Our perception of the iron trading profession

Some people believe that the profit from selling iron goods is high and easily attainable, and this has led many individuals to be interested in working in this sector. On the other hand, there is a mindset among these individuals that iron trading is an effortless and simple job that does not require skills or expertise and only needs capital to operate in this profession. It means that having a substantial investment dedicated to purchasing iron is sufficient, and then the bought iron can be easily sold in the market at a high profit.

Profit from selling iron

How close to reality are these perceptions? Is it really the iron trader who determines the price of iron in the market? Can an iron trader impose their products on the people at any profit they wish?

Another mindset among some individuals in society is that iron trading is not a productive economic job and confuses it with rent-seeking and speculation. These individuals believe that iron traders not only do not have any economic profit or benefit for the country's situation but are also detrimental and useless for society. In the continuation of this text, to reach a better conclusion and logical answers to all the questions in our minds, we will examine the advantages and disadvantages of the iron trading profession.

How much do iron traders profit?

It must be said that iron trading can yield a great profit like other jobs, of course, if you act wisely! That is to say, it is even possible for your initial investment to be returned along with profit in a very short time; however, these factors of profit and loss in iron trading will be reviewed later.

Advantages of the iron trading profession

High profits from buying and selling steel products in bulk

Constant demand for these materials

Stability of iron and steel value

High variety of suppliers for materials

Disadvantages of the iron trading profession

Need for relatively large billions in capital

Need for a large space or warehouse to store products in proper conditions

Long working hours, day and night

High risk in conducting transactions and bulk buying and selling

Large circulating capital

Reasons for iron traders' bankruptcy

Providing capital for this profession is just the beginning, and to start operating in this sector, you need to enhance your technical knowledge and understand some economics; that is, to be able to predict the market to some extent, which requires market analysis. Therefore, if you do not have these prerequisites, you should bring someone along who has the knowledge of this job. It should be noted that many iron traders fail to make timely transactions due to a wrong market analysis, leading to their bankruptcy. After renting and equipping a suitable place for warehousing and storing purchased products and obtaining a license, you must consider securing your workforce; from accountants for financial matters to sales experts for selling the products, etc.

It is worth mentioning that to secure raw materials, you can buy products from factories, commodity exchanges, or iron trading companies, and alongside that, you must think about establishing connections with potential customers, that is, construction projects, contractors, and builders. Thus, one can conclude that this job is not as easy and hassle-free as some people imagine; on one hand, securing products for sale; on the other hand, analyzing the market to find the best times for buying and selling without losing capital, etc.

Challenges of selling iron

It is not that anyone who becomes an iron trader will no longer have economic concerns and will always be well off; perhaps for every iron trader who has thrived in the iron market and found a suitable position, 2 or 3 new traders have gone bankrupt and lost all their investments. It should be noted that most people who have invested in this market have dedicated billions of tomans of their capital to this business while they could have directed their investments towards other areas, such as gold and dollar markets, cars, housing, etc.

Profit margin from selling iron

The profit percentage among iron traders is not equal, but generally, it can be said that the profit from iron trading depends on factors such as market conditions including global currency rates, iron ore prices, supply and demand for products, etc. It should be noted that competition in the iron and steel market is heavier and tougher than one might think, and only those iron traders who possess competitive advantages over their rivals can maintain their market share. Ultimately, only individuals who are very persistent and continually update their information about the domestic and global market will survive in this market.

Opportunity cost of iron trading

In fact, those who think that iron traders earn huge profits do not consider and overlook the massive capital that has been invested in this profession. An iron trader, who could have deposited 5 billion tomans in a bank and effortlessly added 1 billion to their initial capital at the end of the year, prefers to spend their capital in this profession and accept all the challenges that come with it; with this in mind, if an iron trader can achieve 60 to 70 percent annual gross profit, it still cannot be stated that they have high profit margins, because considering the ongoing costs and repaying bank loans, the profit ultimately obtained is less than the interest earned from bank deposits. Therefore, it cannot be said that the profit margin from iron trading is significant and considerable.

Review of iron sales profitability

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