Investing in your business is always a wise decision. But that doesn’t mean you should not look for a way to reduce operational costs. One of the things that can make your finances stable is packaging cost reduction. But, it seems that most entrepreneurs are unaware of the factors influencing the packaging price. Plus, they do not know how to take advantage of the issues they are dealing with.
That’s why our team has prepared an educational blog where you can find ways to increase your packaging cost savings. Let’s start with analyses!
5 Main Factors Impacting Packaging Costs
Before everything, entrepreneurs must understand all the factors impacting packaging costs. Based on our experience and knowledge, we have concluded there are 5 main factors you need to have in mind.
Material Costs
Entrepreneurs want to ensure the packaging looks nice and protects the product adequately. Packaging matters to a huge number of consumers in the United States. Because of that, we will never suggest people save money on this powerful marketing and branding tool.
Yet, that doesn’t mean you need to spend a fortune on achieving these two goals. You need to consider the best alternatives that can cost you a cheaper. There is also an option to collaborate with manufacturers that will reduce the price of each package for bigger orders.
Design and Customization
All businesses strive to reach a higher level of uniqueness. The purpose of the packaging is to grab the attention of the consumers. Also, it aims to make your brand different from the mass of other competitors and boost the value of your company/brand. Yet, we must not neglect that design and packaging customization can sometimes cost a lot. Because of that, you should check out if there is a way to minimize the costs or use a different type of ink for printing. Ultimately, you can always change the partner for customization and find a cheaper alternative.
Demand and Consumer Behavior
Without any doubt, you can’t influence consumer behavior and demand. Your obligation is to meet their expectations related to packaging. Yet, that doesn’t mean you can’t educate them through innovative ideas. They maybe aren’t aware of all the options they can get. That’s why you should experiment with different designs that may help you achieve packaging cost reduction. Of course, you should always have their feedback in mind.
Shipping and Handling
Believe it or not, nearly 30% of products sold online are returned to the seller. One of the main reasons is damage that occurred during the transportation process. Also, many products get damaged because of bad methods of handling. In the end, shipping is becoming more and more expensive due to gas price increments. Entrepreneurs usually decide on the most expensive materials to solve this problem. Unfortunately, that does not always bring the best results.
Sustainability and Environmental Factors
People have become aware of the issues single-use plastic and similar materials cause. That is the reason why most entrepreneurs slowly switch to eco-friendly alternatives. We do respect such a change. Yet, eco-friendly materials, as well as their production, can be costly. That especially counts for entrepreneurs that are not too familiar with sustainable materials. There is always a cheaper yet better alternative!
How To Reduce Packaging Costs: 11 Simple Steps
We did share some short tips in the previous part of the text. Yet, packaging cost reduction requires more action. There are 11 ways to boost your packaging cost savings. Don’t worry; they are not complex but require a certain dose of energy and time. Let’s find them out!
1. Switch To Eco-Friendly Materials
Undoubtedly, eco-friendly materials can be more expensive. Yet, in the long term, they can actually help you reduce packaging costs. They are durable, reusable, and excellent protection for the product. Apart from that, they will ensure you a better profit. More than 80% of people require sustainable packages. With the traditional options, you may lose the trust of many consumers.
2. Reduce The Package Size
Eco-friendly materials are easily customizable. You can change the design and shape of the packages and reduce the packaging costs. The entire procedure will automatically require less usage of materials. Also, you will manage to put more packages into one track. That way, your shipping costs are dropping as well.
3. Use Different Packaging Materials
No one says you must always stick to the same sustainable packaging materials. You can experiment with things to see what suits your target audience the most. Some materials are cheaper than others which is a factor you must consider. Yet, as we said, packaging has the capacity to improve the value of the product. Sometimes, you may not ensure packaging price reduction, but you can improve your profit margins.
4. Order Bigger Quantities
Let’s say you found a perfect sustainable alternative. However, the price of one package isn’t lower than the one you used before. One of the methods you can use is to order larger quantities. Packaging manufacturers are flexible and always lower the price in those cases.
5. Automate The Packaging Process
This method will first require larger investments. Yet, in the long run, you may establish a significant packaging cost reduction. Automating the packaging procedure will help you spend less time developing every package. Also, you will reduce your carbon footprint, which will reduce taxes. In the end, the number of mistakes you make to create each package will be reduced to a minimum.
6. Control The Product Packaging Before Shipping
You may need to hire someone to control the packages before they get shipped. Yet, these employees are going to significantly reduce packaging costs. First, you will easily notice which things must be improved to strengthen custom packaging. You may need to change the materials completely. Also, you can easily predict which products can easily be damaged, which will reduce the return rate. You can use custom shipper boxes to ensure the safety of the package!
7. Follow The Latest Industry Innovations
You must be a person that follows the latest industry innovations. Regular market analyses may give you ideas on how to reduce packaging costs. You can use the methods your direct competitors are using. Also, you can analyze the effectiveness of their packaging designs and customizations. We do not suggest you copy someone’s ideas. But, they can be an inspiration for later use for packaging cost reduction.
8. Train Your Staff
Automizing the packaging procedure or using the latest innovations won’t be successful if your staff isn’t well-trained. It will take time and patience to improve the skills of your employees. Do not forget the importance of motivation. They must understand the importance of what they are doing and how it can benefit the entire team.
9. Avoid Multiple Colors
Entrepreneurs often make a common mistake when choosing the colors of their packaging. You won’t make the package visually appealing if there are a lot of colors on it. If you overdo it, your boxes will sometimes look silly or ridiculous. But that’s not the main reason why we say that. More colors results in larger investments. That certainly won’t help you reach the packaging cost reduction.
So, let’s make a conclusion together. With multiple colors, you may ruin the design of the package, and you will spend more money. So, why would you do that?
10. Reduce the Number of Layers
For those who do not know, every custom packaging has three different types of layers. They are - outer, inner, and product packaging. Sometimes, these layers are combined. Businesses do not have to use all three of them always. Sometimes, the packaging can keep quality even if there is just one layer of protection. That will automatically reduce the cost of each package and speed up the production process.
11. Collaborate with Arka
Instead of wasting energy, nerves, and money on packaging cost reduction, it would be better to work with customized providers. Arka is there to help reduce the price of each package and help you reach long-term goals! We offer top-notch custom packaging solutions for any niche; for example, you can check out our custom gift boxes or soap boxes!
We are experienced branding and packaging manufacturers focused only on eco-friendly materials. Our team uses the latest technology and equipment to create each ordered package. We understand that people want to reduce the price of each custom box. That’s why we strive to give the best price for larger quantities. The minimum order we accept is 10 packages!
All your design and customization ideas can turn into reality! Contact us and let us help improve your packaging cost savings.
Final Thoughts
There are two options in front of you to ensure a packaging cost reduction. One option is to take care of everything on your own. All the tips we shared will help you reach your goal. Primarily, you need to find the most adequate materials for your packages. But, their price does not have to be always high. Automatization of the process and better design ideas can also reduce your costs.
The second option is to collaborate with Arka and let us take care of everything. Our practices won’t only reduce package expenses. They will also help you boost your brand value and ensure a better profit. Let’s collaborate today!
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