Buying & selling
The hidden cost of Grade A on a warehouse floor
Request pricing
Everything marked with a star is required. The rest helps us quote faster.
Somebody, once, specified Grade A. Nobody has revisited it since, and the purchase order has been copied forward for six years.
This is the single most common avoidable cost in pallet procurement, and it is almost always a documentation artefact rather than a decision. The original specification was made for a reason that may no longer apply — or may never have applied.
What you are actually paying for
Grade A is not stronger than Grade B in any meaningful sense. A Grade A pallet with two replaced deck boards is not stronger than one with none. What Grade A buys you is consistency and appearance.
| Attribute | Grade A | Grade B | Matters when |
|---|---|---|---|
| Structural soundness | Yes | Yes | Always — both are sound |
| Original stringers | Yes | Not necessarily | Racking, conveyors |
| Thickness consistency | High | Variable | Automation, wrapping machines |
| Appearance | Clean | Weathered | Customer-facing delivery |
| Typical remaining lives | 3 – 5 | 1 – 3 | Closed loops |
| Price, Denver metro | $8.50 – $13.50 | $5.50 – $9.00 | Always |
The three questions
We ask these on every quote where a customer specifies Grade A. If all three answers are no, we say so — and yes, that means quoting ourselves down.
- Does it go on a rack beam? If yes, Grade A, and this is not negotiable. An unsupported span is unforgiving and a companion stringer changes the load path.
- Does it touch automation? Conveyors, AS/RS, robotic palletisers and high-speed wrappers all care about dimensional consistency. Grade A.
- Does a customer or an auditor see it? If a pallet arrives in a retail back room, a showroom or a pharmaceutical goods-in, appearance is part of what you are shipping. Grade A.
No to all three — internal floor movement, one-way outbound shipping, yard storage, dunnage — and Grade B is the correct specification.
What it is worth
| Annual volume | All Grade A | 60% moved to B | Saving |
|---|---|---|---|
| 500 pallets | $5,375 | $4,085 | $1,290 |
| 2,000 pallets | $21,500 | $14,340 | $7,160 |
| 10,000 pallets | $107,500 | $71,700 | $35,800 |
| 40,000 pallets | $430,000 | $286,800 | $143,200 |
The opposite mistake
It exists and it is worse. Buying Grade B because it is cheaper and then racking it is not a procurement saving, it is a deferred incident. We have declined orders where a customer wanted Grade B for racking, and we would do it again.
If price pressure is real and racking is required, the answer is volume and lead time, not grade. A truckload of Grade A ordered two weeks out is meaningfully cheaper than 200 units ordered for tomorrow, and it is still Grade A.
How to actually change it
Pull the last twelve months of pallet purchases. For each destination — not each order, each destination inside your operation — answer the three questions. In our experience about 55 to 70 per cent of volume in a typical distribution operation answers no to all three.
Then change the standing order. That is the whole project. It takes an afternoon and it does not require anyone's approval except the person who owns the purchase order.