Pallet cost

[WV Sawmiller]

4X4,

   Thanks for the update. I thought the price/cost sounded a little high based on what I have seen and heard that others sold them for. Seems to me pallet stock is usually a salvage operation for low grade lumber that can't be used or sold for other projects. Nothing wrong with that just a fact of life. Sort of like making tomato stakes. Pretty labor intensive, a definite need and market but not generally a high profit margin.

   You might make and save a few for sale when you have excess stock and time if you have the space and tell the guy you have a few for $__ if he ever needs them.

[Magicman]

Most of the pallet operations here use "imported" low cost labor which allows them to sell pallets at a low cost and also virtually eliminates competition.

[WV Sawmiller]

MM,

   I like the "imported" terminology. Gets an A+ for political correctness.

   When I was a kid building pallets was a local job for teenagers after school. I had friends who tried it. I think the guy provided all the lumber, gave them a heavy ball peen hammer, plenty of nails and showed them how to assemble them and paid $1 per finished pallet. I doubt they pay much more now if not less especially with the availability of electric and air nail guns.

   We had a family business selling and installing monuments and chain link fences and Dad figured we were worth more than we could make building pallets (not that I ever remember getting paid - I told him the only reason I left home was because he would not buy an automatic cement mixer. He said he didn't need one with 3 sons there.)

[4x4American]

Yeap...the mater stakes weren't bad.  Got $1.50 each plus delivery charge for them.   ;D

[double cut1]

i build 35 pallets an hour 2 person nail guns are provided by the nail supplier. a gma 48*40 4 way pallet in ga is 8.25 to 12$ 15 feet of lumber about 5 $ profit each
 

[reswire]

I know a guy in Southern Maryland that builds engine pallets for local salvage yards and dealers.   He builds them to handle engines of all sizes, and usually has to "build to fit".  He buys oak boards from an amish sawyer, and sells pallets/crates for $250 to $350 each.  Sounded like a good deal to me, but I wouldn't have a clue of how your local markets are.  You could check with auto dealers, engine dealers, maybe some scrap yards that are shipping engines via freight.  Just a thought.

[Bradm]

i build 35 pallets an hour 2 person nail guns are provided by the nail supplier. a gma 48*40 4 way pallet in ga is 8.25 to 12$ 15 feet of lumber about 5 $ profit each

$8.25-12 per is quite a large range (almost 50%).  If hardwood pallet stock runs at $0.50/bft (random number as I don't know what it actually should be) green you're left with $0.75-$5.00 gross profit before labor and other costs.  I don't know very many companies that can operate very long at the low end of the scale especially if the customer takes longer than prepay to pay.

[curved-wood]

I did supply the wood for a crate for transporting a big electric motor for a paper mill. The crate was a an engineer design so nobody could say a word. The order was 8 pieces of  8''x8'' by 8 foot  red oak and had to be clear!!! I think somebody was planning to use the crate when it return back to the mill. No complain on my side $$.  May there is a niche market in crate for large electric motor...never know

[reswire]

In the early days, Ford motor company required all their parts suppliers to deliver parts in pre designed crates.  The crates were later turned into seats, stripped and repurposed as wheel spokes etc..  If it worked to build Ford Motor company,,, ??????

[hedgerow]

I have taken several shipping crates that big pieces of factory equipment was shipped in from work that was going to be sent to the land fill and made every thing for inside firewood racks to work benches to storage cabinets. These were well built and expensive shipping crates. 

[killamplanes]

I'll pipe in on this one. I build specialty 40x40 skids "no bottom boards"  2.5in ends. Anyway same deal 2yrs ago company approached me to build. I shot very fair price for both parties. Currently produce semi load "550" a week. My mill sits now and I manage employee and another mill makes the lumber. I did do my own cutstock for awhile and may do it again. Been great to me. Ie get air nailer 300 bucks. I got 3 spares and one last upwards of 6 months. I have a pallet jig, forklift, semi for transportation and heated and airconditioned building for it all. It didn't happen over night but with hard work and good decisions it's possible.  On your wood cost I think you will find it to be cheaper than your estimates. And with an air nailer and 1k pallet jig I can produce 25 an hour "not all day" and my 72yrs old employee 100 an 8 hour day.

[edwin dirnbeck]

If you are a young man and nail pallets together by hand,plan on being on ss disability at age 45. I see it all the time,young indetructable guys ,bent over and ruined at 45. If you are making $500 worth of pallets a day ,you surely should be able to afford a good nail gun.You are competing with guys using nail guns.Yes ,I can understand ,not having money and nailing the first few pallets by hand,but please get a nail gun. Good luck

[hedgerow]

I'll pipe in on this one. I build specialty 40x40 skids "no bottom boards"  2.5in ends. Anyway same deal 2yrs ago company approached me to build. I shot very fair price for both parties. Currently produce semi load "550" a week. My mill sits now and I manage employee and another mill makes the lumber. I did do my own cutstock for awhile and may do it again. Been great to me. Ie get air nailer 300 bucks. I got 3 spares and one last upwards of 6 months. I have a pallet jig, forklift, semi for transportation and heated and airconditioned building for it all. It didn't happen over night but with hard work and good decisions it's possible.  On your wood cost I think you will find it to be cheaper than your estimates. And with an air nailer and 1k pallet jig I can produce 25 an hour "not all day" and my 72yrs old employee 100 an 8 hour day.

A guy I used to hay with years ago his son and him used to run a saw mill and farm and then a factory needed special pallets made for shipping they started doing them stopped farming and saw milling and 40 years later the dad is dead and the son and his son are still building pallets for the same factory  and have since sold the saw mill and the farm. Some times a better deal finds you and you go with it. 

[double cut1]

i build 35 pallets an hour 2 person nail guns are provided by the nail supplier. a gma 48*40 4 way pallet in ga is 8.25 to 12$ 15 feet of lumber about 5 $ profit each

$8.25-12 per is quite a large range (almost 50%).  If hardwood pallet stock runs at $0.50/bft (random number as I don't know what it actually should be) green you're left with $0.75-$5.00 gross profit before labor and other costs.  I don't know very many companies that can operate very long at the low end of the scale especially if the customer takes longer than prepay to pay.

8.25 each is wholesale to another pallet company average gma in ga is 9.75$ small quantity 12$ I get lumber from a mate company at 18 cent a bft I get logs at 40 tone  I have 2.5$ in nails and lumber 5$ is before part time labor and gas blades ???   I bought a lt 35 to feed my woodmizer resaw I can make pallet parts and make more money about 60$an hour 2 person. not getting wealthy but this pays the bills . looking for a better product have not found one.

[moodnacreek]

4X4, My guess is you would be lucky to get  $1.00 bd. ft. all built. Absolutely need an air nailler preferably air powered.

[nativewolf]

I had chimed in but not read the whole thread.  So I deleted my comments, they are not helpful.  Interesting case.

[4x4American]

Lol this is a real old thread, I've since learned alot and went a different route.  

[taylorsmissbeehaven]

Hey 4x4 I would love to hear what you have learned and what direction has worked/not worked for you. As I lean harder and harder on the mill I am very interested in weeding out the losses and chasing the winners!! Care to share? Brian

[4x4American]

Hey 4x4 I would love to hear what you have learned and what direction has worked/not worked for you. As I lean harder and harder on the mill I am very interested in weeding out the losses and chasing the winners!! Care to share? Brian

Buy low sell high!! lol
I just never got into making the pallets.  Seemed like too much time to go from log to $.  You can make decent money selling cutstock, especially nowadays.  Scale the kerf into the boards when you resaw cants.  Look for specialty items to sell.  Like rn I'm cutting some specialty stuff for the pulp mill to ship their paper rolls with.  On the 12" stuff it equates to $2.40/bf and the 39" ones is like $5.20/bf.  It takes time and you have to have the right equipment to do it.  I'm cutting as much of that stuff as I can right now.  And it can be any kinda wood, hard or soft.  If I wanted to I could use walnut and be profitable lol

[Peter Drouin]

That sounds good. $5.20 a bf for green dead stacked wood. How can you go wrong?

[taylorsmissbeehaven]

Thanks for the reply. That does sound good. I try to always have my eyes open for opportunities. Brian 

[sealark37]

To cap off this thread.  The pallet business is a low margin, labor intensive operation.  No matter how good your quality, no matter how low your price, no matter how quick your responsiveness, the buyer is under pressure to lower the unit cost of the pallets he buys.  All you can expect is to be under-cut in the near future.  Unless, of course, the buyer is your BIL.     Regards, Clark