When you broker scrap on ScrapTrade, the arrangement with the original seller is private. ScrapTrade does not manage it, calculate your margin or pay the seller for you. That makes your own agreement the most important document in the deal, and the easiest place to go wrong. This guide sets out what to settle, why the timing of payment matters most, and an outline you can adapt. It is general guidance, not legal advice, and any significant agreement should be reviewed by a qualified adviser. We have a commercial interest in the scrap trade.
Why write it down
Most broker disputes come from things nobody agreed: when the seller is paid, who bears a cancelled sale, what happens if the buyer says the material is not what was described. A short written agreement avoids most of them. It does not need to be long. It needs to be clear and signed or confirmed by both sides.
The ten topics
ScrapTrade's agreement checklist lists the core topics. Here they are with what to write.
- Parties. Names, businesses and contact details of both sides.
- Material. Type, grade, quantity, condition and location. Be specific. Say what you have seen and what you have been told.
- Authority. That the seller owns or controls the material and authorises you to sell it. Without this you should not list.
- Price or margin. The price you will pay, or the commission you will keep, and what it is based on.
- Payment to the seller. When and how the seller is paid, and what happens if the buyer cancels or the sale falls through.
- Collection and access. Who arranges collection, when, and who may inspect.
- Rejected or disputed material. What happens if the buyer disputes the material.
- Records. Weighbridge tickets, photos and documents each side keeps.
- Ending. How either side can end the arrangement.
- Costs. Who bears transport, handling and storage. This is not on ScrapTrade's list but it drives your margin, so settle it.
The one that matters most: when the seller is paid
There are two broad options.
Pay the seller before the sale. The seller has the money. You carry the risk. If the buyer cancels or disputes, you are left with material you have paid for.
Pay the seller after the buyer's payment is confirmed. You carry less risk. The seller waits. Some sellers will not accept this, and we cannot say whether yours will.
A middle path is to pay part up front and the rest on confirmation. Whatever you agree, state it exactly, including what happens when a sale falls through. ScrapTrade's own advice is to work out your costs and settle the price and timing before you list.
An invented example: you agree a US$900 purchase price. Option A: you pay US$900 now. If the buyer cancels and you resell for US$850, you are US$50 down before costs. Option B: you pay after the buyer's payment is confirmed. If the buyer cancels, you have paid nothing and the lot is simply unsold. The same event costs you very different amounts. This is arithmetic, not a price guide.
A sample outline
Adapt this, and have a qualified adviser review anything significant.
- Parties and date.
- The seller authorises the broker to sell the material described in Schedule 1.
- Schedule 1: material, grade, quantity, condition, location.
- The price or margin, and what it is based on.
- Payment: amount, timing and method, and what happens if the buyer cancels or the sale fails.
- Collection: who arranges it, when, and inspection access.
- Disputes: how a disputed load is handled and who bears a price reduction.
- Records each side keeps.
- Either side can end the arrangement by written notice, and what happens to listed material.
Before you list
- Confirm the original seller's identity. They may be registered on ScrapTrade or external, subject to verification.
- Make sure the details in your listing match the agreement. See broker listing requirements.
- Work out your costs and your price before you agree a margin. See broker margin explained.
Where to go next
- ScrapTrade home
- Marketplace
- Live scrap prices and calculator
- How scrap brokering works
- Broker responsibilities
- Create a free account
See How to Become a Scrap Broker: Step by Step for the whole deal and How to Make Money on ScrapTrade: 5 Routes for the other routes. scrap.trade describes itself as a global marketplace, and we cannot confirm availability in every country or that your country's law allows a given deal.
What we could not verify
- Whether a given seller will accept pay-after-confirmation.
- Legal requirements for broker agreements in your country.
- Platform fee percentages and payment timing.
Frequently asked questions
Does ScrapTrade manage the agreement with the original seller?
No. It is private, and ScrapTrade does not manage, calculate or distribute it.
What is the biggest source of disagreement?
Timing: when the original seller is paid, and what happens if the buyer cancels.
Do I need written authority to sell?
ScrapTrade's checklist lists authority as a topic to settle: that the seller owns or controls the material and authorises you to sell it.
Should a lawyer review the agreement?
For anything significant, yes. This is general guidance, not legal advice.
Sources
- ScrapTrade, Scrap broker agreement with the original seller, How scrap brokering works and Scrap broker responsibilities, as read in October 2026.
The example is invented. This is general information, not legal, tax or financial advice. ScrapTrade operates a scrap marketplace and has a commercial interest in the scrap trade.