22 WESTERN PALLET
and finished pallet prices are strongly shaped by the highly competitive marketplace.
Let’s consider the benefits of asset-based pallet suppliers. First, given their capital investments in production capacity and trucks, they have complete control of the sales and fulfillment process from start to finish. This degree of control and certainty can be desirable to specific customers, especially when pallet supply is tight. Multi-site operators can also serve customers in the various locations where they have plants, and over time, establish new locations to serve the expansion needs of existing customers. As a rule of thumb, pallet plants usually deliver up to a 150-mile radius.
Also, some local clients look to build goodwill by sourcing locally. Such companies can enhance their reputation in the community by dealing directly with the pallet supplier located in their town.
Non-asset-based pallet suppliers
Unlike the asset-based provider, the pallet broker or non-asset-based pallet supplier does not rely on bricks and mortar. As such, it is not constrained existing locations or production capabilities. Instead, it builds off its relationships with asset-based pallet and transportation businesses to serve customers, subcontracting with pallet producers that best meet customer requirements such as pallet specification and delivery requirements, physical locations, and remittance terms. The broker takes a small margin to facilitate transactions.
And whereas asset-based providers typically require a substantial number of employees, the broker has a limited staff, relying predominantly on an inside sales team. Rather than manufacturing, the focus of the non-asset-based provider is on sales and service, placing orders with plants that best meet customer needs.
The non-asset-based supplier typically relies heavily upon its investment in technology to coordinate sales orders and fulfillment processes. Generally, their digital systems are matched only by a few of the largest asset-based operators.
Because the non-asset-based provider is not constrained by existing plant locations or production limitations, it can offer great flexibility to customers and a highly robust and reliable supply chain to deliver the types of pallets needed, where needed. When an existing client launches or makes an acquisition at a new location, for example, it can leverage its relationships
address the pallet requirements. Likewise, suppose a particular pallet manufacturer faces a production disruption or doesn’t have the equipment to make a certain pallet. In that case, the broker can shift the order to a different pallet operator to ensure delivery.
Asset based
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