What are Pallets?
Pallets are wooden platforms used to store and transport goods and materials efficiently. They provide a base for stacking products and can be easily moved using forklifts, pallet jacks, and other equipment. Most pallets measure 48 inches by 40 inches and are made from wood, plastic, paper, or metal. The most common type is the “stringer pallet,” which has three runners with slatted wood boards across the top.
Pallets are a crucial part of the supply chain and logistics industries. They allow for standardized handling, stacking, and storage of goods. This promotes efficiency and reduces product damage. The vast majority of consumer and industrial products shipped today are loaded onto pallets.
Where Do Pallets Come From?
Pallets are produced by pallet manufacturing companies using wood from sustainable forests. The largest pallet producers are CHEP and PECO. There are also many small, regional pallet manufacturers. Pallets are leased or sold directly to companies for their supply chain needs.
Many pallets are also recovered, refurbished, and reused. Grocery stores, warehouses, factories, and other locations with high pallet traffic generate a constant supply of used pallets. When no longer usable, the pallet wood is recycled to avoid waste.
Why Are Pallets a Valuable Commodity?
Although pallets may seem lowly, they are an essential tool for the functioning of modern commerce. As a result, quality pallets are in constant demand. Companies need a steady supply of pallets for daily operations. There is a thriving market around collecting, repairing, and reselling used pallets.
Wood pallets typically cost between $10-25 brand new. Used pallets in good condition generally sell for $5-15. While this may seem inexpensive, the volume makes pallets a valuable commodity. For example, a distributor may use thousands of pallets per week. This generates significant cost over time. Buying used pallets provides major savings.
Many small businesses and entrepreneurs enter the pallet resale business. With some labor and storage space, you can collect, repair, and sell used pallets for a decent profit. This is possible because pallets are reusable. A pallet may go through dozens of uses in its lifetime if maintained properly. There is always demand for pallets in inventory circulation.
Requirements to Sell Pallets
Selling pallets can generate income but requires some upfront investment. Here are the basic requirements:
– Space: An area to collect and store pallets. This could be vacant land, shed, warehouse, or yard. The more space you have, the more inventory you can hold.
– Transportation: A box truck, van, or trailer to haul pallets. Flatbeds work well. You need to be able to safely move stacks of pallets.
– Labor: Manual work is required to move, inspect, repair, dismantle, and stack pallets. You may need 1-3 workers depending on volume.
– Tools: Basic pallet repair tools include hammers, pry bars, nail pullers, saws, and wood glue. Safety gear like gloves and goggles is also recommended.
– Inventory system: Track your incoming and outgoing pallets. Know accurate counts for purchasing and sales.
– Business license: Check your state and local regulations about reselling used pallets. Most areas require a business license.
With these basics covered, you can start sourcing and selling pallets in volume. Be sure to understand regional pallet prices and demand before investing too heavily.
Sourcing Used Pallets
Used pallets become available at many local businesses. Be polite and professional when asking to collect or buy their unwanted pallets. Good places to approach include:
– Warehouses
– Distribution centers
– Manufacturing facilities
– Retail stores/malls
– Grocery stores
– Construction companies
– Agricultural operations
The key is building relationships with staff at these companies. Make it clear you will take pallets off their hands on a regular basis. Visit locations in person and follow up to pitch your services. Consistency, reliability, and fair pricing will make sources eager to work with you.
You may also find pallets for sale on Craigslist and Facebook Marketplace. Watch for industrial auctions selling surplus pallets. Be ready to haul away large quantities if needed.
Evaluating and Repairing Pallets
Once pallets are sourced, inspect each one to gauge its reuse potential:
– Is the frame intact with no missing stringers or broken bottom boards?
– Are top deck boards in good shape or do they need replacing?
– Are any nails sticking out that need hammering down?
– Does the pallet need cleaning before storage and sale?
– Can damaged components like broken boards be easily replaced?
Sort pallets into categories: ready for resale, needs minor repairs, needs major work, or scrap.
Use pallet repair tools to fix issues like:
– Swapping out broken deck boards
– Reinforcing stringers with additional nailing
– Replacing missing or warped boards
– Hammering down protruding nails
Repairs should be simple and cost-effective. Overly damaged pallets belong in the scrap pile for recycling.
Dismantling Pallets
Some low-grade pallets are not worth fixing. It is faster to dismantle them with a pry bar and recover the used lumber. Pull out any usable nails and sort boards by size.
Dismantled pallet wood can be sold to craft makers, builders, and carpenters. You can also dismantle pallets to make new pallets from the reclaimed wood.
Safely Storing Pallets
Keep your pallet inventory organized and secured:
– Stack pallets on firm, dry ground. Use blocks to create space between rows.
– Designate areas for different types like ready-to-sell and needs repair.
– Prevent pallets from falling over. Strap them to walls for support if needed.
– Do not exceed stack heights over 12-15 feet high.
– Keep perimeter areas and walkways clear.
– Eliminate fire hazards like brush and debris buildup.
– Use fences, gates, lighting, and cameras to prevent theft.
Proper storage extends pallet life and keeps your inventory accessible.
Finding Pallet Buyers
Many businesses want to buy used pallets in bulk for cheap. Reach out to:
– Warehouses and fulfillment centers
– Grocery and retail stores
– Construction and landscaping companies
– Manufacturers and industrial plants
– Farmers, orchards, and agricultural operations
Pitch them on supplying all their pallet needs at competitive rates. Reliable availability, quality, and service will win their business.
Also market to small businesses like craft makers, furniture builders, and home contractors who want smaller pallet quantities. Advertise locally through websites, flyers, business cards, and word of mouth.
Pricing Your Pallets
Set pallet sale prices based on your local market. Get a sense of current rates by researching competitors and calling buyers. Common pricing factors include:
– Pallet condition – Broken or damaged pallets are cheaper than newer and repaired.
– Pallet material – Hardwood brings higher prices than softwood. Plastic and metal pallets command premium pricing.
– Pallet size/type – Standard 48×40” pallets are most common. Oversize and custom pallets can fetch higher pricing in some cases.
– Purchase volume – Offer discounts on large quantity orders.
– Custom services – Charge extra for pallet repair, delivery, or custom orders.
Avoid pricing too high or you will lose business. But don’t undervalue your pallets either. Consider your costs for acquisition, labor, storage, and transportation. Set fair market rates to profit while keeping customers happy.
Issues and Challenges
Here are some common issues that pallet sellers encounter:
– Low-quality pallets – Avoid collecting too many broken or dirty pallets not worth fixing. They eat up time and space.
– Storage problems – Bad weather, inadequate drainage, and tipping can ruin pallets.
– Theft– Unsecured inventory and allowing cash purchases can lead to pallet theft.
– Transportation breakdowns – Have backup plans if your vehicles fail, so you don’t miss deliveries.
– Inconsistent supply – Try lining up multiple sourcing streams in case a big source dries up.
– Trouble finding labor – Competitive pay and consistent hours help attract and retain pallet workers.
– Changing markets – If demand drops, adjust purchasing and explore new buyer sources.
Is Reselling Pallets Profitable?
Pallet resale is a volume business. The small profit on each pallet adds up with high turnover. It’s possible to generate decent earnings if you:
– Source pallets at extremely low or no cost
– Minimize labor and operational expenses
– Achieve high inventory turnover
– Build a large customer base
– Command fair market prices
With some business savvy and hard work, you can achieve 20-30% profit margins. After expenses, it’s realistic to pocket ~$10-20 profit on each pallet sold. Profits can scale based on your volume. Some successful pallet companies make 6-7 figures in annual revenue.
Getting Started with Pallet Sales
Follow these steps to launch a simple pallet resale operation:
1. Research your local market. Call around to understand pricing, demand, and competition in your area.
2. Develop a business plan. Estimate your startup costs, operating expenses, target volumes, and expected profits.
3. Secure space to store inventory. Look for covered space with room for pallet stacks and access for trucks.
4. Acquire a box truck or van. You’ll need a reliable vehicle to transport pallets.
5. Buy pallet repair tools. Stock up on hammers, pry bars, nails, lumber, and safety gear.
6. Establish supplier relationships. Approach local businesses about collecting their used pallets.
7. Create inventory tracking system. Use a spreadsheet or app to manage incoming and outgoing pallets.
8. Begin pallet prep and repairs. Inspect, dismantle, and fix pallets to build saleable inventory.
9. Reach out to potential buyers. Contact businesses likely to purchase pallets in bulk.
10. List smaller inventories locally. Sell directly to DIY buyers via classified ads and social media.
Start small and reinvest profits to grow the business. With hard work and smarts, reselling pallets can become a nice extra income stream or even full-time business.
Conclusion
Pallets play a vital role in the supply chain and will continue to be in high demand. By sourcing used pallets for free or cheap, repairing them, and selling at fair market rates, you can turn a profit. With access to cheap inventory, space to store pallets, transportation, tools, and labor, the pallet resale business can be lucrative if you achieve sufficient volume. It’s realistic to pocket $10-20 profit from each pallet sold if you keep operational costs low. While hard work is required, you can generate thousands in side income or even six figures in revenue if you scale up. If run properly, buying and selling used pallets can provide stable returns.