Tools, Formulas, and Financials

Plastic vs Wood Pallets, what to consider when calculating ROI

How to calculate ROI when considering a transition from wood to plastic pallets…

  • How much is your monthly purchase of non plastic pallets?
  • Do you use refurbished pallets? What are your monthly repair costs of non plastic pallets?
  • What is your monthly cost of damaged product due to broken non plastic pallets?
  • Determine your monthly cost for lost hours due to work injuries from non plastic pallets, this includes anything from splinters to back issues from employees lifting and moving wood or metal pallets by hand.
  • Determine monthly cost of hours associated with purchasing/warehousing, receiving/freight transportation for expendable non plastic pallets.

When you add these numbers up you will get a total monthly cost of expendable non plastic pallets.

Next determine the proper pallet for your application. You need to come up with the one time cost of your warehouse-use plastic pallet.

Payback calculation is done by dividing the acquisition cost of plastic pallets by monthly cost of non plastic.  The resulting number is the number of months it will take for you to get your return on your investment.