Profit Margin: Plastic Or Wooden Pallets?
Starting an export business from scratch is no mean feat. There are numerous decisions that you'll need to make, most of which will later have a significant impact on your profit margin.
You'll probably have to decide whether clients will receive your products packaged in a pallet made of wood or one made of plastic. This article examines various aspects of the two pallet materials and how these aspects may affect the profitability of your export business.
Construction
Wooden pallets may be advantageous for your start-up in the sense that they're often easier to construct than their plastic counterparts. A typical wooden pallet can be made by collecting recycled wood, treating the wood and joining the individual pieces together to form a pallet. A pallet-nailing machine is often used for this purpose.
On the other hand, plastic pallets are fabricated through a process known as injection molding. An injection molding machine is used to introduce melted plastic into a pre-formed mold where the plastic cools and solidifies into a pallet.
The fabrication of plastic pallets is often a more complex activity than that of wooden pallets. For this reason, wooden pallets will often be cheaper than pallets made of plastic and their fabrication often takes less time. Therefore, choosing wooden over plastic pallets might lower the capital input required for your business and it might mean that you'll get your pallets delivered within a shorter time frame.
Transportation
The cost of transporting pallets to their point of export will have a significant impact on your profit margin.
In a large number of cases, the cost of pallet transportation is directly proportional to the weight of the pallets and the number of pallets to be transported. The cost of transportation is likely to be lower for plastic pallets, assuming that the number of pallets to be transported remains constant. This is because plastic pallets are significantly lighter than pallets made of wood. Depending on how frequently you intend to export your product(s), choosing plastic pallets might give you a higher profit margin.
Exportation
Export regulations applicable to wooden pallets are less stringent than those that apply to pallets made of plastic. For example, wooden pallets need to comply with provisions of the ISPM 15. This is a set of minimum standards that need to be met before a pallet is declared suitable for use as an export packaging material. Failure to comply with the ISPM 15 might cause shipment delays for your products, which easily reduces your profit margin. Plastic pallets are exempt from the provisions of the ISPM 15.
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