As a small business owner, you continually look for ways to reduce expenses and save money within your company. But it’s never a good idea to reduce costs on packaging quality and integrity. If your products arrive at the customer’s location in a broken or damaged condition, that can impact your reputation in a big way. Today, customers are quick with posting reviews online and one unhappy or displeased customer can significantly impact the perception that other existing or prospective customers will have.
Even if your products are insured, courier companies won’t pay out claims for products that are deemed to have insufficient packaging. In many ways this becomes a catch-22 situation for companies, as they can’t figure out how they can cut packaging costs without impacting quality and product safety. Here are some cost-effective ways to package your products right:
#1 Ascertain what the true cost of your inventory is
In order to determine this, aside from the cost of the stock itself, you’d have to take into account the handling, holding (cost of renting storage or warehousing facilities), business rates and other costs. In most cases, packaging can be the main aspect when it comes to keeping these costs down, and most often the simplest solution as well. Some questions you should be asking yourself include:
- Do I really need double/triple wall cardboard boxes for my products, or will single boxes do the same job well?
- Would it be possible for me to utilize primary packaging for smaller individual products?
When you are shipping our multi-piece assignments, consider palletising; this is because the pallet cost may be significantly lower than multiple boxes. You also need to optimise palletisation as the shipping cost will be affected by:
- The number of pallets dispatched
- Whether they are modular and stackable
- The amount of space required to stock and transport them
- Whether a tail lift is required or hand balling would work while shifting them
#2 Incorporate technology in daily operations for soft savings
Keeping track of all your orders necessitates the use of reliable and effective technology. Using the right type of technology and inventory management software, decreases your workload and facilitates much better customer service. Look for suitable multi-carrier shipping software to quickly compare parcel delivery costs with various pallet network specialists. While this isn’t direct savings on packaging, it’s a soft saving with relation to process and your warehouse staff’s time.
#3 Make sure your staff and team understand your inventory
This may seem pretty obvious; however, making sure that all the employees and staff members are well-informed, is important as it helps avoid costly mistakes related to products’ packaging. Your employees should be given the commercial breakdown with reference to how breakages impact the profitability of your business. Good and dedicated employees will always work extra hard to make sure the products arrive undamaged and on time.
#4 Make sure your supply chain partners are in sync with your objectives
Your strategy must include your supply chain partners as well; this is because the business practices they follow have an impact on your company’s inventory management and in getting all your products from point A to point B. If you use only one partner for your delivery and collection needs, that will considerably improve your accounting and warehousing processes (booking, tracking and retrieving PODs etc.).
Make sure you use strong boxes and adequate protective packaging. Consider investing in foam-lined boxes. Though they cost more than standard boxes, they are often lighter and smaller, which means you end up saving significant amounts of money on delivery costs annually.
For effective and sustainable cost reduction solutions & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 02 9525 0777. If you prefer, write to us at this email address, and we will revert quickly.
Thanks for reading,
Benchmark Cost Solutions Team
02 9525 0777