The packaging industry has grown significantly recently in line with the growth of e-commerce. Online retailers and wholesalers are beginning to understand that effective product packaging is just as critical as any other aspect of their business, and they are investing in different ways to optimize their logistics management procedures.
Today, one of the primary pain points of logistics management is finding the most cost-effective option. Companies are regularly shifting from one carrier to another, hoping to maximize their savings in packaging. However, not many look into how to redesign packaging procedures to make the process more pocket-friendly effectively.
This blog post will look into how you can take advantage of innovations and implement small changes that will completely revamp your packaging processes and help you save money.
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The Importance of Reducing Packaging Costs
As a business, your primary objective is profit maximization. Every company invests in strategies and ideas that can help them stay cash flow positive and optimize their profits.
When it comes to maximizing profits, e-commerce businesses tend to look into how to sell more. So, they focus on things like investing in marketing and ads to bolster their ability to make sales. However, profit maximization can also come in the form of cost reductions, and this is where reducing packaging expenses can come in handy.
By finding the right packaging solutions for your products, you can run a leaner and more profitable operation. You get to eliminate empty space and void fill, all of which tend to add to your total cost over time.
Interestingly, achieving cost-effective solutions when it comes to packaging usually just depends on some small changes you make over time. You can change your packaging components to better fit the products you’re shipping, look into custom insert packaging, and much more. It might just be about reducing packaging space by one millimeter. These changes might seem insignificant, but you will find that they have more impressive effects on your bottom line over time.
At the same time, you should also keep the quality component in mind. While you will like to save as much money as possible on your packaging and product shipping, you still need to show professionalism and represent your brand in a positive light. Ensure to always go for better quality in packaging components and products, and don’t settle for low-end packaging tools just because they’re cheaper.
Remember that your packaging is the first thing your customers will see. They say first impressions last longer, and this is especially vital for e-commerce businesses. You want to build a good first impression when dealing with clients, and better quality in packaging components is a great way to do that.
5 Ways to Reduce Packaging Costs
1. Understand the Factors that Rise Your Packaging Costs
Perhaps the most critical task in this sequence will be identifying the factors that cause increasing packaging costs. These are usually redundancies and lags that increase your costs and get in the way of a seamless, cost-effective packaging operation. They might be small changes you forgot to implement or a wide array of factors coming together to drag you back.
Generally, some of the most famous factors that contribute to increased packaging expenses include:
- Defective designs in storage materials and packaging lines
- Unnecessarily long packaging lead times
- Making payments based on box dimensions – not the product’s dimensions
- Low-quality packaging materials that leave the opportunity for damage
- A failure to optimize your packaging processes
- Overly expensive shipping
Remember that your overall packaging costs could rise due to just one of these factors or a combination of them. Since they all vary in complexity, you want to take a while to understand what is responsible for these cost hikes. Once you and your team have a clear picture of what might be going on, the next step will be to figure out ways to address them and reduce your packaging expenses.
You should also know that some of these factors tend to lead to others. For instance, a failure to optimize your packaging could come from inefficient manufacturing and packaging models. So, while you have two factors, it’s really just one causing the other. To address these issues effectively, you will need to adopt a holistic approach to packaging innovation and find how best to cut your costs.
2. Improve Your Storage and Packaging Lines
This step is especially critical for growing e-commerce companies. As your operations expand, you will find that the number of packaging materials you use will also increase. You can find different types of packaging materials, from cardboard and seal to plastic and paper bags. Each of these will have its specific application.
To make the right choice, one of the first things you will need to do is to consider your warehouse space and its layout. Look into your packing items’ organized nature and consider ways to streamline the setup to optimize your packaging process.
If you find lags and would like to improve your packaging operations, consider these steps:
- Look into your current production line and the products’ placement
- Get similar items and group them together
- Identify packaging materials that get used rarely and palace them in the same location
The point here is to reduce packaging lines in the warehouse space and organize your products’ placement. This way, you can reduce labor costs and packaging times by cutting out all unnecessary movement. You get to speed the packaging process up and optimize your processes significantly.
This step also helps you to reduce the amount of warehouse space used. Over time, it drags down costs like heating and lighting, providing good cost savings.
3. Ensure Proper Packaging and Transportation
No business ever wants to deal with product damage. When a customer reports that a product is damaged and they will need to return it, you will need to cover the return costs and probably have to send a different product back to them. There is also the possibility of defective products hurting your image in the customer’s views and reducing their chances of coming back to you in the future. If they share their negative experience with their friends and family, your brand reputation has taken an extra hit.
When it comes to product damage, two main culprits are transit issues and insufficient packaging. You can easily address poor packaging by incorporating bubble wrap and other safety measures that protect the product, and you could also ensure that there are no empty spaces in the package that leave room for the product to move and possibly suffer damage. A void filler will also help to reduce empty space and leave no room for products to collide or vibrate.
As for transit damage, solving it is a tad trickier. Some common causes of damage while en route to a product’s destination include:
- Sudden impact or continued vibration during transit
- Wear and tear due to repetitive transportation and handling
- Poor load stability, caused by improver stacking
It’s difficult to avoid issues like prolonged vibration, especially if the product moves to its destination by road. In these cases, durable packaging and stuffing materials like bubble wrap will help keep your products safe. As for poor load stability, this isn’t your fault. You want to ensure that your carrier isn’t detrimentally stacking your products or causing damage to your products over time.
4. Use Automation to Cut Packing Times
We live in a world where automation has essentially changed the way we do everything. The packaging industry has also seen some benefits of digital and automated innovation.
In most packaging operations, much labor and time go towards mundane tasks such as the following:
- Carton assembly and security
- The construction of corrugated cardboard
- Placing stuffing materials and dividers
- Box taping and security
Taping and sealing are incredibly time-consuming as you have to deal with overly high stakes. Since you don’t want to suffer any product damage, you want to ensure that everything is properly taped and salad. The problem, however, is that the process takes a lot of time.
Sometimes, this problem is due to old and defective sealing equipment or manual packaging processes. Sealing machines could be old and could suffer from component defects, tape jams, and much more that can easily weigh on your workflow. Over time, you will find that all of this can slow your team down and lead to workers doing repetitive tasks. Your checking and inspection processes will also rely on more manual work, costing you more time.
Thankfully, you don’t have to suffer from this problem for so long. Thanks to new technologies, you can improve your packaging processes and make good time. With an automated packaging line, you can enjoy a wide variety of benefits. These include:
- Higher output: With automation, you can speed up your packaging process and improve your profitability. With reduced labor costs, you can also improve your bottom line.
- Improve environmental sustainability: Manual sealing produces a great deal of waste. With automation, you get to use the precise amount of material you need and minimize your carbon footprint.
- Reduce injuries: Another cost-effective advantage of automation is that it helps you cut out injuries. So, workplace injury claims, insurance payments, and more won’t be concerns for you.
- Reduce damage: Automation can also cut out product damage. Thanks to increased precision, you get perfectly secured and packaged products. So, your products look better, and the likelihood of damage is reduced. You also deal with fewer return claims and won’t have to pay for any refunds. So, you can run a more cost-effective operation.
5. Use Custom-Sized Packaging
One of the primary issues you will face as a growing company is the problem of quickly sourcing packaging. Many businesses tend to opt for standard boxes since those are cheap and easy to get. However, while standard packages could work initially, they’re not financially viable over time.
With oversized packaging, you take up more warehouse space. You also take up additional empty space in delivery, leading you to ship just air in some instances. This isn’t such a cost-effective option if you consider it. You want to ensure that your product’s primary packaging is custom and as space-saving as possible.
Instead, you could get a box specifically designed for your product. With custom insert packaging, you get a package that “hugs” your product. Thus, you cut out void fill and reduce your product’s dimensional weight when shipping.
Custom insert packaging means little or no need for void fill, thus reducing the time and overall packaging costs you have to deal with when you have empty space around.
You can also use custom packaging as an ideal branding opportunity. Digital printing will help you to brand your packaging easily. It is much faster than conventional printing, and it helps you to develop a better relationship with your customers.
Sell on Alibaba.com
If you’re an e-commerce seller and you’re looking to optimize your sales, there’s hardly anywhere else that can help you other than Alibaba.com.
Alibaba.com is currently the largest marketplace for B2B businesses on the internet today. With millions of buyers and products, the marketplace connects different parties to a transaction and ensures that you can make seamless deals in little to no time. With Alibaba, you can sell products in bulk and connect to customers across the world.
Alibaba.com is also great because it provides a wide array of packaging options that can help you save costs. The service allows you to use your custom packaging while shipping, and you can also take advantage of the innovative options available on the platform. As expected, Alibaba also connects you to different carriers like FedEx and more to help you get products from your location to any preferred destination.
If you need a platform that helps with optimal logistics management, Alibaba.com should be your call.