Ways to Reduce Packaging Costs

The total packaging cost of this amount of product is immense.

The cost of packaging is a major burden for many companies, regardless of the company's size. Whether the packaging is as simple as wrapping a widget in bubble wrap and shoving it in a cardboard box or something as ornate as a custom designed, form-fitting, colorful plastic container for electronic equipment, the cost of labeling, ink, inner securing materials, and both box and design all add up to a large amount when multiplied by the units sold.

Steps

1.

    Study the packaging requirements of the product and compare them to the packaging materials being used currently. Evaluate whether the grade of the boxes or plastic used is of a heavier duty than the product needs--switching from an unnecessary triple wall, highly rated box to a much cheaper single wall non-test grade of cardboard can save a company thousands of dollars in the long run. Eliminate unnecessary layers or labels from the package.

2.

Make sure the boxes are sized correctly. An all-around void or space of about 2 inches between the product and the outer box is all that is needed for many items. Switch to a smaller box if there is more than 2 inches of "dead space" in the current packaging.

3.

Choose inner securing materials, such as bubble wrap or foam, as close to the final needed size as possible to reduce the waste and labor costs associated with cutting the material to size. Larger items require larger squares of bubble wrap than small computer components.

4.

Shop around. Contact several different suppliers and request quotes for every aspect of the packaging, including several labeling or ink suppliers. Ask for samples or a tour of the facility. Compare the quotes and lead times from the different suppliers and choose a cheaper, yet reliable vendor.

5.

Buy in bulk if demand is great enough. Ask suppliers if they provide a bulk discount, or switch to one that does.

6.

Reduce labor costs. Automate parts of the process or hire cheaper workers if specialized requirements are not needed for the packaging process. Improve the layout of the packaging area to avoid wasted motion. Investigate whether outsourcing to a packaging specialist would be cheaper than internal packaging.