Dan Fikes

# Comprehensive Cost Analysis: Plastic Bins vs. Reinforced Cardboard Storage

For Small-Scale Warehouse Operations (1,000-5,000 sq ft)

## Initial Investment Comparison (Base Unit: 100 Storage Units)

### 1. Traditional Plastic Bins

#### Purchase Costs

Small (12"x8"x6"):

- Unit cost: $8-12

- Quantity: 40 units

- Subtotal: $320-480

Medium (18"x12"x8"):

- Unit cost: $15-20

- Quantity: 40 units

- Subtotal: $600-800

Large (24"x16"x12"):

- Unit cost: $25-30

- Quantity: 20 units

- Subtotal: $500-600

Total Initial Investment: $1,420-1,880

#### Additional First-Year Costs

- Labels: $50

Total First Year: $1,470-1,930

### 2. Reinforced Cardboard System

#### Material Costs (100 Units)

Box Acquisition:

- Reused boxes: $0 (assumed from incoming shipments)

- Sorting labor: $100 (5 hours @ $20/hr)

- Quality inspection: $60 (3 hours @ $20/hr)

Reinforcement Materials:

- Corner supports: $40 ($0.10 x 4 corners x 100 units)

- Bottom reinforcement: $25 ($0.25 x 100 units)

- Edge protection: $30 ($0.30 x 100 units)

- Adhesive/tape: $50

- Total: $145

Labor for Reinforcement:

- Assembly time: $400 (20 hours @ $20/hr)

- Quality checking: $100 (5 hours @ $20/hr)

Additional Setup:

- Labels: $50

First Year Total: $755

## Annual Operating Costs

### 1. Plastic Bins

Replacement Costs:

- Annual breakage rate: 5-10%

- Replacement units: 5-10 bins

- Cost: $71-188

Label replacement: $25

Annual Operating Cost: $96-213

### 2. Reinforced Cardboard

Replacement Costs:

- Turnover rate: 25-30%

- New units needed: 25-30 boxes

- Materials: $145 × 30% = $43.50

- Labor: $500 × 30% = $150

- Total: $193.50

Label replacement: $25

Basic repairs: $100

Annual Operating Cost: $318.50

## Labor Efficiency Explained

Labor efficiency in this context refers to:

1. Box Preparation Time:

- Plastic bins: Ready to use out of box

- Cardboard boxes: Require preparation time for:

* Initial reinforcement

* Size customization

* Repair and maintenance

2. Handling Time:

- Plastic bins: Consistent weight and durability

- Cardboard boxes: Variable handling time due to:

* Periodic reinforcement checks

* More careful handling required

* Replacement preparation

3. Task Breakdown (Hours per 100 units annually):

Plastic Bins:

- Basic maintenance: 5 hours

- Replacement setup: 2 hours

Total: 7 hours annually

Cardboard Boxes:

- Reinforcement work: 20 hours

- Replacement prep: 15 hours

- Basic repairs: 10 hours

Total: 45 hours annually

## Cardboard Recycling Value Analysis

### Baling Potential

Average corrugated cardboard bale:

- Weight: 1,000-1,500 lbs

- Market price range: $50-150 per ton (varies by region and market conditions)

### Revenue Calculation for Replaced Boxes

Assuming 30% annual replacement:

- 30 boxes × average 2 lbs per box = 60 lbs

- Additional scrap from reinforcement: ~20 lbs

- Total annual recyclable cardboard: ~80 lbs

- Potential revenue at $100/ton: $4

### Bulk Recycling Opportunities

For warehouses handling regular incoming shipments:

- Combine storage box recycling with general cardboard waste

- Typical small warehouse monthly cardboard waste: 500-1,000 lbs

- Potential monthly revenue at $100/ton: $25-50

- Annual potential: $300-600

### Recycling Best Practices

1. Bale Formation:

- Clean cardboard only

- Remove all tape and labels

- Compress properly for maximum value

2. Storage Until Sale:

- Keep dry

- Stack efficiently

- Track market prices for best selling time

3. Local Recycler Relationships:

- Establish regular pickup schedule

- Negotiate better rates for consistent quality

- Consider joining forces with nearby businesses

## Five-Year Cost Projection (Including Recycling Revenue)

### 1. Plastic Bins

- Year 1: $1,930

- Year 2: $213

- Year 3: $213

- Year 4: $213

- Year 5: $213

Total 5-Year Cost: $2,782

### 2. Reinforced Cardboard

- Year 1: $755

- Year 2: $318.50 - $304 (recycling revenue) = $14.50

- Year 3: $14.50

- Year 4: $14.50

- Year 5: $14.50

Total 5-Year Cost: $813

Potential Cost Savings Over 5 Years: $1,969

## Break-Even Analysis

Initial Cost Difference: $1,175 ($1,930 - $755)

Annual Operating Cost Difference (including recycling): $198.50

Break-Even Point: 5.9 months

## Recommendations

1. Recycling Program Integration:

- Set up dedicated collection area

- Train staff on proper sorting

- Monitor market prices

- Build relationships with recyclers

2. System Choice Based on Volume:

- Low volume (under 1,000 sq ft): Start with cardboard

- Medium volume: Hybrid system

- High volume: Consider plastic for high-traffic items

3. Cost Monitoring:

- Track labor hours

- Monitor replacement rates

- Document recycling revenue

- Adjust system as needed