Wood shipping pallets can be a good source of free wood for building not only smaller items, such as furniture or compost bins, but for building structures. Pallets in use today fall into two categories: pooled pallets and pallets that change ownership. Pooled pallets are sturdy, high-quality pallets that have maintained ownership. They are tracked and recycled by the goods distributors that use them. Pallets that change ownership have no controlled system for return and reuse. These pallets are the pallets that you can often recycle into building materials for your own use.
Find a good source of wooden pallets. For example, check tile stores, machinery dealers of various kinds, major appliance dealers, machine shops, etc. Always ask before taking pallets unless they are sitting inside a dumpster. Some stores use a pallet service and reuse their pallets. If you are looking for exotic hardwoods for specialty uses, such as making furniture, consider which local stores are getting large shipments of foreign imports.
Use a pressure washer to clean the pallets as needed. Some pallets get a lot of grit and pebbles ground into the wood, so you might need to sand the boards down after breaking apart the pallet.
Break down the pallets or use them whole. There are several methods for breaking down pallets. You can pound the boards apart by using scrap blocks of wood as braces as needed. Pull out nails as the nail head comes up high enough to get a hammer claw on it. Some pallets are constructed with ring nails. These can be harder to pound apart, as ring nails have a threaded portion made of multiple ring-like threads that roll around the shank. This feature makes the nail highly resistant to withdrawal. You can drill through the head of the nails with a sheet metal drill bit before pulling apart the boards. Or, you can cut the boards at the stringers to separate them.
After pallets are broken down, the size of the boards determine what you can do with them. Large pallet boards can be used just like any other construction lumber. Small boards can be used for smaller projects, such as birdhouses or furniture.
Sort out the standard-sized pallets if you are using the pallets whole. Because you will likely have more of them, they make good building blocks.
Cap the open ends of the pallets with a 2-by-4, if desired, to make screwing the pallets together easier.
Stack the pallets to create a structure -- for example, a tiered seating area -- or create structural panels. If stacking pallets, use tie rods to stabilize them as needed. You can also use steel tie plates to attach pallets together to create assorted structures.
Create structural panels by laying the pallets flat and attaching them along their edges. Although you can nail them together, square head or hex head exterior screws hold better. Strengthen by adding plywood or aluminum sheathing. If desired, you can then insulate between them using spray insulation.