6 Strategies to Help
Cut the Cost of Packaging
By: Brian Gertin
When looking for ways to maximize profit margins, it is important that you don’t overlook the cost of packaging. Expenses related to product development, manufacturing, administration and operations, etc., are almost always at the forefront of one’s mind when thinking of common business expenditures, but packaging should be considered alongside these. For something that is seemingly so simple, as your operations grow and you use more and more packaging materials, the costs associated with packaging and fulfillment can balloon.
The good news is that there are a number of different ways to save on the cost of packaging. From right-sizing material usage, to furthering automation, to marketing your products via your packaging, there are always opportunities to cut back on costs. And, when you consider the number of packages your organization ships in a day, week, month, year, even a few cents saved per package can go a long way.
Let’s look at some of the ways your organization can save on the cost of packaging.
How to Reduce the Cost of Packaging
Every package is unique, which is why there isn’t a one-size-fits-all solution when it comes to reducing the cost of packaging. Here are a few options you might consider, depending on the types of products that you are shipping:
The single greatest way to reduce the costs associated with your packaging operation is to integrate automated packaging machinery into your workflows. Automated packaging machinery, like Wulftec Pallet Wrappers or BestPack Case Sealers, can help reduce material costs (by measuring material usage per package and reducing waste) and costs associated with labour. An automated stretch wrapper, for example, can wrap upwards of 100 loads per hour with only a single operator nearby to push a button. That same operator could also oversee a second or third machine within close proximity, meaning a single employee could generate 300 wrapped loads per hour – a massive increase in productivity.
When it comes to material savings, most automated stretch wrapping machines come equipped with advanced software which measures material output in realtime, and – if the size and load of the weight are inputted to the software correctly – disperses the exact amount of material required for a strong wrap. This way you can reduce wasted materials and the costs associated with them.
Automating your packaging workflow is the surest way to reduce the costs of your packaging operations. For more information on automated packaging equipment, click here to read more or contact Gertex directly to speak with one of our packaging experts.
2. Right-Size Material Types
The bigger a package is, the more it will cost to ship that item. You might not be able to reduce the size of your products, but you can look for ways to either reduce or optimize the type and size of your packaging materials. For example, if you’re using boxes which are larger than necessary you’ll not only be spending more money than necessary on the size of the package, but also you’ll be spending additional money on void fill to properly secure the item within the package. Corrugated cardboard boxes come in all shapes and sizes, so be sure to do your research and find the most accurately-sized shipping boxes given the size and fragility of your products.
On the topic of product fragility, consider the thickness of the corrugated boxes you’re shipping your products in. If your product is strong, resilient, and unlikely to be damaged in transit, then you might be able to make do with a cheaper and thinner corrugate option. However, never cut costs on corrugate if your product is in any way fragile; any money you save on costs upfront will be far outweighed by the costs associated with customers receiving broken or damaged items. To learn more about the different strength and thickness options when it comes to corrugate, click here to read our blog on the topic.
3. Minimize Damage to Products
Protecting your product during transit is so important, that really it is in itself a strategy for cutting the cost of packaging. As stated earlier, even if you save money on the cost of packaging upfront, your business will incur even more cost from the cost of refunds and exchanges if the product arrives broken or damaged. Even if the cost of packaging is higher upfront, you will save money in the long-run by reducing losses due to damaged products.
4. Warehouse Organization and Stocking
Consider the systems of storage and movement within your warehouse to identify ways the process can be streamlined. Not only do you need to be ensure product packaging is organized and in-stock for when you need it, but you might be able to speed up the process by optimizing how and where your products are packaged. The relocation of packaging materials and equipment could greatly reduce packaging times and increase the overall efficiency of your operations.
Also, consider 3rd-party storage for the majority of your packaging stock. Often it is more economical to have the majority of your stock stored off-site and transported to your location once a week, twice a week, etc., than it is to store all of your monthly packaging material stock on-site. This frees up more space in your facilities for machinery, equipment, or product stock, ultimately increasing the efficiency of your operations. Gertex offers stocking and next-day delivery services on most items, contact us for more information.
5. Volume Discounts
On the other end of the spectrum, if you have ample warehouse space to accommodate packaging material stock, then consider buying in bulk. Basic economics always plays a role in the per-unit cost you pay for materials. Look for opportunities to build relationships with materials providers, making it easier to get ongoing price cuts when you are loyal to buying from the same vendor. This method for cutting the cost of packaging is only recommended when you have consistent orders and a high volume of products moving through, and if you have the physical space to accommodate the packaging materials.
6. Branding and Printing
Finally, turn your packaging materials into a marketing initiative by branding all of your packaging. Custom printed cardboard and tape can be an excellent way to strengthen the branding of your company and is, essentially, adveritising to your customers and anyone else who sees the shipment. By branding your packages you are using them as a marketing tool, which is in turn generating profit for you and, in effect, helping to reduce the cost of the packaging itself!
Reduce Your Packaging Costs Today!
If you would like to identify the most effective ways to reduce the cost of packaging for your specific operation, then our team is here to offer personalized recommendations. Contact us at Gertex Solutions to learn about the various types of packaging materials that are offered. We can also help with in-house packing automation if it makes sense for your business. Contact us to schedule a free assessment.