NAICS 423930 Quarterly Industry Report
Recyclable Material Merchant Wholesalers
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 423930Sector: Wholesale Trade (42)Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 423930 synthesizes data from the U.S. Census Bureau[5], Bureau of Labor Statistics[7], and Small Business Administration[6] to profile the recyclable material wholesale sector. Our research team analyzes commodity trade flows and scrap market data to provide accurate intelligence for business valuation. The report examines SBA size standards, related NAICS classifications, and environmental regulatory factors unique to recyclable materials distribution. Fair Market Value updates this NAICS 423930 profile quarterly to incorporate new Census data and commodity market developments.
Industry Snapshot
Key metrics for the recyclable material merchant wholesalers industry.
Industry Definition & Overview
Recyclable Material Merchant Wholesalers (NAICS 423930) encompasses establishments primarily engaged in the merchant wholesale distribution of automotive scrap, industrial scrap, and other recyclable materials. Product categories include ferrous and nonferrous scrap metals, waste paper and cardboard, scrap plastics, used glass, textile waste, rubber scrap, and electronic waste components. This classification also covers auto wreckers primarily engaged in dismantling motor vehicles for the purpose of wholesaling scrap rather than reselling used parts.
The industry operates through a multi-tier collection and processing network. Peddlers and small collectors gather materials from generators (factories, demolition sites, municipalities) and sell to scrap yards and processors. These processors sort, clean, bale, shred, or otherwise prepare materials before selling to domestic mills, smelters, and manufacturers or exporting to overseas buyers. Commodity pricing drives this business; scrap metal prices track closely with virgin material markets and global demand patterns. According to the U.S. Census Bureau[5], establishments must take ownership title to qualify as merchant wholesalers, distinguishing them from materials recovery facilities that simply sort commingled recyclables.
The SBA[6] sets the size standard at 125 employees for this industry. Environmental regulations heavily shape operations, with EPA, state environmental agencies, and local authorities governing storage, handling, and transportation of recyclable materials. Scrap yards require environmental permits and must manage potential soil and groundwater contamination risks. Price volatility creates boom-and-bust cycles; when commodity prices drop sharply, wholesalers holding large inventories face immediate margin compression. Export markets, particularly in Asia, historically absorbed substantial volumes of American recyclable materials before import restrictions tightened quality standards significantly.
What's Included in This Industry
- Wholesale distribution of ferrous scrap metal and iron
- Distribution of nonferrous scrap metals (copper, aluminum, brass)
- Wholesale of waste paper, cardboard, and fiber materials
- Distribution of scrap plastics and polymer waste
- Wholesale of automotive scrap from vehicle dismantling
- Distribution of electronic scrap and e-waste components
- Wholesale of used glass and cullet materials
- Distribution of textile waste and fiber scrap
- Wholesale of rubber scrap and tire-derived materials
- Distribution of industrial scrap from manufacturing operations
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Wholesale Trade | 42 |
| Subsector | Merchant Wholesalers, Durable Goods | 423 |
| Industry Group | Miscellaneous Durable Goods Merchant Wholesalers | 4239 |
| NAICS Industry | Recyclable Material Merchant Wholesalers | 42393 |
| National Industry | Recyclable Material Merchant Wholesalers | 423930 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 423510 | Metal Service Centers and Other Metal Merchant Wholesalers | Distributes metals and minerals through wholesale channels, with scrap metal wholesalers competing in overlapping markets for secondary metal supply to mills |
| 423140 | Motor Vehicle Parts (Used) Merchant Wholesalers | Covers used motor vehicle parts wholesalers, distinguished from this code by selling reusable parts rather than dismantling vehicles for scrap metal value |
| 423520 | Coal and Other Mineral and Ore Merchant Wholesalers | Handles coal and mineral ore wholesale distribution, sharing commodity trading practices and industrial customer relationships with recyclable material wholesalers |
| 423110 | Automobile and Other Motor Vehicle Merchant Wholesalers | Distributes motor vehicles through wholesale channels; end-of-life vehicles from this industry feed into the automotive scrap supply chain for recyclable material dealers |
| 423990 | Other Miscellaneous Durable Goods Merchant Wholesalers | Covers other miscellaneous durable goods wholesalers, sometimes handling secondary materials and surplus goods that overlap with recyclable material categories |
| 423830 | Industrial Machinery and Equipment Merchant Wholesalers | Distributes industrial machinery including scrap processing equipment like shredders and balers used by recyclable material wholesalers in their operations |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 11.9% | 923 |
| 2 | Texas | 9.6% | 746 |
| 3 | New York | 5.4% | 417 |
| 4 | Florida | 5.1% | 397 |
| 5 | Pennsylvania | 4.9% | 379 |
| 6 | Illinois | 4.8% | 372 |
| 7 | Ohio | 4.5% | 350 |
| 8 | Georgia | 3.4% | 266 |
| 9 | New Jersey | 3.2% | 247 |
| 10 | North Carolina | 3.1% | 243 |
% Of Establishments
0%
12%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
560
Total SBA Loans
$350.8M
Total Loan Volume
$626K
Average Loan Size
11 yrs
Average Loan Term
9.76%
Average Interest Rate
5,584
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The SBA[6] classifies NAICS 423930 under merchant wholesale trade with a size standard of 125 employees. Businesses at or below this threshold qualify as small for federal contracting preferences and SBA loan programs. Recyclable material wholesalers can access SBA 7(a) loans[8] for equipment purchases like balers, shredders, and material handlers. Firms expanding yard capacity or purchasing processing facilities may qualify for 504 loans[9]. Environmental compliance costs including permits, monitoring wells, and contamination remediation create additional capital needs that SBA-backed financing can address.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 32 | $50.0M | $1.6M |
| 2 | The Huntington National Bank | 72 | $43.9M | $609K |
| 3 | VelocitySBA, LLC | 24 | $41.3M | $1.7M |
| 4 | Security National Bank of Omaha | 16 | $23.4M | $1.5M |
| 5 | Climate First Bank | 8 | $20.3M | $2.5M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses fall under NAICS 423930?
NAICS 423930 includes merchant wholesalers dealing in scrap metals (ferrous and nonferrous), waste paper, scrap plastics, used glass, textile waste, rubber scrap, electronic waste, and automotive scrap. Auto wreckers dismantling vehicles for scrap value also fall under this code. Source: U.S. Census Bureau[5]
How is NAICS 423930 different from materials recovery facilities?
NAICS 423930 covers merchant wholesalers who take title to recyclable materials and resell them. Materials recovery facilities (NAICS 562920) sort commingled recyclables into distinct streams. The distinction centers on ownership: wholesalers buy, process, and resell materials for profit, while MRFs primarily sort materials collected from waste streams.
What is the SBA size standard for NAICS 423930?
The SBA sets the size standard at 125 employees for recyclable material merchant wholesalers. Businesses at or below this employee count qualify as small for federal contracting preferences and SBA financing programs. Source: SBA Size Standards[6]
What NAICS codes are related to recyclable material wholesaling?
Key related codes include 423510 (metals wholesalers), 423140 (used motor vehicle parts wholesalers), 562920 (materials recovery facilities), and 331110 (iron and steel mills that purchase scrap). Source: Census NAICS[5]
What industries work closely with recyclable material wholesalers?
Primary customers include steel mills, aluminum smelters, paper mills, plastics recyclers, and foundries. Upstream suppliers include waste collection companies, demolition contractors, manufacturing plants generating industrial scrap, and auto salvage yards. Export brokers connect domestic scrap wholesalers with overseas buyers.
What activities are included in NAICS 423930?
Activities include wholesale buying and selling of scrap metals, waste paper, scrap plastics, glass cullet, textile waste, rubber scrap, and electronic waste. Vehicle dismantling for scrap purposes, material sorting, baling, shredding, and export preparation are also covered. Source: Census Bureau[5]
Can recyclable material wholesalers get SBA loans?
Yes, small businesses under NAICS 423930 can access SBA 7(a) loans for equipment and working capital, 504 loans for yard expansions and facility purchases, and microloans for smaller capital needs. Environmental compliance investments often drive financing requirements. Source: SBA Loan Programs[10]
Where are recyclable material wholesalers concentrated?
Scrap yards and recyclable material wholesalers concentrate near manufacturing centers and port cities. Major clusters exist in the Great Lakes industrial corridor, the Northeast, Texas, and California. Export-focused operations locate near container shipping ports along the Gulf, Pacific, and Atlantic coasts. Source: BLS QCEW[11]
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]SBA sba.gov
- [7]Bureau of Labor Statistics bls.gov
- [8]SBA 7(a) loans sba.gov
- [9]504 loans sba.gov
- [10]SBA Loan Programs sba.gov
- [11]BLS QCEW bls.gov
Disclaimer
This publication has been prepared by Fair Market Value (“Fair Market Value”) for informational purposes only. It is provided on an “as-is” and “as available” basis. Fair Market Value makes no representations or warranties, express or implied, regarding the merchantability, fitness for a particular purpose, completeness, or accuracy of the data or information contained herein. This publication is not intended to be, and should not be construed as, professional financial, legal, tax, or investment advice. Users should consult with qualified professionals before making any financial or business decisions based on the information presented.
To the extent permitted by law, Fair Market Value disclaims all liability for loss or damage, direct and indirect, suffered or incurred by any person resulting from the use of, or reliance upon, the data in this publication.
Copyright © 2026 Fair Market Value. All rights reserved. All data, information, articles, graphs, and content contained in this publication are copyrighted works and Fair Market Value hereby reserves all rights. No part of this publication may be copied, reproduced, republished, uploaded to a third party, or distributed without the prior written permission of Fair Market Value.