The Secret Truth of Pallet Companies in America

One of the many reasons business is so interesting is the vast diversity of industries, products, services, and processes. There are no identical businesses. Every business is like a unique painting. It can be copied but it will never be the original. Amidst this wide array of contrasts, certain clusters of industries appear. I have learned over many years the secret truths of the pallet industry. I have learned its meter or rhythm so to speak. If you are a buyer, seller, or owner of pallets, this article will give you key insight into our industry. Knowledge is power. Broad knowledge is oversaturated and useless. What you need is specific and nuanced knowledge off of the beaten path. Welcome to your unbeaten path. Enjoy the journey.

1) The Pallet Industry can be a Blue Collar Industry.

Most pallet companies I know started almost accidentally. A certain entrepreneur saw junk pallets lying around and decided to fix them and sell them. Many of these entrepreneurs never would have labeled themselves entrepreneurs. They didn’t realize they were starting a business. Ripping off a few broken boards on a perfectly good pallet and then repairing it to make some side money wasn’t the kind of “Shark Tank” entrepreneur America is so accustomed to. That initial simplicity and can-do attitude define the industry today. Pallet companies see a way to make a few bucks and they jump in. They don’t overthink it. They are hard workers. They persevere. They get the job done. And they run the numbers later when the checks and bills come in. This is an oversimplification but it's born out of the reality of so many pallet company owners.

2) The Pallet Industry can be Reluctantly Automated

The blue-collar roots of pallet companies tend to lean against automation. There is not an overt attack on automation as much as there is not a strong sense of need. “Why do we need some fancy million-dollar machine just to dismantle a few pallets?” The mindset is not against the machine but rooted in the simplicity of the task at hand. "We don’t need to get automatic production machines. Our guys have nail guns and get the job done.” The automation sector of the pallet industry is quickly growing out of the avalanche of pressure and not out of a passionate pursuit.

3) The Pallet Industry can be Technologically Antiquated

You may see a thread of points developing. Technology is seen as a distraction from the task, not an enhancement. Even if it is seen as an enhancement, many founders were not educated in technology long enough to implement its full effects in their company. Further, hiring a consultant or IT company to come in sounds like a nightmare more than a victory parade. Pallet Companies usually do not run sophisticated MRP or ERP systems. Many pallet companies simply run with pen and paper, and the help of an accountant once a year to stay above board. This is not due to evil intent as much as it is nature and background. Hard work and trial and error got these pallet companies to where they are today. Technology is a late entrance and an unknown. It is rising in our industry but safely at a distance from most modern businesses in America.

So why share these points here and now?

In my view, the pallet industry is experiencing a big wave of transitions from first-generation founders to second-generation owners. While this is happening, many “old-school” purchasing agents are retiring. In their place, we welcome their younger millennial counterparts. There is a changing of the guard so to speak. Second-generation owners are modernizing the pallet industry in many marvelous ways while trying to preserve the blue-collar hard-working DNA that got the company to the heights it has achieved. If you are starting to purchase pallets, understanding the roots helps you know their strengths and limitations. If you are starting as the point person for recycling pallets, you can be more aware of the shaping forces around this process. If you are thinking of starting a pallet company, you have a clean slate about what kind of companies dominate the industry now.

The pallet industry is filled with hard-working men and women who devoted their lives to providing a better life for their families and employees. They pioneered and persevered through difficult moments and proved their character and resiliency. And now, on that foundation, their successors are innovating at a rapid pace through automation and technology. A good pallet company has a blue-collar DNA and work ethic coupled with wise automation and technology. Hopefully, you are fortunate enough to work with one of these rare and increasing combinations. They are the secret truth of pallet companies in America.