What should I check before buying a pallet company?

A pallet company looks simple from the road: stacks of wood in a yard and trucks coming and going. Underneath, it is a supply business with thin edges, where a lost customer or a lumber shortage can change the month. A buyer who walks the yard and asks for the records behind each stack will learn far more than from a summary. These are the areas worth your time before you make an offer.

What it makes and what it repairs

Ask how the work divides between new pallets built to order, repaired pallets and recycled pallets bought back and resold. Each has different customers, different labour and different risks. Find out whether the company builds to custom sizes or sells standard ones, and whether it takes part in any pallet pool or exchange arrangement. Those arrangements come with rules about who may repair or resell, so read them.

Where the wood and the cores come from

Lumber and used pallets, often called cores, are the raw material. Ask who supplies each, how long the relationships have lasted, and what happens if one supplier stops. A seller who has been buying cores from a few friendly warehouses may not be able to hand that goodwill to you. Ask also how the yard stores stock, since wet or damaged wood is a loss you inherit.

Customers, equipment and people

Most pallet companies rely on a short list of local shippers. Ask who they are, how orders arrive and whether any customer has a standing contract that may need consent to transfer. Walk the yard with someone who knows the equipment: saws, nailing lines, forklifts, trucks. Then talk about the crew, because skilled hands are hard to replace. See also the packaging manufacturer guide.

• A walk of the yard, with a list of what is owned and what is leased.
• Customer sales by name and the seller’s account of who could leave.
• Supplier names for lumber and cores, and any supply contracts.
• Maintenance records for the main machines and vehicles.