Is your company spending too much on packaging? If you’re like the vast majority of retailers out there, both e-commerce and brick-and-mortar, chances are your cost-of-goods-sold is overstocked with packaging expenses.
Here’s why. In general, companies spend too much money on packaging, not too little. That’s because it’s just too easy to use a cardboard box when a more carefully designed wrapping might suffice.
This “too much” phenomenon is typical even in when it comes to shipping. In fact, Amazon is currently undergoing a massive reconfiguration of its shipping process to include more envelopes in place of boxes.
Overdoing the packaging effort is just one of dozens of “packaging mistakes” and pitfalls that can cost your organization a significant amount of money year in and year out. The best way to get a clear idea of how to deal with the challenge is to know the most common errors in this field and then examine your own process to see if you’re committing them.
What Are Packaging Mistakes?
Up front, it’s essential to get a couple of definitions straight. Among consumers, the terms “packaging” and “packing” are sometimes used as synonyms. Withing the retail industry, the words have quite different meanings. “Packaging” refers to the outer wrapping of a product that a consumer sees when it’s on a store shelf. For example, when you wander through a grocery store, the items you look at are all packaged, with the exception of produce.
But, when goods arrive at the receiving dock of the store, or when a single item arrives in an e-customer’s mailbox, it’s encased in “packing” materials, like cardboard boxes, bubble envelopes, or plastic cartons. Regardless of these differences, companies need to be aware of how their products look to customers, how easily they move through the supply chain, and how much it costs to get items to end users, namely the retail customers.
The Most Common Culprits
The following list of “packaging” mistakes includes a few points that obviously pertain more to “packing” than packaging. However, if you’re a business owner or manager who is aiming to reduce the expense of getting product to buyers, it’s vital to keep an eye on both categories of cost.
Here are the top-10 product packaging mistakes that can bleed money from your bottom line:
- One: Ignoring the E-Commerce Factor Companies that do a lot of their business via e-commerce need to rethink their packaging strategies. That’s because when consumers order products online, there’s no longer a need to “reel them in” via attractive packaging. When a retailers ships something like a personal razor to an e-customer, standard packaging is not necessary.
What is appropriate in a brick-and-mortar location, where packaging is a key part of the marketing effort, is not even a factor in e-commerce. For that reason alone, sellers need to be cognizant of the fact that packaging for e-commerce and physical retail sales are totally different.
- Two: Not Adapting Package Sizes for Different Products It might seem like a no-brainer to use a one-size-fits-all packaging solution, but that kind of thinking can cut into your bottom line. The initial cost of choosing several package sizes might be off-putting, but in the end you will save money by not using too much material for smaller items.
- Three: Not Automating A simple automation solution can chop a huge chunk from your packaging expense due to the amount of time saved.
- Four: Not Using Package Space The empty space on the outside of product packages is often the first thing consumers see. Use the area to tell your story, extend your brand, or simply include a company logo.
- Five: Not Testing Test your packages to make sure they won’t infuriate buyers by being too hard to open. Sure, sturdy wrappings can look great and protect your product, but if it takes the buyer 20 minutes of wrestling to get the thing opened, you’ve created an unhappy customer. Not good.
- Six: Not Thinking About Returns Assume that at least some of your products will be returned. Keep this fact in mind when designing your packaging so that returns are easy and the buyer won’t have to reconstruct a complex box or carton just to send something back to you.
- Seven: Ignoring the Need for Variety Consumers are live everyone else: they like variety. If you’ve been using the same exact packaging design for 10 or more years, consider an update.
- Eight: Assuming That Cheap Packaging Saves You Money When you shop, do you always purchase the lowest-cost items? Probably not. That’s because price and quality often travel together. In packaging, it nearly always makes sense to spend a bit more up front on excellent packaging. In the long run, that investment translates into happier customers, a stronger brand image, and higher profits.
- Nine: Ignoring Shipping Costs E-commerce sellers need to focus on shipping costs when they design product packages. This concept is not so much about weight as it is about design, shape, and size of packages. Know how much it will cost to ship various design choices and be careful to not use too large of a package when a smaller one will deliver the same benefits.
- Ten: Assuming That Less Packaging is “Good for the Environment” Packaging does many things besides deliver your brand message and make items look good on a shelf. It keeps them in one piece, maintains freshness (where applicable), protects buyers from potential dangers, and extends shelf life. Cutting down on the amount of packaging materials is not universally “good for the environment,” regardless of what some people would have you believe.
Every industry has its own set of myths that have accumulated over time. The reasons these incorrect ways of thinking penetrate the common consciousness are unimportant, at least for our purposes. What is important is knowing what they are so you will be better able to prevent them from costing you money.
Here are the “Big Four” packaging myths that, for some reason, never seem to go away.
- Myth: Plastic is Evil The mainstream media is on a mission to turn “plastic” into the most frightening word in the English language. There are lots of instances when plastic packaging is unnecessary and over-used, but that’s not always the case.
For example, using plastic shrink-wrap on produce, like cantaloupes and cucumbers, significantly extends freshness, shelf life, and taste. This excellent use of plastic also prevents massive amounts of food waste. So, don’t fall for the big lie about plastic being evil. When used properly, it’s one of the best packaging materials there is.
- Myth: “Recyclable” Packages are the Best Just because a package is recyclable does not mean it will be recycled. When you purchase fast-food that comes in cardboard packages, you’ll often see the words “This package is 100 percent recyclable” on the outside. However, once food waste or grease touches the package, it’s no longer recyclable. Be careful how you use labels, so as not to mislead consumers.
- Myth: Consumers Don’t Care About Packaging Whether they admit it or not, consumers care a lot about packaging. If you are in doubt about this fact, spend five minutes online watching social media “unboxing” videos. These short clips feature consumers opening products that have been shipped to their homes.
Invariably, they comment on the quality of both packing and packaging. And don’t forget, millions of people collect vintage and artistic packages, so it’s clear that buyers pay much attention to how your product is packaged.
- Myth: Thick, Sturdy Packaging is Wasteful This falsehood is part of the “less is better” myth cycle. In many cases, durable, solid packages are necessary to keep products fresh or protect them from damage before they reach store shelves. At other times, packaging helps protect buyers from harm by covering sharp edges or potentially dangerous objects, like butcher knives or saw blades.
Preventing Packaging Mistakes
If you want to put your company’s packaging efforts on the right track, the first thing to do is settle the packaging question. In most cases, it’s possible to trim a decent amount of excess expense from your cost-of-goods-sold, boost profits, and use a more efficient package.
At Mid-Atlantic Packaging, we’ve been helping companies just like yours solve their packaging dilemmas for nearly four decades. Whether you need stock packaging or custom-branded solutions, we have what it takes for retailers, e-commerce sellers, jewelers, shipping companies, wholesalers, florists, restaurant owners, and every other type of company to package products the smart way.
For more information about how you can cut packaging expenses, check out our website or simply give us a call at (800) 284-1332. One of our packaging experts will be happy to answer any questions you have. We look forward to hearing from you.