Getting into compliance in the scrap metal industry is getting tougher and more expensive every day as new compliance laws are being passed by law makers who fail to understand the weight and burden they are placing on the smaller mom and pop operations that are the backbone of America's scrap metal industry.
Many scrap metal dealers have closed their doors over new scrap metal laws. Several dealers have reported that the requirements have stalled their flow of scrap metals cutting the flow of scrap metal in half as many of their customers don't have the required documents to sell scrap metal.
While I have found that most scrap metal yards are more than willing to help the local authorities fight crime. Many I have spoken with feel like local authorities are putting too much pressure on the local business to do their crime fighting for them.
Our conversations with scrap yard owners have revealed a willingness to get into compliance, but at what cost?
Scrap Yard Compliance Does Not Have to Be Expensive
Some of the older compliance software companies are charging scrap metal dealers upwards of $30,000 to $50,000 to get in to compliance only to find out that it does not stop the crime and local detectives are still interrupting their businesses and costing them even more money in down time.
The most common scrap metal compliance laws in the U.S. requires dealers to get a photo of the sellers ID, a photo of the seller at the time of of the purchase, the license plate of the vehicle used to transport the metals, a photo of the material being purchased, with many states requiring fingerprints and electronic signatures uploaded daily to websites that detectives can scan for stolen materials.
The common joke is that the only thing left to collect is a blood and urine sample. It really is getting tougher for the smaller yards to compete with the larger buyers of metals when it takes so much time and money to get into compliance.
Many of the software compliance vendors are trying to help by lowering the prices of their products and creating easier to use software / hardware solutions in an effort to assist with the daily collection of compliance images and reporting.
In the last few years several new compliance software companies have surfaced offering more affordable solutions causing the older mature companies to scramble to stay competitive.
The oldest software providers like 21st Century Programming, BuyBackPro, Scrap Dragon and Shared Logic are finding themselves in a price war with companies like ScrapRight, Nexus and PopScrap.com who are offering newer technology at much lower prices.
All in all, there are over 20 companies now offering scrap metal compliance software solutions to the world-wide industry. With the power of mobile technology on the rise one of these companies is now offering fully state compliant Android app that is far more cost effective for the smaller yards.
Competition is the best thing to happen for the scrap metal dealer who is the end user of these scrap metal compliance software solutions where hardware integration is a must.
As a special note, one of the newer companies, Popscrap.com, is now offering a online program called "ScrapShield Sheriff", where local detectives can get real-time scale ticket data without compromising the scrap dealers critical business information. This new product is exciting the compliance authorities for its ease of use, simple interface and it is offered completely free to the local authorities, unlike many of the reporting companies like Leads Online and Business Watch International who charge the local detectives for access to day old compliance data.
Real time crime fighting data will soon be the standard as the local police will need to see images immediately after a material is reported stolen since every minutes counts in recovery of stolen scrap metal.
Time will tell how many more laws can be thrown on to the backs of scrap metal dealers before they quit and find new ways to make a living.
At the end of the day, cash is king, and those with cash will buy up the smaller feeder yards and the big players will get bigger and the smaller mom and pop operations will smelt way under the struggle to help the authorities to do their job.
Not to add insult to injury but most American scrap dealers don't even know the impact of the new health care law and the fines and fees that accompany this poorly constructed law. Its anticipated to be the straw the broke the scrap dealers back.
Welcome to the new America where small businesses have to pay to do the job of local government agencies who fail to do what they were already paid to do. But that's another story.
PopScrap has compliance specialists in your area ready to help you. Call us at 888-440-8858 or fill out our online form for more information.