Will Lumber Prices Affect Your Pallet Business in 2022
There is no such thing as free pallets, and whether we like it or not their skyrocketing cost is directly linked to your operational costs. False? We’ll take a closer look at this argument below.
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John Charles Wilker, The Simplest Biz Misinformation
Lumber is the first and most expensive ingredient in the creation of a pallet. Yet, according to the professor of a scavenger course, John Charles, lumber prices have no influence on your recycled wood pallet business. This couldn't possibly be farther from the truth! I know he's just trying to sell an overpriced course to as many folks as possible, however, the information that he states makes no sense! This video is my response to the misinformation that he put out in his video!
If you haven't been watching the market lately, lumber prices have undergone a steady incline in price, so much so that many people are wondering if this will affect their pallet business. The short answer is yes.
The Cost of Lumber Does Have an Effect On Us
It's not just the new pallets, it's also the recycled pallets. The reason is none other than good old scarcity. With such high demand and such low supply the cost of lumber has skyrocketed.
So what does this mean for us? Not only will we pay more for wood pallets, but we will also pay more for used wood pallets as the cost of lumber will affect both new and used wood.
We need to put this into perspective, however, because it doesn't mean we have to change our business or even stop doing what we do. Wood pallet manufacturers are already factoring in the increase in price due to scarcity, which is why I think we won't see much of a change in price.
It's also important to note that this doesn't just affect our industry, but all industries have been affected by the increase in lumber prices. They too need to find an alternative because the cost of a pallet is a small part of their total cost.
Trust me when I say this will have a direct effect on your business. Automatically, the cost of goods is going up, and as a result, your cost of operation is going up.
Do Lumber Prices Affect Recycled Pallet Businesses?
Expert journalists claim that before the pandemic, brand new pallets cost $12 and now $21. Of course, this all had a very significant ripple effect on the recycled pallet business.
The reason is that recycled pallets are still in use, they are traded on the market daily. If this cost increase happened to new pallets only, there would be no effect. However, that's not the case since recycled pallets are still in circulation which means prices will continue to rise as demand rises! The real reason behind all that though is they're using these reports and news items as catalysts to pave the way for new legislation.
Conclusion
If you operate in the pallets business you're going to need wood, gloves, ratchet straps, nails, and everything else you need in your business. Your cost of operation is clearly going up, and for better or worse, it does have an effect on you.
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