9 Ways to Reduce Packaging Costs and Increase Profit

In this comprehensive guide, you will learn effective strategies to significantly reduce your packaging costs without compromising the quality or integrity of your products. You&#;ll gain insight into cost-saving measures from improving materials storage and automating packing time to optimizing your packaging operations model and staying updated on industry innovations.

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Key Takeaways:

• Warehouse Optimization and Automation: Improving your warehouse layout and automating packaging processes can significantly cut labor costs and increase productivity, while reducing waste and the risk of workplace injuries.
• Smart Shipping Practices: Implementing dimensional pricing strategies and ensuring proper packaging can minimize shipping costs and product returns, leading to improved customer satisfaction.
• Adapting Industry Innovations and JIT Model: Staying updated with packaging industry trends and adopting a Just-In-Time (JIT) approach can lead to more efficient use of resources, potential cost savings, and improvement of packaging quality.
• Strategic Packaging Design and Allocation: By redesigning for optimal space use, testing new packing materials in small quantities, and varying packaging costs based on product durability, resources can be allocated effectively without compromising product safety or branding.

There&#;s a saying that, &#;The packaging sells the product the first time, but what&#;s inside sells the product a second time&#;. Business owners can reduce packaging costs while maintaining the integrity and brand identity of their products. Packaging solutions and strategies exist to reduce the amount of time and money that goes into the packaging process.

So what does this mean? In the long run, businesses spend a fortune filling boxes with bubble wrap to protect goods. They also spend money on package design to build their brand and create memorable &#;unboxing&#; experiences for customers.

Food for thought: waste in your product packaging turns into waste elsewhere. Fast Company estimates that around 165 million packages are shipped each year. The world is already struggling with its waste and recycling issues.

BONUS: Before you read further, download our Warehouse Management Software Whitepaper to see how Logiwa uses real-time data to help you get up to 100% inventory accuracy.

What Factors Contribute to Higher Packing Costs?

Materials costs aren&#;t the only contributing factor to packaging expenses. In fact, there are several factors that increase packing costs.

• Poorly designed materials storage and packing lines
• Long packing process times
• Paying for box dimensions rather than product dimensions
• Ineffective packing materials that allow damage
• Inefficient manufacturing models
• Failing to optimize packing
• Expensive shipping costs

By taking a holistic approach to cost savings, your business will identify ways to improve the packaging process without compromising on quality.

1. Improving Materials Storage and Packaging Lines

As your business grows, it&#;s natural that the number of packaging materials you use will increase too. There is a wide variety of packaging materials available and variations within each category.

• Corrugated

• Plastic film
• Stretch foil
• Shrink foil

• Zip/zipper
• Snap-fastening
• Adhesive closure
• Drawstring
• Isothermal pockets
• Foam sachets

• Bleached kraft
• Crepe paper
• Natron kraft
• Grey paper
• Brown paper
• Oil paper
• Courant paper

• Foam-in bag
• Filled air
• Styrofoam
• Foam chips/peanuts
• Wood wool/excelsior
• Paper wool
• Paper fiber/fiber board
• Silica gel grains
• Bubble wrap
• Foam foil

Consider the layout of your warehouse. Are packing items stored in an organized fashion? Is there a way to streamline your layout and speed up your overall packaging process? If you&#;d like to improve your existing operations, try the following steps:

1. Analyze your current inventory of product packing
2. Identify similar items that could be grouped together
3. Identify infrequently used packing materials and group them together

You want to reduce several packing lines into a few, highly optimized packing lines. Rather than a dispersed, decentralized process, your facility will reduce labor costs by minimizing waste movement and accomplish more by speeding up the packaging process.

You&#;ll also reduce costs by minimizing the amount of warehouse space you use and the costs associated with it, such as lighting and heating.

2. Reduce the Amount of Packing Time with Automation

Will cutting your unit costs drastically compromise your packaging quality? The good news is that there is another effective method for reducing costs: boosting productivity by cutting down on packing times.

Your workforce could be spending valuable time on the following, time-consuming tasks in the packaging process:

• Constructing corrugated cardboard
• Assembling and securing cartons
• Inserting dividers or stuffing materials
• Taping and securing boxes

In fact, one of the most time-consuming steps of the packaging process is taping and sealing, likely because the stakes are rather high. A poorly sealed product has a higher chance of damage or spoilage.

Oftentimes, long sealing times are due to old, malfunctioning sealing equipment or a highly manual packaging line.

Do your machines regularly break down, costing your team time?

Similarly, do your sealing machines often malfunction, leading to tape jams or miscuts that slow down your entire workflow?

Such an environment slows down your team, leads to redundant work, and increases the number of manual inspections your workers must perform.

On the other hand, malfunctioning machinery may not be your problem because you don&#;t have machines to malfunction in the first place. You may be using manual packing processes that could easily be automated.

An automated packaging line will improve your operations in the following ways:

• Increased output: Automation speeds up your picking and packaging process, making your business more profitable.
• Reduce your carbon footprint: Manual sealing produces ample waste. An automated machine only uses the exact amount of material needed.
• Reduce workplace injuries: Automation reduces the likelihood of repetitive strain injuries, minimizing the risk of absenteeism and workplace injury claims.
• Enhance your brand reputation: Machinery introduces precision, giving you perfectly packaged and secured products. So you get to present a better-looking product to your customers, and reduce the likelihood of damage.

Better Warehouse Performance = Higher Profit Margins: Logiwa syncs accurate data across your entire interface so the inventory numbers you see on your dashboard are what your employees see on their devices. Learn how Logiwa uses real-time data to help you get up to 100% inventory accuracy and double your shipments.

3. Optimize Packaging by Using Smaller Boxes

To reduce packaging costs, you&#;ll need to think about reducing shipping costs as well.

Prior to , UPS and FedEx used weight to price shipments. In theory, this made sense, but in practice, it cost these carriers money. Customers used large boxes to ship relatively small products, eating up space within a carrier&#;s truck &#; space which could have gone to another paying customer.

To remedy this, UPS and FedEx introduced dimensional pricing. This works by weighing the product to get the &#;normal weighted rate&#; and by calculating the volume to find the &#;dimensional weight&#;. The customer (you) pays the higher of the two.

When you&#;re shipping relatively small products in large boxes, you&#;re missing out on an easy cost saving opportunity. Consider the following strategies to optimize packaging and reduce shipping costs:

• Maximize packing space: Ship as many products as possible in one packing box.
• Diversify your packaging materials: Rather than using the same three box sizes, evaluate your average shipment size and ensure you have appropriate packaging that doesn&#;t cost you through the dimensional volume rate.
• Use padded envelopes: Some of your products may be small enough to go into large, padded envelopes rather than small boxes.
• Automate your process: Automated packaging solutions can quickly select the optimal box for each product based on size.
• Negotiate shipping rates: If you ship a large volume of products regularly, contact your account manager and discuss preferred pricing. Remember that everything is negotiable. Review your shipping data to understand your shipping profile before entering into negotiations with your carrier.

4. Minimize Returns by Ensuring Products are Properly Packaged and Transported

Product damage costs your business in a painful way. When a customer returns a damaged product, manufacturing, packaging, shipping, and returning it are all sunk costs. Moreover, you&#;ve jeopardized your relationship with a customer who may not buy from you again or worse, will share their negative experience with friends, family, and their online social networks.

There are two leading causes of product damage: poor packaging and transit damage. While the former is easier to address, the latter sounds difficult to manage. How can you control something that is literally outside of your warehouse space?

What Qualifies as Transit Damage?

First, understand the causes of transit damage. Oftentimes, it occurs when there&#;s a sudden impact or prolonged vibration during transportation. Sometimes, it&#;s wear and tear caused by repetitive handling and transportation which is known as storage fatigue.

Another possible transit damage cause is poor load stability. If a carrier doesn&#;t properly stack its loads or stacks its pallets too high, products can get damaged.

Some causes, like prolonged vibration, are hard to avoid. In these cases, investing in durable packaging like heavy-duty boxes or protective stuffing materials is important.

Poor load stability, while the carrier&#;s fault, is harder to prove. A recommended approach is to use multiple carriers and determine which carrier manages your highest volume of damaged and returned products.

If you identify such a carrier, you can either bring it up with your account manager or use a different, more reliable carrier altogether.

5. Rethink Your Packaging Operations Model

Manufacturers have embraced Just-in-Time (JIT) manufacturing. This model enables them to drastically reduce inventory, freeing up capital and warehouse space. Nevertheless, they use a math-based approach to calculating their needs to avoid stockouts and disappointed customers.

You can apply this model to your packaging. The packaging materials discussed earlier take up a lot of warehouse space. You may struggle to find room for the large amounts of corrugated cardboard, paper, and plastic you use to package and ship materials.

How can you adopt a Just-in-Time packing model? By employing a packaging WMS system. Better yet, work with a packaging supplier that offers this service. Instead of shipping all of your corrugated cardboard and paper orders directly to you, your provider houses these products and releases them on an as-needed basis.

You might be concerned about cutting it too close and not having the packing you need in time. If that&#;s the case, look for a supplier like Packaging Technologies Inc, who offers pre-scheduled or automated releases of packing materials based on your company&#;s historical data.

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6. Stay Tuned to Packaging Industry Innovations

Keep your ear to the ground for changes in the packaging industry. Particularly for changes related to your sector, whether it&#;s food, cosmetics, or pharmaceuticals. The packaging industry invests in research and development to design products that are more durable, lightweight, secure, and environmentally friendly.

All of these add up to cost savings. More durable packages reduce the probability of transit damage. Lightweight packaging limits the amount of space you take up in carrier trucks. Secure packaging reduces the probability of spoilage and damage. Not to mention, your brand reputation benefits from environment-friendly products.

Staying ahead of the curve also keeps you ahead of the competition. Keep an eye on the following trends in the packaging industry and assess how they could impact your business:

• Plastic alternatives such as research into fiber-based materials
• Robotics for picking, sorting, and packing
• Smart packaging which uses the internet of things to track goods in the supply chain
• 3D printing for packaging design and customization

7. Redesign to Optimize Packaging

Cutting unit costs at the expense of product safety is never a good idea. That said, sometimes product packing is costly due to style, not substance. Consider redesigning your current packaging to optimize it for space. Moreover, you can eliminate pricey add-ons like labels by printing graphics or logos directly onto the packaging.

8. Look at New Packing Products, but Buy in Small Quantities

Rather than committing to a new type of packing materials, buy a small quantity and evaluate how it holds up under different conditions. For example, you may find materials that withstand transport damage better, limiting the amount of money you lose on returns and replacing products.

On the flip side, if the materials don&#;t perform as expected, you don&#;t have a large quantity to burn through. The last thing you need is a surplus of unsuitable packing materials.

9. Vary Your Packaging Costs Based on the Durability of Goods

Not all of your products require maximum attention. Some products are more durable. Others will need to be more visually pleasing. Divide your products into the following packaging categories:

• Durable: Open crates with protective covers for debris and dirt will suffice.
  • Benchmark: Less than 2% of product cost for packaging
• Fragile: Internal components required to secure products. Packaging materials necessary to protect against movement during transit.
  • Benchmark: 3 to 7% of product cost for packaging
• Marketing Materials: These materials have higher costs because they require product design and professional printing services.
  • Benchmark: 3 to 7% of product cost for packaging
• Complex: These are the products that require complex packaging. They may have calibrated components or sensitive equipment. They require specialized, custom-made, very durable packaging.
  • Benchmark: 8 to 10% of product cost for packaging

You Can Discover Significant Savings By Reducing Packaging Costs

The journey to reduce packaging costs is a holistic process that requires thorough assessment and strategic implementation. From improving warehouse operations and automation to adopting smart shipping practices, each step taken can lead to significant savings.

Exploring packaging innovations and redesigning packaging to optimize resource use are also key strategies. Businesses have the opportunity to enhance their profitability without compromising on product integrity or branding. Ready to take your packaging strategy to the next level?

Discover the extensive benefits of Logiwa WMS. Contact us today to understand how we can help you streamline your operations and reduce packaging costs. With our effective warehouse solutions, you&#;ll be able to unlock significant cost savings and propel your business towards greater success.

If you have ever ordered bought a box of cereal, ordered something online or sent a gift to a friend or loved one, you have had to deal with packaging adhesives or some sort of product used for carton closing. Several different products are used to close and seal packages, and while there are several effective options, it is important to choose the one that is right for a specific application. Let&#;s take a closer look at some of the most common packaging adhesive options for closing cartons and boxes.

Staples

If you&#;ve ever opened a carton that had been closed with staples, you know that staples hold very well. In fact, it takes a great deal of effort to get the box open when it has been stapled shut. Staples also provide a tamper-evident seal, meaning there&#;s a reduced chance of merchandise being &#;misplaced&#; by someone along the way to its destination.

The downside to staples is that the increased effort required to open the carton can often result in the carton being destroyed. The staples can also be sharp and dangerous to the person opening the carton. However, both the carton and staples can be recycled. Staples are commonly used for closing large boxes, such as those used to ship furniture and other heavy products. They are much less common for smaller-scale packages and cartons.

Strapping

Strapping can be used to close cartons, as well as to secure cartons to a shipping pallet. There are three main types of strapping used for shipping purposes, each with its own advantages and disadvantages.

Steel Strapping

Steel straps are the strongest of the group, and they are used in situations where high strength and low stretching are required. However, steel strapping can be expensive, and many industries are moving away from it because it can also be dangerous. When cutting the straps, the tension can cause them to whip outwards. This, combined with a sharp edge from cutting, can, of course, be dangerous.

Polypropylene Strapping

Polypropylene strapping is the least expensive and most common type of strapping on the market. While polypropylene straps can be closed with buckles, the most common method is to seal the ends together with heat, actually melting the strap to itself. It does tend to stretch, and it doesn&#;t retain tension for extended periods. Polypropylene also has the potential to split. Polypropylene strapping is perfect for light-duty carton closing and the palletizing of cartons.

Polyester Strapping

Polyester offers the best strength to elongation ratio, making it the perfect replacement for steel strapping. It is the most rigid of all the strapping options and can retain tension for extended periods. These qualities make it perfect for long-term storage of items that require being kept under high tension.

Carton Sealing Tapes

Tape is possibly the most common method of sealing a carton. We&#;ve all had packages come in the mail, and what do we usually find holding the flaps closed and protecting our latest order? That&#;s right, tape. Most of us just cut the tape as fast as we can to get to the treasure inside, and we don&#;t put much thought into what kind of tape is being used.  There are, however, a few different types of packing tapes. If you need to send packages out for your business, it is important to understand the various types, so that you may choose the one that is right for you.

Acrylic Carton Sealing Tape

Acrylic tape can be used for both light-duty and heavy-duty applications. This type of tape is UV protected and has a wide temperature and humidity tolerance. Acrylic tapes also have a long life. They are available both in hand rolls for manual use and in larger rolls designed for machine use.

Hot Melt Carton Sealing Tape

Hot melt tapes are designed for durability and performance. Like acrylic tapes, they perform well in both light-duty and heavy-duty applications. Hot melt tapes come in different grades, including economy, utility and general purpose. Hot melt carton tapes are commonly used when packaging fruit due to their superior shear values. This means that they can withstand a constant pull without failing.

Printable Carton Sealing Tape

Available in either industrial or premium grade, printable carton tapes allow graphics and text to be printed clearly on the tape you use to seal your packages. These printable carton tapes are water-based acrylic tapes, and they can be applied manually or by carton-sealing machines. Premium-grade tapes feature an adhesive that is perfect for harsh environments.

Printed Carton Sealing Tape

Printed carton tape is made from paper, and you can have it customized in just about any way you can imagine. The tape itself is exceptionally durable, and it is available in different size roles to meet your specific requires.

The great thing about printed carton sealing tape is that you can have it completely customized for your business. You can have it made in colors that match your company&#;s branding, or you can have it emblazoned with your logo. Big brands like Amazon even use it to showcase specials and promotions. Because it is so highly customizable, it is just as effective as a marketing tool as a carton sealer. Printed carton sealing tape works well in a wide range of temperatures and is UV protected.

Adhesives

While not as common for use when shipping products, adhesives are also widely used for sealing cartons. They are most frequently used for sealing boxes that contain things like foods and beverages. Cereal boxes, for example, are closed using food-grade adhesives. Adhesives are also used to seal cases of soda, beer, wine, etc.

Hot melt adhesives for carton sealing work best with industrial glue guns. When using the right industrial glue gun, it is possible to dispense several pounds of hot melt per hour to seal numerous cartons quickly and efficiently.

Food Grade Adhesives

While the adhesive used to assemble and seal the box your morning cereal comes in may never come in direct contact with the product, it is still closely regulated. In fact, the FDA governs the glues used to seal things like cereal boxes, pasta packaging, etc. Even the glue used to seal up a case of soda must meet the requirements of the FDA.

The packaging adhesives used to seal cartons containing beverages and edible products are regulated under the FDA&#;s Federal Regulations Title 21 Part 175.105, which regulates indirect food additives. While there are several requirements that must be met, it is most important that the glue is non-toxic and transparent.

The Importance of Choosing the Right Product for Carton Closing

With so many different options to choose from, knowing which product is best for your specific application isn&#;t always easy. It is extremely important, however, to choose the right one. In some instances &#; like when sealing boxes that contain edible products &#; you need to use the right carton closing product to ensure that you are in compliance with the law. In other situations, though, choosing the right product ensures that the product contained within will reach its destination safely.

Tips for Good Packing

When you are preparing a carton for shipment, good packing is vital. If an item is not packed appropriately, it is likely to be damaged while in transit to its destination. While choosing the right product for carton closing is extremely important, it is only one part of the equation.

Before you can even think about sealing a carton, you need to choose the right box. Recycling boxes is good for the environment and can even save you money, but if you go this route, be sure that the box you are using doesn&#;t have any rips, tears, holes or water damage. Boxes can lose 60 percent of their structural integrity after the first shipment, so be careful when reusing boxes!

If you use new containers, use ones that are suitable for your application. Boxes with double walls (or more) are generally the best. Extra walls provide extra strength and help prevent boxes from being crushed or otherwise damaged. When placing items inside the box, wrap individual items separately. This is especially important when shipping fragile items. Use things like bubble wrap or newsprint to individually wrap items. You can also use void fillers like packing peanuts or air pillows to prevent items from banging against each other during shipment.

Make sure you use enough packing material to keep everything from moving inside the box. If you can hear items shifting around, you need to use more cushioning. Seal your box up using an appropriate carton sealing product. Then, affix one label with all of the relevant information. Your label should include the shipping address, return address and all relevant contact information. Properly labeling your shipments helps ensure that they reach their destination both promptly and safely.

Conclusion

Whether you are preparing packages for shipment or you need to seal the cartons that contain your product, choosing the right carton sealing products is vital. There are several options to choose from, and while each offers its own benefits, some options are more suitable for certain applications than others. Choosing the right one helps ensure that the products contained within your cartons or boxes are kept safe. And in certain instances, you need to use the right one to meet government regulations.

In addition to choosing the right carton sealing products, be sure to use appropriate boxes and packing materials. Figuring out everything you need to use can seem overwhelming, but taking the time to do so is extremely important.

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