The ROI of Vertical Balers: When Does It Make Sense to Invest?

In today’s competitive business environment, operational efficiency is no longer just an advantage, it’s a necessity. From retail and hospitality to manufacturing and warehousing, businesses are under constant pressure to reduce costs, improve sustainability, and make better use of their space.

For many operations dealing with large volumes of recyclable waste such as cardboard, paper, and plastics, a vertical baler can be a game-changing investment. But like any piece of capital equipment, the big question is: When does it actually make financial sense to invest?

This guide will walk you through how to calculate the return on investment (ROI) of a commercial vertical baler or industrial baler machine, factoring in cost savings, space optimisation, transport efficiencies, and real-world examples.

Understanding Vertical Balers

A vertical baler is a waste baling machine designed to compress recyclables into dense, manageable bales. These bales can then be stacked, stored, and transported more efficiently.

Unlike horizontal balers, which are typically used in high-volume industrial settings, commercial vertical balers have a smaller footprint, making them ideal for supermarkets, retail stores, warehouses, and smaller manufacturing operations.

The Key Drivers of ROI

Determining whether a baler will pay for itself comes down to a few measurable factors:

Transport Savings

Loose cardboard and plastics take up a lot of space in bins or skips, meaning you pay for air when transporting waste. By compacting materials, a baler reduces the number of pickups required from your waste contractor.

For example, if your current waste bin is emptied three times a week and a baler reduces this to once a week, your collection costs could drop by over 60%.

Floor Space Optimisation

Uncompacted waste takes up valuable floor space in storerooms or production areas. A vertical baler reduces clutter, freeing up space for stock, equipment, or operations. This not only improves workflow but also enhances workplace safety.

Labour Efficiency

Without a baler, employees often spend time breaking down boxes and moving waste multiple times. A baler allows staff to load waste directly into the machine, reducing manual handling and streamlining the disposal process.

How to Calculate Your Break-Even Point

The break-even point for a vertical baler is reached when your monthly savings equal the monthly cost of ownership (purchase or lease plus maintenance).

Here’s a simplified calculation:

1. Estimate your current waste costs – Include collection fees, labour costs for waste handling, and any floor space costs.
2. Estimate your savings – Fewer pickups, labour time saved, rebate income for bales.
3. Calculate net savings per month – Subtract ongoing baler maintenance costs from your total estimated savings.
4. Divide total investment by monthly net savings – This gives you the number of months until your investment is paid back.

Example:

Cost Estimates:

1. Current waste handling and collection costs:
   1. Carboard: $1,280 p/m
   2. Plastic: $480 p/m
   3. Annual Cost: $1,760 x 12 = $21,120
2. Verticle Baler Cost: $15,000 (make sure delivery and installation is included)
3. Waste handling and collection costs after equipment installation: $500 p/m = $6,000 per annum

ROI Calculation:

1. Annual waste handling and collection saving: $15,120
2. Equipment cost year 1: $15,000
3. Equipment payback time: 12 months
4. Savings:
   1. Year 1: $120
   2. Over 3 years: $30,360*
   3. Over 5 years: $60,600*

* Annual service costs may need to be applied to annual savings where required.

** All pricing and savings examples provided are estimates only. They are intended as a guide and should not be taken as a quotation or actual equipment cost.

Real-World Examples: Vertical Balers in Action

We’ve seen a wide variety of businesses achieve strong ROI from vertical balers. Here is a case studies from one of our clients:

IGA Supermarket

IGA Fresh Penola were looking for a way to compact their packaging waste to free up space where the empty cardboard boxes and plastics were stored and to minimise the amount of bin collections per week. They required a machine that could handle the volume of cardboard and plastic waste that the supermarket produced whilst still being compact enough to fit in the specified area. After installing a WastePac 100 Vertical Baler, the customer reported that the baler has become an asset to the supermarket and is easily managed by the staff.

Read the full case study here »

Beyond the Numbers: Sustainability ROI

Financial ROI is only one part of the equation. The other side is sustainability ROI. The environmental and brand value your business gains from better waste management.

Investing in a vertical baler contributes to:

• Reduced landfill waste
• Lower carbon emissions from transport
• Improved recycling rates

To better understand how to measure these benefits, check out Ecoskills Academy’s guide on calculating sustainability ROI. While this resource is internationally focused, the principles can easily be applied in Australia to track the environmental return and positive sentiment from customers on your investment.

When Does a Vertical Baler Make Sense for Your Business?

While every business is different, you’re likely to benefit from a vertical baler if:

• You generate a significant amount of recyclable waste per week.
• You’re paying for frequent waste collections.
• You have limited storage space and need to keep operations clear.
• You’re interested in turning your waste into a potential sellable recyclable.
• You have sustainability targets as part of your operational goals.

The South Australian Government have made this Waste Recycling Reporting template available online to assist in calculating waste volumes and tracking collections costs.

Choosing the Right Vertical Baler

When selecting a baler, consider:

• Waste Volume – Match machine capacity to your waste output.
• Material Types – Ensure compatibility with the recyclables you produce.
• Bale Weight & Size – Consider transport and storage needs.
• Ease of Use – Machines should be simple and safe for staff to operate.
• Service & Support – Choose a supplier that offers reliable after-sales service.

Common Misconceptions About Baler Investment

“Balers are only for large factories.”
Not true, many retail stores, supermarkets, and small warehouses see great ROI once they start baling a common waste stream in their operations.

“The payback period is too long.”
In many cases, savings on transport alone can return a payback period that will justify the investment.

“It’s too complex for my staff.”
Modern vertical balers are user-friendly, with safety features and straightforward operation.

Maximising Your ROI

To get the most out of your investment:

• Train staff on correct use to avoid downtime.
• Maintain the machine regularly to prevent costly repairs.
• Monitor waste volumes to adjust processes and ensure optimal bale density.
• Track your savings monthly to confirm you’re on target for break-even.

Time to Crunch the Numbers

For many businesses, the financial and environmental benefits of a vertical baler are too significant to ignore. From reducing transport costs and freeing up valuable space to generating recycling income, the ROI case is strong, often with a payback period of less than 24 months.

If you’re ready to see how much you could save, try our Waste Savings Calculator.

By combining cost savings with sustainability benefits, a vertical baler is not just an operational upgrade, it’s an investment in a more efficient and responsible future.

If you would like Waste Initiatives to conduct a ROI calculation on your business feel free to reach out to us below.