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Slash Pallet Costs: Top 5 Strategies

Wooden Pallets
Eric DontiEric Donti
June 2, 2023

Pallets are the order of the day for any business that does a lot of shipping in quantity. Pallets are a known quantity for shipping services, which means there are fewer chances of accidental damage. They even come in standard sizes. Yet, pallets are a product in their own right, which makes finding ways to reduce pallet manufacturing costs a real financial concern for businesses if you feel as though your pallet costs have been running a little high recently, read on for five strategies that will help you slash pallet costs.

Material Choice

Wood Material

One of the biggest factors in the cost of pallets is the material they’re made from. When most people think of pallets, they think of wood. While many pallets are made of wood, you can also find pallets made of metal, plastic, and even corrugated paper. Each material type comes at a different price point for pallet customers.

As a general rule, though, you can expect higher costs for pallets made out of metal and plastic. Corrugated paper or cardboard pallets often have approximate price parity with wood pallets, but that doesn’t account for the hidden costs. These pallets typically do not fare well when exposed to direct moisture. While shippers will do their best to keep pallets dry, there is no guarantee.

That often means that the working life of paper pallets is shorter than the working life of other kinds of pallets. That drives the costs of using them up in the long term. Switching over to wood often reduces pallet manufacturing costs if you use plastic or metal pallets.

A visit to a pallet business website should tell you what materials they have available.

Refurbished Pallets

While wood pallets are durable, they are by no means indestructible. Edge boards take damage, as do the blocks that support them. Many businesses discard these pallets in the trash and buy new ones. Essentially, they elect to pay the full manufacturing costs for replacing every damaged pallet.

Another option is for your business to buy refurbished pallets from the start or replace damaged pallets with refurbished ones. Unlike new pallets, you can typically secure refurbished pallets for a steep discount. After all, fixing the broken pieces is typically more cost-effective than buying all the materials for a new pallet.

That lets pallet refurbishers fill a niche in the market for those who don’t mind a potentially ugly pallet as long as it’s fully functional.

Repair and Return Program

Repairing a wooden pallet

A variation of the refurbished pallet approach is a repair and return program. With these programs, instead of discarding your damaged pallets, you send them to a company that repairs pallets. The company then repairs the pallets and returns them to you for future use. You pay the repair and shipping costs, but this almost always means you secure a meaningful discount from buying entirely new pallets.

This approach also comes with a secondary benefit. It limits the amount of trash you have at your business site or warehouse. While it’s a minor concern, all things considered, it is a practical impediment to any employee trying to dispose of trash if there is a huge pile of broken pallets by the dumpster. Minimally, they must work around the broken pallets, which wastes time.

Bulk/Advance Purchases

When you order your pallets, how often do you calculate the number needed to meet your current needs and order that many? If you’re like many businesses, you do that most of the time. Of course, that particular number may be less than a full truckload of pallets. Pallet manufacturers, like most manufacturers, dislike space on trucks. After all, it doesn't make them money. So, you often end up paying an extra fee of one kind or another for that partial load. Instead, consider just ordering a full load. That bulk order eliminates the extra fee. It also means you won’t run short of pallets anytime soon.

You can find yourself in a situation where you will run out of pallets in a few days, so you need them right now. Pallet companies will expedite that shipping, but you’ll pay extra. Those fees add up over time. The best option is to keep track of your pallet usage and, where possible, do some advance ordering. That lets you avoid the fees and ensures no disruption in your business.

Pallet Suppliers

Wooden Supplier

Managing your pallets becomes infinitely more complicated for businesses with several locations, especially if you’re a regional or national business chain. Some businesses employ a process where they use the pallets that arrive on trucks for packing up and shipping out from that location. This can work up to a point, but it has drawbacks. For example, you can’t predict how many pallets will arrive damaged. You may know that you have 100 pallets coming in, but you can’t assume you’ll be able to ship 100 pallets out.

The other option is for your business to use a national or pooled pallet rental supplier. These pallet businesses maintain locations across the nation. Pallets come in from businesses and go back out to businesses. The pallet company takes responsibility for weeding out damaged pallets, so you always know how many pallets you have coming and when. You settle for more stable rental fees rather than deal with variable manufacturing costs.

Slashing Pallet Costs

There are several potential ways for your business to reduce pallet manufacturing costs. You can switch to a cheaper material or buy refurbished pallets. You can participate in a repair and return program. You can make bulk or advance purchases to keep fees down. You can also work with a national pallet rental supplier. Any of these choices can reduce the total costs of your pallet supply in the long or short term, depending on the option you pick. If you’re looking at ways to reduce costs, you should start by looking at pallet manufacturers.

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