I don't see how that differs materially from a junk yard.. Cars with popular parts stay on the sorting floor at an urban yard, others go quickly or slowly toward the appropriate lower value reclaim tiers.

In my city there is an absolutely massive pick-your-own-parts yard. I believe they get most of their vehicles from the state-owned insurance company after the insurance company is done harvesting parts from write offs (which they do sell as a side-revenue stream). The pick-a-part facility is cleverly located next door to a steel mill. When a vehicle is done at the part facility it gets stripped and recycled. They don’t need to get shipped, they just pick them up with a forklift and move them over to the lot next door.