For over 30 years the leading pallet and sawmill magazine in America.
Thinking Ahead–Letter from Chaille: A Tale of Two Recyclers – Is Upcycling for You?
Pallet Enterprise, publisher, Chaille Brindley explores the possibilities in working with upcyclers to boost profits, visibility and environmental reputation in the community. He explores the pros and cons of this emerging decoration trend.
By Chaille Brindley
Date Posted: 11/1/2016
The pros and cons of an emerging decoration trend.
Pallet Enterprise, publisher, Chaille Brindley explores the possibilities in working with upcyclers to boost profits, visibility and environmental reputation in the community.
Some of the worst ideas and biggest nightmares when it comes to pallet projects start with the phrase, “So my wife saw this design on Pinterest.” If you run a pallet recycling or manufacturing facility, you have probably fielded calls for homeowners and hobbyists looking to obtain recycled pallet lumber.
The concept of upcycling – the practice of turning old products into a new item when its usable life comes to an end. Upcycling has exploded recently in popularity as more and more people are learning how to do it thanks to social media and websites, such as YouTube and Pinterest. And old wooden pallets are among one of the most popular things to upcycle.
Whole pallets have been used to build a number of artistic items for parks, such as pallet mazes and pallet towers. Homeowners and hobbyists turn pallet lumber into signage, art, furniture and decorative coverings. The old, worn wooden look is all the rage.
So what does this mean for the wooden pallet industry? Some see this new trend as nothing more than a nuisance. They don’t want to deal with all these treasure seekers looking for the perfect pallet or two. Others believe this is an opportunity. I think it all depends on how you look at it and how your company is set up to process pallets and non-typical customer requests. What are you doing right now with odd-sized material? What about scrap pallets that are typically going into a grinder? Is upcycling a way you can super-size the profits for that material?
It all depends on who comes knocking on your door for old pallets and recycled lumber. If you tend to get people who want it for free or pay almost nothing for it and want lots of hand holding, you might be better off passing on this ‘opportunity.’ But if you can provide precut boards that eliminate much of the hard work of dealing with old pallets, you may be able to increase your profit on that waste material.
Let me tell you the tale of two pallet companies. One has made upcycling work for it. The other has tried it and found the process not a fit. I am not taking sides here. Both are good companies that know their customer bases. But these examples may help you make your decision.
First, let’s start with the pallet recycler that has jumped into upcycling in a big way. Larry Miller-Bopp, president of sales, J.C. Pallets Co., Barhamsville, Virginia, explained, “Most of the people who come looking to buy material from me have already tried to rip apart pallets themselves and realize how much of a pain it is. They have come to understand that getting free stuff is not worth the effort when you consider the labor, cost of bandsaw blades, the breakage loss of material because they don’t know what they are doing.”
Except in the rare case of charities, J.C. Pallets doesn’t offer old boards or pallets for free. Instead, it sells them for anywhere from 15 to 20 cents per board on the low end to as much as a dollar depending on the look and effort involved. Miller-Bopp added, “We tear apart just about any odd-sized pallet that we cannot resell and some of the worst broken stuff goes to the grinder. Some of that lumber is used in pallets. We sell the rest. Upcycling customers are among our higher margins even though some require a little more hand holding.”
J.C. Pallets will sell small lots, but mostly it sells racks of 500 to 1,000 pieces of recycled lumber. And the company focuses on selling dismantled pallets instead of whole pallets. This allows them to charge for the pallets and position the product as value-added.
Miller-Bopp has done a lot of projects himself using pallet lumber so he knows a lot of the shortcuts and pitfalls. He laughingly said, “Sometimes I try to talk the customer out of the project because they expect it is going to be a lot easier than it really is. I try to help them find the right sizes for their projects.”
J.C. Pallets funnels material under 40 inches long toward upcycling or recycled lumber orders. Usually, the company keeps anything above 24 inches in length from going to the grinder. Many customers want the darker, more worn-looking material. This is not the look that most pallet customers want for shipping pallets.
Most of the customers come by word-of-mouth. They see the wood used in a project somewhere and hear about buying recycled lumber from J.C. Pallets. The company is working on developing a new part of its website to focus on upcycling and sales of recycled lumber to the commercial public. The company also uses some social media marketing on Facebook and Pinterest to build relationships with local hobbyists and homeowners.
Now, let me tell you the other side of the equation. Some upcycling experiences turn into nightmares. John Swenby, president of Paltech Enterprises, said that hobbyists were not something he wants to build his scrap business around. With locations across the Midwest, particularly the Chicagoland area, Paltech has not found the sales are worth the effort.
Swenby lamented, “We get people in here who want pallets for free or at very low cost, and then they want a lot of help pulling one pallet out of the middle of a stack. There are liability concerns, and then they want help loading everything or transport.”
Paltech has found that upcycling takes attention away from its core business without providing a lot of benefit. As a result, the company has developed a policy that it does not sell small lots to hobbyists or homeowners.
Swenby commented, “Everyone thinks that recycled pallets or boards should be free. But we have lots of costs in procuring them, transportation, sortation, storage and sometimes dismantling.”
So hobbyist and homeowners, if you think pallet boards for your project should be free, you may be out of luck. Those days are starting to disappear. You may be able to get some deals. But many companies are starting to wise up. And unless you want to risk stealing pallets from a location, you may have to pay a bit for them. Also, as Miller-Bopp pointed out, if all you want is worn looking lumber, the easiest way is to buy lots of dismantled boards if you can find them. At the end of the day, how much is your time and safety worth?
Let me point out a few rules of thumb to consider if you are a recycler considering how to handle this upcycling dilemma. I would not allow upcyclers to wander around my lot. There is just too much risk and liability. They could cut themselves, fall on pallets, get run over by a forklift, etc. Instead set up an area of your lot where upcyclers can visit. Ideally, this would include some weathered pallets and racks of dismantled boards. The better organized it is, the more you can charge. The reason is that you have done all of the hard work.
Secondly, know your market. In Chicago, you may get customers who only want small numbers of pallets or a limited amount of boards compared to rural Virginia where J.C. Pallets is located. This affects how picky the customers may be. And you should charge accordingly. And you may want to establish minimum quantities to eliminate the largest problem customers who are not worth the hassle.
Look to turn upcycling customers into contacts for other business, notably shipping pallet sales. Just because you offer recycled boards doesn’t mean you have to let every Pinterest addict take up your time. But you can ask inquiries if they have any other pallet business that they are looking to outsource or put up for bid. Also, use donations of upcycled pallets as a tax write off. This may be a great way to make those pallets worth more than just grinding them up.
Finally, use upcycling as a way to raise awareness of the industry and its positive environmental story. You can develop a small little handout to give to hobbyists and homeowners that talks about the wooden pallet industry and your practices. The only way to change the negative perceptions about wood products is one conversation at the time. And this is a great way to get people talking positively about pallets.
As people get exposed to the many innovative things that can be done with wood and wooden pallets, our industry will benefit from the positive exposure. Our readers are aware of how important pallets are to our society, but most people don’t get it. Use upcycling to spread the positive story of your company and our industry.
Ultimately, it comes to the money. Can you make upcycling work for your business? Miller-Bopp suggested, “I can get more money from hobbyists than flooring or small pallet customers and certainly grinding material for mulch. Even with the processing and customer cost, I can get four to five times as much money for those pallets depending on the customer.”