Margins

Textile recycling offers several economic and environmental advantages. A few of them are, It reduces the reliance on virgin fibers, minimizes land and water pollution, and decreases the use of chemical dyes. It also encourages sustainable and responsible production and consumption patterns, which are becoming more critical in today’s global climate.

Best Practices

The recent data by EPA suggested that textile recycling accounted for 6% of total recycling in the US.

2. Glass Recycling

Market Demand

The global recycled glass market size was valued at $4.14 Billion in 2020 and is projected to reach $6.56 Billion by 2028, growing at a CAGR of 5.94 % from 2021 to 2028.

Processing Requirements

• Glass recycling turns up to 20% of all the materials sent for recycling. So it can be found that it is not that lucrative to recycle. However, due to eco-friendly reasons, it is still crucial to undertake glass recycling.
• Considering and acknowledging the fact that glass can take 4000 years to decompose in a landfill, you can estimate the urgency to undergo glass recycling. Hence, glass recycling is a must to do the job regardless of profit margins.
• The recycled glass material is purchased as a substitute for sand, which is then used while making new glass. When it is used as a substitute for sand, it should cost less than sand for the businesses who want to make a purchase of it. But to your surprise, glass is one of the heaviest materials to transport making it a bit expensive.

Profit Margins

So, it can be concluded that although the recycling plants take a loss on glass they can easily save when it comes to energy. It is because the recreation of glass packaging from used glass takes 30% less energy and 50% less pollution than creating it from scratch.

Best Practices

The global recycled glass market size was valued at $4.14 Billion in 2020 and is projected to reach $6.56 Billion by 2028, growing at a CAGR of 5.94 % from 2021 to 2028.

3. Metal Recycling

Market Demand

No one can deny the fact that metal dominates the market. Scrap metal recycling is one of the lucrative businesses to conduct.

Processing Requirements

Ferrous metals, such as iron or steel, generates low-profit margins when recycled, however nonferrous metals like copper, brass, stainless steel, and bronze, are more valuable.

Profit Margins

When compared to a plastic recycling business, scrap metal recycling plants have the potential to earn more profits due to the higher value of metals.

Best Practices

Recommended: Recognizing the recent recycling trends and understanding the components of a recycling business plan can be fruitful for your recycling business, so give it a good read.

4. Plastic Recycling 

Market Demand

Recycling plastic can be challenging to profit from, particularly if you don’t properly choose and separate the most expensive plastic varieties. Due to their poor value, some plastic recycling companies are even thinking about stopping the processing of mixed plastics. On the other hand, recycling cans and corrugated cardboard can be more profitable due to their higher value.

Processing Requirements

Depending on their market worth, certain plastic kinds can be recycled more profitable than others; at the moment, PET bottles and jars are among the most valued. The price of oil, which is used to make PET, has gone up, but this has also raised the price of these bottles and improved profits for recycling facilities. A different profitable kind of HDPE is natural HDPE.

Profit Margins

Recycling plastic can be challenging to profit from, particularly if you don’t properly choose and separate the most expensive plastic varieties. Due to their poor value, some plastic recycling companies are even thinking about stopping the processing of mixed plastics.

Best Practices

Proper sorting and separation of high-value plastic varieties are crucial for profitability.

5. Cardboard, Paper Recycling, and Fiber Recycling

Market Demand

In 2017, the US earned $3.2 billion from exports of scrap paper and fiber. However, the market for recycling cardboard is declining. Only less than 300,000 tons of corrugated containers were recycled.

Processing Requirements

Nevertheless, still, there is a good return over recycling cardboard. Retailers like Kmart, Sears, and Target load their flattened boxes into the machines which come up as bales and the retailers can resell it for more than $74 per ton. On the contrary, groceries and big boxes used to recycle 90% to 100% of their cardboard.

Profit Margins

The profitability of cardboard recycling is again interlinked with China’s National Sword Policy that bans no longer accepting bales of contaminated cardboard. An example of this is a pizza box with a piece of pizza left in it would not be accepted. As a result of this, recycling plants are struggling to find buyers for cardboard due to the decline in Chinese exports. Resultantly, they have to bear the cost of piled-up cardboard waste materials ending up in landfills.

Best Practices

Avoiding contamination of cardboard, such as pizza boxes with leftover pizza, is crucial for maintaining profitability.

6. Electronic Business (E Waste Recycling Business)

Market Demand

• Precious metals like gold, silver, and platinum are in-built into the circuit board of recyclable electric waste which has a higher market value. Recycling processes here include sorting, dismantling, mechanically separating, and recovering valuable metals.
• Because of the consistent technological advancements, the need for electronic recycling is on the rise. You will be amazed to know that every year the cell phones and other electronic waste we dump contain over $60 million in gold and silver. These figures are enough to determine how essential it is to carry out electronic recycling activities.

Processing Requirements

Recycling processes include sorting, dismantling, mechanically separating, and recovering valuable metals like gold, silver, and platinum from circuit boards.

Profit Margins

Precious metals like gold, silver, and platinum are in-built into the circuit board of recyclable electric waste which has a higher market value.

Best Practices

Europe is the first one to rule over the global e-scrap recycling market in 2021 and Pacific Asia and North America are expected to follow Europe next.

7. Wood Recycling

Market Demand

Reclaimed wood is currently one of the most valuable materials for recycling.

Processing Requirements

It can be collected from various sources, such as old buildings, decks, sheds, and fences, and sold to sustainable furniture brands.

Profit Margins

The wood can also be used to create sustainable flooring or natural wood bed frames, providing both eco-friendliness and profitability.

Best Practices

Collecting and repurposing reclaimed wood from various sources is a profitable recycling practice.

Optimization Strategies

1. Increases Operational efficiency

A crucial step in improving recycling business efficiency is creating the most optimal waste collection routes to reduce fuel consumption, carbon emissions, and overall costs. You can consider route management software to optimize routes based on location, type of waste, traffic, and urgency. 

You can also schedule daily pickup and collection tasks by importing your regular customers’ addresses to minimize the time taken to upload information and expedite route planning. Investing in smart waste sorting technologies can also help you improve efficiency.

2. Cost Management

By optimizing routes, you can reduce distances and accommodate last-minute changes to ensure reducing the number of trips and manage transportation and vehicle maintenance costs. You should also schedule pickups based on customers’ preferred time windows to avoid missed pickups and costs associated with extra trips required to cover them.

3. Marketing and Sales

• Consider creating a site for your company that lists your services and prices. It should be engaging and display attractive CTAs. 
• Optimize your site regularly to ensure high visibility, traffic, and conversions.
• Run paid ads initially if your budget allows as it can help you boost visibility in a short span. 
• Promote your brand across various social media platforms, including Facebook, Instagram, and LinkedIn.
• Partnering with eco-conscious influencers can also attract more audience and service requests. 

Conclusion

Inching closer to the conclusive note, tell us what are you up to? When you already got an idea of how lucrative as well as sustainable carrying out recycling business is. So, what’s making you wait longer? Start practicing the above-mentioned profit-making activities for your recycling business and see what wonders it does.

Here, we discussed previously, optimizing your other recycling business operations cannot be neglected. And that’s why using a leading routing software like Upper can reduce your extra workload of route planning. 

So, without any further ado, start your 7 days FREE trial with Upper today and experience how advanced route planning and optimization can transform your recycling business.