Companies, both small and large are continually searching for ways to reduce costs and remain competitive in the marketplace. All aspects of the business are evaluated, from the cost of raw materials and labour to the utility bills. This continual assessment should also include the packaging that is used; the following five points should help your business to drastically reduce the cost of packaging with a few simple but effective steps.
1. Simplify Packaging
Thoroughly analyse your product portfolio. This involves evaluating your entire inventory and recording the size and shapes of the items within your business that require packaging. As more and more product lines are added, it’s likely that more and more packaging solutions are also added, both of which require storage and monitoring to ensure that supply always meets the demand. If this is the case for your business, it is worthwhile investing time into streamlining your packaging solutions. For example, if inserts or partitions are used, multiple products may be accommodated for within one a box of the same size and shape.
2. Reduce Packaging Times
A lengthy packaging time can often be a hidden cost to many businesses. As at first thought, to reduce packaging costs, businesses often look to the unit cost of the materials used, when in reality, one of the highest expenses is the time taken to package the item. By reducing packaging times, ultimately, your business will be saving on labour costs, which is usually one of the highest outgoings of any business. An increase in productivity and output during the packaging stage often results in reduced packaging costs, with the benefit of not comprising on the quality of the packaging material due to using a cheaper material to package the items in.
3. Reduce Transportation and Shipping Costs
Most businesses will use predesigned and pre-made packaging, this is because they are produced in bulk which initially makes them cheaper to purchase when compared to the alternative of customising each element of the packaging to fit the product. At first thought, this is considered an easy decision to make, but, when it comes to the transportation and shipping of the packaging items, the idea can often seem a lot less appealing. The initial investment into well-fitting packaging is far less than the increased shipping costs the business occurs for what is essentially empty space within boxes in lorries, ships or planes. Packaging that is poorly fitted leaves a lot of wasted space within the chosen method of transport. When a box is not completely full, it is still taking up the same amount of space as when it is full. If an item has custom fit packaging, more items could be put into the transportation or shipping containers. It ensures no space is wasted, at more items can be delivered at one time, which results in reduced transportation and shipping costs.
4. Avoid Damage During Transit
One of the primary functions of packaging, is to protect the item enclosed from any damage. If an item is delivered to a customer and it is damaged, it is likely to have a huge impact on customer satisfaction and brand loyalty. If a damaged item is delivered to a store, where it is intended to go on a shelf and be sold, it can cause a reduction in sales. It is frustrating for both the business and consumer to receive a damaged item, so it is critical for your business to prevent and try to avoid any damage during transit. It is vital for business to evaluate the performance of the packaging used. For example, are the boxes easily and efficiently stackable? Does polyolefin shrink wrap provide enough protection? Should foam fitments be included? Take a look at our recent blog how to avoid damaged goods and returns with packaging here.
5. Value Custom Designed and Made Packaging
Packaging accuracy is a must when your business is looking to reduce the costs. Packaging solutions that factor in the materials used, the size of both the product and the packaging and how the item will be stacked or shipped, amongst other criteria are just some of the considerations a business should evaluate.
How has your business reduced its packaging costs? Let us know via our social media channels – we would love to hear from you!