Nickels & Dimes: 5 Tips for Cutting Your Packaging CostsTuesday, September 20, 2016
A little business savvy, mindful ordering practices, and some forward thinking may very well provide the jump-start you need to take your business to the next level. Let’s break it down in a way that makes sense and, most importantly, in a way that will save YOU some cents.
While some may say packaging costs a pretty penny, we have five tips for you that will save your money over time.
Tip # 1: Consider Flexible PackagingEvery product requires a package. We rely on packaging to provide necessary labeling and protect the products that we use. Unless you are personally delivering your product directly into the hands of your customers, your product needs packaging. You could use a box, a bag or perhaps even a glass jar to package your product. The question is which of these options will help save you money?
A product like bath salts, for example, could be packaged in a glass jar or in a clear stand-up pouch. The stand-up pouch option offers some clear advantages.
The lightweight material of the stand-up pouch material weighs less and, thus, costs less to ship. A stand-up pouch made from quality material offers a durable, puncture-resistant option that protects your product so that it may arrive safely into the hands of your customers.
The material of the stand-up pouch readily conforms to the shape of the bath salts so this product is easier to store. It takes up less space in your warehouse and on a retailer’s shelf allowing more products for your customers to buy.
A stand-up pouch offers great shelf appeal as well. Customers often choose a product based on how a package looks and feels. A clear stand-up pouch showcases your product, inviting customers to see the color and consistency of the bath salts before they buy it. There is plenty of available space on the package for your company branding to draw in customers. Flexible packaging packs your product with an emotional punch that is a win-win for you and your customers.
Tip #2: Take Advantage of Price Breaks with Bulk OrderingWhile flexible packaging has clear benefits, buying in bulk is another way to save on your packaging costs. For example, maybe what you need is 800 plastic bags for your product, so you play it safe and order exactly 800 bags. That’s what you need after all. Consider ordering a little more to get a much-deserved price break. Let’s look at this example with one of our flap seal bags (B75). The breakdown for pricing is as follows:
Tip #3: Try the One-Bag-Fits-All ApproachOrdering stock bags in larger quantities guarantees price breaks. Another trick to saving money is to use one size of a stock bag to fit multiple products.
Say, for example, your business is cookies. You may have multiple types of cookies with similar sizes that require separate packaging. Ordering one bag size in a larger volume will reduce the number of SKUs and, consequently, give you price breaks. Ordering more bags does not guarantee price breaks when you have multiple SKUs. The key to getting those price breaks is to place an order with fewer SKUs.
Limiting your bag to one size will also reduce your printing costs (if you are printing) as well since each packaging size requires separate upfront, set-up and design costs. When your business really takes off and you can afford more elaborate designs, go for it. In the meantime, a focused approach with less packaging options is one solution for saving those nickels and dimes.
Tip #4: Start with LabelsA label can help distinguish your product branding and is a special part of packaging. You may already print you own sticker labeling from your home office or perhaps you haven’t even contemplated using them for your product. If you are experiencing an increase in volume of orders, outsourcing the printing and design of a label may be an opportunity for you to take your product to the next level with a more polished look.
Investing your resources in packaging may entice new customers you didn’t know existed. What kind of finishing will you choose? Matte, gloss or metallic? What about a fancy holographic image? Many websites offer design services at reasonable rates where you can obtain a professional look for a smidgen of the cost of a full-fledged creative service.
You can minimize your design costs by limiting the number of colors in the design. While this is important, you may also want to weigh the value of capturing the true essence of your brand and what it represents going forward.
A great way to trim your labeling costs is to start with a single-sided label. While food products require specific, nutritional labeling, a single-sided label can work for other products. Stationery and photography come to mind.
In time and with increased volume, you may consider double-sided labels and employ a service to apply the labels to your product(s).
Just think, not too long ago, you were doing all the work of designing, printing, and applying labels. Now your product looks more polished and you have more time to spend on other areas of your business. Outsourcing the printing of your labels may be just the ticket for jump-starting your business and enticing new customers.
Tip #5: Move to Custom Printing When the Time is RightYour product’s shiny new look has paid off and now your orders have increased even further. Congratulations to you for reaching this wonderful stage of your business.
As your orders have increased, managing all aspects of your product packaging may be taking more and more of your time. You may have even outsourced the application of your labels to another party so you can head-up more rewarding activity, like fulfilling more orders or growing your business on social media. But with an increased volume of orders, is this the most efficient way to package your product?
Have you convinced yourself that you can’t afford custom printed bags because your volume is too low to justify it? Well, think again. In fact, dream again and dream bigger. It may happen a lot sooner than you think! Custom printing makes it possible for you to enjoy a professional look at an affordable price.
If you are ordering quantities between 5,000-10,000 pieces, the time may be right for custom printing. With increased outputs and better technology, custom printing is within reach for small business owners now more than ever. Custom printing requires that you pay plate fees. However, provided that you do not change your bag size and print-ready art, this is only a one-time startup fee. Your plate fee costs are determined according to the number of colors you choose. So, limiting your design to fewer colors will help save money.
Let’s now look at an example. Consider a 5” x 7” laminated heat seal bag:
Don’t forget about the one-time printing plate fees. A 4-color printing process costs an additional $260 (@ $65/color).
Now, as you increase quantities, you spread that cost out over multiple bags. It looks like this:
As you can see, spreading that cost over larger quantities is better. It keeps the added cost per bag down to pennies, rather than almost doubling your cost.
The question you must ask yourself is how will your costs for custom printing compare to the costs of stock packaging, labels, labor and production and, of course, your time? You might find that if you weigh all these factors together, custom printing is more cost-efficient for your business.
Gone are the associate printing and labor costs from labeling. When your packaging arrives at your doorstep, it’s ready to be filled and shipped to your customers. Your product will hit the shelves ready to rock and roll.
Whether you are putting your product onto retail shelves or shipping it directly to your customers’ homes, how your product is packaged is an important piece of your business and marketing dollars.
Packaging that maximizes a product’s value and visual appeal, while minimizing shipping, transportation, and storage is a winning combination. Striking this balance is easier said than done. As you can see, there are many factors involved when it comes to your packaging requirements from the material you choose to use to inventory and printing costs.
Packaging can be the difference between standing still and moving forward. Just think, how much these nickels and dimes add up to. All of these tips may not apply to your business right now, but we hope something here will help you gain a cost-cutting edge!