If you’re looking to reduce your overall shipping costs, take a look at your packaging. It’s often an overlooked place where you can see significant cost savings with minimal changes. The top things to consider include: product protection, branding and design, package size and weight.
The type of product you sell is very important when it comes to packaging. A camera will require much different packing materials than boxes of cereal. There are a few reasons this distinction is important:
- Damages—heavier materials, more dunnage, or special sized boxes may be needed for items that are more expensive. Any damage that is incurred along the shipping path may result in a returned item and disgruntled customers (who won’t come back for more purchases).
- Value—the retail cost of goods should fall in line with the type of packing material used. A premium product will not seem as premium if it arrives in a flimsy shipping carton and is damaged at the time of delivery.
But Isn’t Branding More Important?
A current trend, especially for CPG (consumer packaged goods), is emphasizing the unboxing experience to delight the end-customer. Sellers have particular desires when it comes to branding their packaging to stand out from the rest of the brown boxes on doorsteps.
“We are seeing a lot of brands these days looking for lightweight, low cost packaging and shipping, however they may have designed a shipping carton that requires hand folding and manual insertion of sheets or filler. Consult with your 3PL; pick, pack and ship should flow through a warehouse, handling shipping cartons and dunnage can be automated to capitalize on accuracy, efficiency and potential cost savings.”
Having branded packaging is usually at complete odds with having a low cost shipping strategy. Why? Not only do branded materials cost more, they also incur costs at assembly, and shipping.
One thing companies often overlook are the costs for storage, assembly, packaging, and shipping. No matter if you outsource these or do them in-house, specialized packing materials will add the time, effort, and money needed. Custom boxes require special storage, they require manual folding, and hand taping. They may or may not fit within an automation system, like a tape machine—meaning they’ll require manual taping and stickering as well. Custom boxes and packaging can be especially cumbersome during promotional periods or peak shopping season and may inhibit your ability to get orders out quickly.
While branding is important, the costs incurred may be larger than the importance of having specialized packaging. It’s an important consideration to make at any stage of business.
Thinking Inside The Box
The space within your box matters for a few very big reasons. DCL Logistics customer Willow recently reduced their shipping and labor costs by 50% by re-thinking their product packaging strategy.
A few years ago the small package carriers (UPS, FedEx, and USPS) changed their method for billing. They went from determining the cost of shipping a package from actual weight to dimensional weight. It used to be that if you sent a huge box with only a toothbrush and a pair of socks (let’s call that a 4oz package) the shipping cost would be based on the actual (4oz) weight. Now, the carrier will calculate the size of that huge box (let’s call it 20in x 12in x 12in) and calculate the shipping cost based on the actual space that it takes up in the truck—also known as the dimensional weight. Choosing boxes that are right sized for your products will eliminate extra fees due to dimensional weight rates.
Your ideal scenario when packing multiple items in one box, is to overpack the box in order to optimize for dimensional weight. If a box is overpacked (versus with only one product per box) this will also inform the type of packing materials you use. You may need a thicker box, stronger or wider tape to ensure your products arrive safely at their destination.
If your products aren’t packaged correctly you may see your goods get damaged on the way to your end-customer. This will incur revenue loss, both from replacing damaged goods and potentially losing customers.
It’s important to provide a package that shows up in a quality state and keeps your product intact. It happens quite frequently that a seller may not think of changing their packaging if they are seeing returned and damaged items. Especially if they are set on using branded packaging.
If you start to see damaged products and an uptick in returns items, it may be time to reassess your packing materials.