Is a junk shop a good business in the Philippines?

A summary, not legal advice. Checked October 7, 2026.

A junk shop can be a good business in the Philippines, but most stay small. In a 2024 study of Iloilo City junkshops, 76% reported average monthly income of ₱8,000 to ₱80,000, 20% reported ₱100,000 to ₱400,000 and 4% more than ₱1 million. The margin per kilo is thin, so profit depends on volume, sorting, and tight control of weight and cash.

What do junk shops actually earn?

The most detailed Philippine numbers we found come from academic surveys, and they show a wide spread. The Iloilo study, by researchers from Central Philippine University and the Iloilo City government, published in Applied Environmental Research in 2024, surveyed junkshop owners and managers. Its income bands are what owners declared:

• 76% earned an estimated ₱8,000 to ₱80,000 a month.
• 20% earned ₱100,000 to ₱400,000 a month.
• 4% earned more than ₱1 million a month.
• Almost 81% had started with ₱100,000 or less in capital, and the rest with ₱100,001 to ₱250,000.

A 2024 undergraduate paper from the same university on junkshops in nearby Pavia, Iloilo found monthly incomes from ₱6,000 to ₱80,000, among shops that had run for 3 to 18 years. So most small junkshops earn a modest living, and a few big operators earn far more.

DTI's starter guide for junkshops, printed in 2010, gives a projection that it labels hypothetical: ₱100,000 in monthly sales, ₱60,000 cost of goods, ₱35,800 gross profit after utilities and other variable costs, and ₱13,596 net profit after wages for two workers and ₱5,000 rent. It assumes a 40% mark-up on what you buy. Take it as a shape, not a promise.

The money moving through the trade is large even when each shop is small. The 26 Iloilo shops surveyed together handled about 1,584.83 metric tons of recyclables a month, which the researchers valued at ₱18.7 million.

Where does the margin come from?

You earn the gap between what you pay per kilo and what the trading company pays you, times the kilos you move, minus rent, wages, hauling and losses. DTI's 2010 guide shows how thin that gap can be. Its February 2009 prices, buying from the kariton versus selling to the recycling center:

• Red copper: buy at ₱140, sell at ₱150 a kilo.
• Yellow copper (tansong dilaw): buy at ₱90, sell at ₱105.
• Aluminum cans: buy at ₱25, sell at ₱35.
• GI sheets and ordinary steel: buy at ₱7 to ₱8, sell at ₱10.
• Cartons: buy at ₱2.00, sell at ₱2.50.
• Clear plastic cups: buy at ₱5, sell at ₱12.

Those prices are old, but the pattern holds: a few pesos a kilo on bakal and karton, more on some plastics and metals. Volume is what turns a small spread into income. Example with made-up round numbers: a ₱2 spread on 20,000 kg of bakal a month is ₱40,000 before rent, wages, hauling and losses. Lose 3% of that weight between your scale and the buyer's and ₱2 a kilo shrinks fast.

Sorting and grading add value. In the Iloilo study, small junkshops only sorted and cleaned, while bigger ones also crushed, cut, ground, washed, dried and baled. Red and yellow copper, for instance, carry different prices in the DTI table, so a seller who mixes them gets the lower one. Prices are also negotiated: the study found many Iloilo owners would not post a price list because the price depends on the day's market, the quantity, and the seller.

What happens when prices swing?

Prices change and you cannot control them. The Iloilo paper says prices move up and down with what recyclers pay and their processing costs. In February 2015, Davao Today photographed a collector whose junkshop buying price for empty plastic bottles had dropped from ₱5 to ₱3 a bottle, and for tin cans from ₱3 to ₱1 a kilo.

The risk for a junkshop is stock. If you bought a yard full of bakal at last week's price and the trading company cuts its price, you sell at a loss or you wait, and waiting ties up your buying cash. The DTI guide's advice is to ask buyers for a price locked in for a month on specific items, and to keep looking for buyers instead of depending on one. Turning stock over quickly, and adjusting your buying prices as soon as the trading price moves, limits the damage.

How big is the stolen goods risk?

This is the risk that can close a shop. Under the Anti-Fencing Law (Presidential Decree No. 1612), anyone who buys or keeps an item they knew, or should have known, came from robbery or theft commits fencing. Section 5 makes mere possession of stolen goods prima facie evidence of fencing. The penalty grows with the value of the goods and can reach 20 years for large amounts.

Copper cable is the usual problem. When police in Davao City arrested 27 people for cable wire theft in April 2024, GMA Regional TV reported that those who bought the copper wire may also face charges under the Anti-Fencing Law. The practical rule: be wary of cut telco or power cable, brand-new looking material in large amounts, and sellers who cannot say where a load came from. Many cities add their own rules on regulated materials and record books, which our guide "Junkshop permit requirements and record books in the Philippines" covers.

Why your weight and the buyer's weight differ

When you deliver, the trading company weighs the load on its own scale and pays on its own number. Any gap comes out of your margin. It can come from your scale or theirs being off, from wet karton drying out in the yard, from rejects they pull out, or from someone cheating. The Consumer Act (Republic Act No. 7394, Article 64) makes it a prohibited act to fraudulently give short weight or to misrepresent the weight of anything bought or sold by weight, and Article 62 calls for weighing instruments in consumer transactions to be sealed by the city or municipal treasurer every six months.

Example with made-up round numbers: you load 5,000 kg of bakal by your scale and the trading company accepts 4,850 kg. At ₱15 a kilo, the 150 kg gap costs you ₱2,250 on one trip. Over four trips a month that is ₱9,000. The defence is records: weigh every load before it leaves, note truck gross and tare, keep your scale sealed, and compare every delivery with what the buyer accepted so you can see which buyer or which material keeps coming up short.

What other problems do owners report?

• Cash handling. Every purchase is paid in cash on the spot. The DTI guide sets out a weigh slip routine to avoid pilferage and a daily cash count that should match starting cash minus purchases and expenses. Without both, small leaks go unnoticed.
• Space, permits and neighbours. The Iloilo study notes the city's 2,000 square metre minimum lot area for junkshops, which most surveyed shops did not meet, and owners reported stock piling up outside the yard and flooding. The Pavia paper reports problems with air quality and drainage.
• Fire. Residents blamed a firecracker for the fire that destroyed a Dagupan City junkshop, the family's house and a truck on January 1, 2024, according to GMA Regional TV, and GMA News reported a fire that hit several junkshops in Barangay Sangandaan, Quezon City, on July 19, 2024. Stacks of paper and plastic burn fast.
• Hazardous items. Used lead-acid batteries are hazardous waste under Republic Act No. 6969, as GMA News reported in September 2024. If you plan to buy them, ask the DENR Environmental Management Bureau regional office what registration you need first.
• Stigma. The Iloilo paper notes that junkshops are often seen as unglamorous, and a couple profiled by GMA News in 2022 said people looked down on them for working with basura. They built a warehouse and a house from the business anyway.

Junk shop business pros and cons

• Pro: low entry cost. Most Iloilo shops started with ₱100,000 or less.
• Pro: steady supply. Households, collectors and businesses produce kalakal every day, and the Iloilo shops recovered about 10.65% of the city's daily waste.
• Pro: established buyers. The Iloilo shops sold paper, plastics, glass and metals to bigger junkshops and consolidators in Iloilo, Metro Manila, Cebu and elsewhere.
• Con: thin margins per kilo that depend on volume.
• Con: prices you do not control.
• Con: legal exposure under the Anti-Fencing Law if you buy goods you should have known were stolen.
• Con: cash-heavy daily work, dirty yards, fire risk and drainage problems.

Who is a junk shop a good business for?

It suits someone who can be at the yard every day, is comfortable haggling over a kilo, already knows collectors or businesses that generate scrap, has cash for the daily buying float beyond the setup cost, and can find a site the city will permit. It suits people who keep records, because the money is made or lost in small gaps: a few kilos at the buyer's scale, a few hundred pesos in the drawer, a load nobody asked about. It does not suit a passive investor who wants to hand over cash and check in monthly.

If you want to see those small gaps, ScrapTrack, our junkshop system, records each purchase at the scale as a numbered ticket with the supplier, material, weight and price per kilo, keeps stock in kilos and pesos per material, compares your delivery weight with the weight the trading company accepted and flags the difference, tracks what each trading company still owes, runs a daily cash drawer with a closing count, and reports profit per material. Each worker has their own login and role, and it runs in the browser on a budget Android phone. It does not file reports with the police or city hall, has no seller ID field yet, and does not decide whether digital records satisfy your city ordinance. A demo is available.

Sources

• Romallosa, Penetrante and Ravena, Junkshops as Recycling Chain Actors in the Recovery of Waste Resources from a Highly Urbanized City in the Philippines, Applied Environmental Research, Vol. 46 No. 3 (2024), article page and full-text PDF on ThaiJO (ph01.tci-thaijo.org). Checked October 7, 2026.
• Featured paper of the week on the same study, Central Philippine University (cpu.edu.ph). Checked October 7, 2026.
• Ganacias, Baseline Study on Waste Recovery Efficiency and Mechanism of Junkshops in the Municipality of Pavia, undergraduate special paper, abstract, Central Philippine University repository (repository.cpu.edu.ph), May 2024. Checked October 7, 2026.
• Starting a Business: Junkshop and Scrap Business, Department of Trade and Industry, Bureau of Micro, Small and Medium Enterprise Development, printed September 2010 (dti.gov.ph). Checked October 7, 2026.
• Price Drop, photo and caption, Davao Today, February 11, 2015 (davaotoday.com). Checked October 7, 2026.
• Presidential Decree No. 1612, the Anti-Fencing Law, Sections 2, 3 and 5, on Lawphil (lawphil.net). Checked October 7, 2026.
• 27 arrested in Davao City for cable wire theft, GMA Regional TV, April 24, 2024 (gmanetwork.com). Checked October 7, 2026.
• Republic Act No. 7394, the Consumer Act of the Philippines, Articles 62 and 64, on Lawphil (lawphil.net). Checked October 7, 2026.
• Fire guts junk shop in Dagupan City, GMA Regional TV, January 1, 2024 (gmanetwork.com). Checked October 7, 2026.
• Fire hits several junk shops in Quezon City, GMA News, July 19, 2024 (gmanetwork.com). Checked October 7, 2026.
• GMA News report on used lead-acid batteries and the Federation of Philippine Industries, September 12, 2024 (gmanetwork.com). Checked October 7, 2026.
• Mag-asawa, pinatunayang may pera sa basura matapos umasenso sa kanilang junk shop, GMA News, July 15, 2022 (gmanetwork.com). Checked October 7, 2026.