Do you want to start a pallet manufacturing business? If so, here is a detailed business plan guide on how to start pallet making or recycling business with little money.
A pallet is a flat structure generally made of wood. It is used in the transport and packaging industry as a stable support for goods. It helps in protecting valuable items when lifted by industrial tools like a forklift, pallet jack, a front loader, or cranes. The use of pallets is getting increasingly popular for handling and storage usefulness.
Is Pallet Business Profitable?
The use of pallets has started long years back for packing and moving services all across the globe. It will remain in the future also because transporting certain items can’t be done without lifting by jacking devices. Without pallets shipping of products is just not possible.
The market of pallets is poised to grow as global safety standards getting higher in the transportation industry. As per industry experts, the pallet market is estimated to grow US$ 88.69 billion by the year 2026 in the United States alone. Roughly around 2 billion pallets are in circulation at present worldwide.
Pallet Manufacturing Business Plan
Here are the 1o steps to start a pallet making business. You can also check other business models like pallet recycling, repairing, and resellers.
1. Research the Market
Before starting any business, the very first thing you must do is to gather information about the demand, trend, and the level of competition in the local market. It holds true to the pallet manufacturing business too. Based on the market research, plan your business and explore the gaps that exist.
You can also search online and collect information. Check websites like PalletProfile.com, or RecycleRecord.com for industry reports.
2. Learn the Manufacturing Process
Pallet making is extremely easy. Still, it is advised to learn the most latest manufacturing process. Contact local manufacturers and learn as much as possible the method of manufacturing pallets. Though plastics and metal are sometimes used to make pallets, mostly it is wood that is most widely used to manufacture pallets.
3. Create a Business Plan
If you are serious about starting and running a profitable pallet making business, it is most essential to creating a business plan. Some of the basic topics that your pallet business plan must cover are the following:
- What are the startup and recurring costs?
- Who are your target customers?
- Pricing Strategy
- How You are going to sell your pallets?
4. Name Your Pallet Company
Take some time off and brainstorm to find a suitable name for your pallet making business. Do remember, a relatable and catchy business name goes a long way to not only help to build your brand but also helps in getting more customers. It helps customers to find you when there is a need to buy pallets.
Read: How to Name Your Business?
5. Register Company & Procure Licenses and Permits
Registering your company is most essential if you want to run a legally compliant pallet manufacturing company. Every country and state offers different sent of business formation structures. Talk to the local competent authority and choose the most-suited business structure as per your scale of operation.
For example, if you are from the United States, forming an LLC is much popular among small business owners. It not only provides certain additional benefits but also protects your personal assets from your business assets.
In addition, procure required licenses and permits to run a factory at the chosen location of the factory.
6. Set Your Factory Location
To manufacture pallets, you need to set a factory. Choose the location as per your budget and availability. It is better to select a factory location that is close to the immediate market as it reduces the transportation cost and hence increases the profit margin.
7. Set Pricing Strategy
The pallet industry is competitive. There are many players catering successfully in the market. To be successful in this business you must have to offer a cheaper price band for your pallets.
In the United States, the price margin for most pallet business owners ranges from around 5% to 10%. Check with the local market, and fix appropriate pricing for customers.
8. Hire Manpower
Pallet making is a labor-intensive business. Make a hiring plan and recruit skilled manpower as per requirement.
9. Buy Raw Materials & Equipment
The major raw material for wood pallets is raw wood. If you are starting small, other than wood, you will need nails and lumber, nail guns, forklifts, and worktables.
However, you can go for completely automated machines for large scale production. In that case, your investment will be in the range of $500,000 to $1,00,0000.
10. Promote Your Business
Selecting the right audience and reaching them is the most critical part of making your pallet business profitable. Create an effective promotional plan and execute it as best as possible. Networking is the key to success in this business.
In addition, promote your business through social media platforms and create a website for your company. It will help in reaching a wider audience and add confidence to the customer’s mind.
Other Ways of Starting a Pallet Business
Pallet manufacturing business does require some startup investment. If you are short of capital but still passionate about entering into the pallet business, there are some other business models you can explore. Below find dome of the popular ways of making money from the pallet business.
Start Pallet Recycling Business
Pallet recycling business can be started with practically no cost. There are thousands of existing pallets that are not workable. You just need to recollect them and make them reusable. You don’t need much equipment to buy and the profit is also good.
Become a Pallet Reseller
There are plenty of pallet manufacturers looking for middlemen to sell their products. You can work as a selling agent and make good money by working as a bridge between sellers and buyers.
Start Pallet Repairing Business
Pallet repairing is another low-cost pallet-related business for beginners. Pallet owners often look for pallet repairer for fixing already bought pallets. You just need to have a small workshop to do the repairing job. Even, if you don’t have space, you can start by doing repairing jobs at the customer’s doorstep.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.