Matt Altoff and his brother, Andrew, are co-owners of AAA Pallet & Lumber Co. in Phoenix, Arizona. AAA Pallet & Lumber has been providing high-quality wood pallets, crates, and skids to the greater Phoenix area for over 30 years.
Pallet Enterprise: What is the best piece of business advice you have ever received?
Althoff: The best business advice I have ever received is not to overreact when the pallet market appears to be heading in the wrong direction. We have learned that this market changes quickly and often, and the best thing you can do is to adapt and have a flexible business model. If you continue to provide exceptional customer service to both small and large customers, then you will continue seeing orders roll in.
Pallet Enterprise: Have you recently started pursuing any new markets/product lines?
Althoff: For the past year we have been combating a tough used pallet market. Prices were reduced by roughly 67% on grade A and grade B pallets. Due to this, we decided to invest additional resources into new skid, pallet, and crate production since the cost of new lumber has remained steady. We have seen a major shift in the larger export companies requiring new heat-treated materials, so our investment into the new custom pallets, skids, and crates business has been a major factor in our recent successes.
Pallet Enterprise: What is the one thing you do at your company that is different from other pallet companies?
Althoff: I believe our approach to customer service separates us from the competition. We like to meet with potential new customers at their sites to get a feel for their overall business and shipping needs. Instead of sending them a ‘one size fits all’ spec sheet, we like to come up with the most cost-efficient pallet design based on the weight, type of product being shipped, etc. We stay in constant contact with the customer and like to receive feedback from their forklift drivers, delivery drivers, and any other employees who are responsible for loading the pallets. For large custom orders, we will often build and deliver one sample pallet to ensure the customer is satisfied with the specifications and construction before moving forward.
Pallet Enterprise: What is one of the hardest business decisions you have ever made?
Althoff: One of the hardest decisions we had to make was whether to expand our business by acquiring a smaller, local competitor. Our new pallet lead time was becoming unsustainable, so we made an offer to a secondary pallet provider we had been doing business with for several years. The acquisition of his equipment and small fleet allowed us to expand quickly at a reasonable cost. We made that former owner our general manager. In addition to drastically decreasing lead times, we have continued to expand and increase efficiency.
Pallet Enterprise: What performance indicators do you track to measure how your company is doing?
Althoff: Our key performance indicators are fairly standard. We analyze our revenues, expenses, inventory, and cash in the bank on a daily basis. We also focus heavily on our Google reviews and customer feedback. We have added countless new customers because happy existing customers referred us. Anytime we can make a sale without going into the field is a good day for AAA Pallet & Lumber Company.
Pallet Enterprise: What is the biggest challenge your company is facing?
Althoff: Our biggest challenge is the state of the used pallet market. As I mentioned earlier, the used pallet market pricing in our region has dropped by about 67%. This drastic reduction in pricing is affecting core buy-backs, re-quotes for existing customers, and has caused many of our competitors to sell pallets at an unsustainable price, leading to an even worse used pallet market. We are beginning to see signs of this market recovering and will hopefully bring used pallets back to sustainable prices by the end of 2024.
