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How to Sell a Pallet Company

Pallet work is plain, steady and needed every day by the plants across the river. El Paso Business Brokers Edge introduces pallet company owners to a broker partner.

Here is what buyers dig into.

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A worker in gloves and safety glasses nailing boards onto a wooden pallet on a workbench in a busy yard, stacks of lumber behind him

What buyers ask a pallet owner

How much of your volume goes to Juárez plants?
They want the split between plants, local distributors and recycled pallet buyers, and which accounts have stayed with you the longest.
Where does your lumber come from?
A buyer checks that you have more than one supplier and that your cost per board has been tracked so margins are clear.
Do you heat treat for export, and who runs it?
If you sell treated pallets, they ask who keeps the treatment program and stamp current and how it moves to a new owner.
Is the yard leased or owned?
Yard space, zoning and room for trailers matter. A buyer wants to know they can stay put for years after closing.

Your customers live on both sides of the river

Most El Paso pallet companies sell to manufacturers in Juárez and to the warehouses and distributors that serve them. Plants burn through pallets, so the orders come back every week. Buyers like that.

They get careful when one plant group buys most of your output. If the top few customers are more than about 15 to 20 percent of sales, expect questions about contracts, how long they have bought from you and who at the plant places the orders.

Show sales by customer for three years. A mix of new builds, repairs and recycled pallet sales tells a buyer you can ride out a slow quarter at one plant.

Lumber cost and margins

Lumber is your biggest cost and it moves. Buyers look at whether your prices to customers rose when board costs rose, or whether you ate the difference.

  • Your lumber suppliers and how long you have used each
  • Cost per pallet type, tracked over time
  • Price changes you passed to customers and when
  • Scrap, grinding or sawdust sales, if you have them

Clean numbers here are what let a buyer trust your cash flow. For how that cash flow turns into a price, see how buyers price a business.

The yard and the machines

Nailing machines, saws, dismantlers, a heat treatment chamber, forklifts, trucks and trailers make up most of the hard assets. Keep a list with ages and repair records.

In an asset sale to one buyer, the operating equipment can often move without sales tax, while vehicles are taxed when the buyer titles them. Our guide on sales tax on equipment in a business sale explains it. Confirm with your CPA.

If you heat treat pallets for export, the treatment program runs through an approved inspection agency and is tied to your operation. Ask the agency and the attorney how it continues under a new owner. Don't assume it moves on its own.

Crew and safety

Pallet shops depend on a trained crew and a yard lead who keeps orders moving. Buyers ask about turnover, injuries, and whether the lead can quote and schedule without you.

A clean safety record, a bilingual lead and written steps for each pallet type all help the price. An owner who still runs the saw and every customer call hurts it.

Timing your sale

Keep orders steady while you sell. A drop in volume during the process makes buyers nervous. Most sales take seven to nine months from hiring a broker to closing; our timeline walks through the stages.

Ready to see what your pallet company is worth? Request a valuation or call (915) 555-0193.

Call (915) 555-0193