It is one thing to offer an alternative pallet at the price of wood in the short term. It can be quite another to keep on serving those customers when the money and the pallets are gone.
For both Axios, with its thermoset composite pallet, and iGPS Version 1 with its plastic pallet, the combination of high tech pallets and RFID capabilities offered the potential to be game changers. Both propositions initially enticed investors, but neither one worked out.
My advice to potential pallet pool investors and pallet customers alike is to proceed with caution when it comes to claims about pallet performance, as well as the ability of a pallet rental company’s business model to provide a long-term solution. Based on the narrative above, I would look for field results as well as lab reports when it comes to pallet performance and endurance.
Because pooling models can have a large minimum efficient scale. In some respects investment does involve a leap of faith as the pooling organization grows. Having said that, pooling companies are better served to try to control growth and traffic lanes, as PECO did 20 years ago by targeting private label goods. A good pool operator will look for ways to achieve a smaller minimum efficient scale in order to achieve profitability earlier, and to create leverage with potential investors.
Identifying a successful business model is a little more challenging.