Overordering, wrong grade, ignoring retrieval costs — the mistakes are common and expensive. Here's how to avoid them.
Mistake #1: Buying Based on Price Per Unit Alone
The most common mistake in pallet purchasing is choosing the lowest per-unit price without considering total cost. A $3 Grade C pallet that fails after 2 load cycles is more expensive than a $7 Grade B pallet that lasts 15 cycles. Always calculate cost per load cycle, not cost per pallet. Factor in expected lifespan, repair costs, and recovery/buyback value at end of life.
Mistake #2: Overordering 'Just in Case'
Ordering 20% more than you need 'to be safe' means 20% of your pallet budget is sitting idle in storage. Excess pallets take up warehouse space (which has a cost per square foot), deteriorate if stored outdoors, and represent tied-up capital. Instead, work with a supplier who can deliver on short notice. We offer same-day delivery for in-stock items — so there's no need to maintain a large safety stock.
Mistake #3: Using the Wrong Grade for the Application
Using Grade A for one-way outbound shipments wastes money — you're paying for quality you'll never recover. Using Grade C for racking applications risks product damage and worker injury. Match the grade to the application: Grade A for racking, automated systems, and customer-facing environments. Grade B for general floor storage and domestic shipping. Grade C for one-way outbound and low-load applications.
Mistake #4: Ignoring Pallet Retrieval Costs
If you're shipping pallets outbound and not recovering them, your effective pallet cost includes the full purchase price with zero recovery value. For operations shipping 500+ pallets per month, the annual cost of 'lost' pallets can exceed $50,000. Consider implementing a pallet retrieval program, switching to lower-grade pallets for one-way trips, or using a buyback-eligible supplier who can recover pallets from your customers' locations.
Mistake #5: Not Inspecting Deliveries
Trusting a supplier's grading without verification is risky — especially with a new supplier. Always spot-check deliveries against the stated grade criteria. Pull 5–10 random pallets from each delivery and inspect them against the supplier's published grading standards. Document any discrepancies with photos and report them immediately. A quality supplier will welcome this scrutiny.
Mistake #6: Storing Pallets Improperly
Pallets stored outdoors without cover deteriorate 3–4x faster than indoor-stored pallets. UV exposure degrades wood fibers, rain increases moisture content (promoting mold and decay), and temperature cycling causes expansion/contraction that loosens joints. Improper storage can turn a $7 Grade A pallet into an unsalvageable piece of firewood within 6 months.
Mistake #7: Not Having a Recycling Program
Paying for waste hauling to remove used pallets is throwing money away — literally. A pallet recycling or buyback program can turn that disposal cost into revenue. We buy back pallets at $2–$6 per unit depending on condition, and provide free pickup for quantities over 50 units. Many of our clients have converted a $500–$1,000/month disposal expense into $200–$800/month in buyback revenue.
The Fix
Most of these mistakes share a common root cause: treating pallets as a disposable commodity rather than a managed asset. The businesses that get the best economics from their pallet programs are the ones that treat pallets the same way they treat any other piece of logistics equipment — with planning, tracking, and optimization. We help our clients set up pallet management programs that avoid all seven of these mistakes. Contact us for a free pallet audit.
Written by
San Diego Pallet Co. Editorial Team
June 14, 2024
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