If you are in the business of manufacturing, one of the most important aspects of your distribution cycle is packaging your product. In fact, a recent study shows that packaging plays a key role in the purchasing decisions of 72% of American consumers, and other one shows that 61% of consumers say they are much more likely to become repeat purchasers of a product that comes in premium packaging.
Most successful companies don’t look at packaging as a cost, but rather an opportunity. Packaging is likely the first interaction that a consumer has with your product, and you want to ensure that this is a positive experience. In this article we discuss how your business can benefit from using a third-party packaging company, and why it’s so important for many industries.
Whether you’re manufacturing software CDs, homemade cookies or distributing herbs and spices, packaging can be a major concern from a cost and distribution aspect. Not only do you have to decide what the packaging is going to look like, but you have to take into consideration what it takes to package your product. Two main factors will definitely come into play here: cost and control. Let’s look at the former first.
Cost considerations generally go like this: How much will packaging supplies cost, how much does the equipment cost to package your product and how much will the labor cost to package your product?
If you plan to package the product yourself, your company will bear the total cost of all of these aspects. You’ll have to purchase equipment needed to package numerous products, as well as buying the necessary supplies, and supplying all of the needed labor. Depending on the product, equipment alone can be prohibitively expensive. Once you start to factor in the remaining monetary costs and time expended, it may push you well over your budget.
However, a dedicated packaging company will have the necessary equipment on hand, and can get extensive discounts on equipment. (Buying in bulk really does pay off.) Moreover, labor costs will be reduced as dedicated packaging companies can split labor costs across multiple jobs. Considering the mere volume of work done by a packaging company, the cost passed along to you is far less than if you were to do the work in-house.
Control Over the Process
Secondly, control can be a challenge either way you go. If you do your own packaging, you keep complete control over the packaging design, graphics, etc. However, most packaging companies are more than willing to work with a company to achieve the packaging design they want. This means that, even though you may not have total control over the packaging designs, you will have significant input. The control the packaging company keeps is typically only affected by the packaging process limitations.
If you own a large company that manufactures millions of products a year, an in-house packaging department likely makes fiscal sense. However, if you run a smaller shop, the benefits a dedicated packaging company can provide are well worth the extra cost. Not only will you end up staying within a budget, but you will also save time, hassles and surprises.