How to Reduce the Cost of Packaging

Packaging can be expensive; if you want to increase your profits, one solution is to alter your packaging to reduce costs. However, this needs to be done carefully to prevent products from becoming damaged or customers from changing their opinion of your brand. We take a look at some simple but effective ways to reduce the cost of packaging.

Accurate forecasting

If your business pays for packaging storage from a warehouse, you’re likely to pay for the amount of storage you need. Many companies don’t accurately forecast their sales and requirements, leading to excess packaging and paying for storage they don’t need. In addition, if you have excess packaging that spends a long time in a warehouse facility, it’s more likely to get damaged and become unusable. This again will increase your costs as you will need to pay to replace any lost or damaged packaging. Accurate forecasting can help to reduce your overall packaging costs.

Look for alternative suppliers

If you’ve been with your current supplier of packaging for a long time, it might be time to shop around for a better deal. Suppliers will all have different costs, availability of packaging and discount rates. For large orders, you should receive a bulk buying discount. Reviewing your packaging supplier might be a bit of a hassle, but it could save your business money, and you may even end up with better-quality packaging at the same time.

Packaging quality

Double-walled and triple-walled boxes are more sturdy, durable and better at protecting your products. However, they’re also more expensive than single-walled boxes. For many items, single-walled cardboard boxes will work well enough to keep the items safe and protected. If you want to reduce the cost of packaging, it might be worth experimenting with an inferior-quality box. Test out your items in several different cheaper packaging options to see if you can get away with paying less.

Charge for gift boxes

Many companies charge their customers more money for premium packaging; this could include gift wrapping and gift boxes. Customers are often happy to pay more for a gift box; they’re more convenient and attractive. Businesses can even make money from charging more than it costs them to provide this premium packaging option. The additional cost they make here will offset the costs of the standard or free packaging option. Companies will also save because they will use less standard packaging when customers opt for the paid gift box.

Size of packaging

Common mistake companies make is providing boxes far too large for their items. This results in additional costs of storage, the cost of larger boxes and the cost of filling the void space in the packaging with packing materials. Boxes should be designed, so they’re as small as possible for the product and items being shipped; this will help to reduce the cost and minimise the storage needed. In addition, packing pellets and other void fillers might not be required if the box fits well around the product or item.

Branding on packaging

Adding your brand logo to the outside of your packaging can be beneficial for brand awareness and the consumer experience, but removing this is an easy way to cut your costs. Send out products in plain cardboard boxes instead of branded boxes for an easy and quick way to cut your packaging costs.

Labour costs and automation

It can be expensive to employ members of staff to box and prepare items before shipping. Some companies will be able to reduce these costs by investing in machinery that can perform packaging tasks more quickly and efficiently. The initial cost of the machine will need to be accounted for, but in the long term, it could help to save the business money and improve efficiency.

These are a few ways you can cut the cost of packaging in your business. The first step is auditing your current packaging cost and identifying any areas where you can make simple, quick changes to cut costs. Any change to the packaging should be carefully monitored; you want to ensure that the change hasn’t negatively affected your sales or increased the number of items damaged in transit.