It's time to save money on your packaging. Here are 6 simple ways.

Have you ever thought about some of the ways that you could find some hidden cost savings potential in packaging? Ten years ago, it wasn't a high priority. However, as transportation and warehousing costs have continued to steadily rise, companies realized that packaging offered a fresh opportunity to cut costs.

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Despite that new found awareness, many companies are still struggling to identify where exactly they can cut costs in their packaging without creating bigger problems down the line. A good place to start, say some experts, is with small incremental changes that can add up to big results. Here are a few to consider.

1. Cut the size of your primary packaging. Sometimes, a small change to the product's primary packaging (what the consumer takes off the shelf) can result in a big reduction in overall supply chain costs. For example, a food company redesigned their packaging for frozen pizza so that the box's length and height were reduced by 1/16th of an inch and 3/8th of an inch, respectively. It was almost imperceptible to the consumer, but that small decrease allowed the company to use a different size case, which in turn allowed it to utilize the pallet better and fit more boxes of pizzas into a case. These changes ultimately resulted in transportation cost savings of over $500,000 per year.

2. Change the count. Sometimes you don't even need to change the size of the packaging; you just need to reconfigure it so you can fit more product inside. A health and beauty company saved a quarter of a million dollars by changing the package to allow products to nest inside it differently, which reduced the package profile. The new package also resulted in a smaller case, which saved materials and drove cube efficiencies, creating a 50% increase in product density, so there was more on a pallet. And when you increase product density like this, it can create a kind of ripple effect,  gaining efficiencies in warehousing and storage and in transportation, while reducing handling and labor.

3. Alter the size of the shipping case. Making small adjustments to the secondary packaging (the box or case in which the product is shipped) can also produce big savings. For example, by slightly altering the size of a case of product and how it was unitized on the pallet, one major retailer was able to add an extra layer of product on the pallet. That extra layer allowed them to get more product into each truckload shipment, cutting down on the number of shipments of inbound product by several hundred over the course of a year.

4. Leave a gap. And sometimes the changes to the shipping case don't even have to affect the box's overall size. Walking through the DC one day, one manager began to wonder whether he could use less material to create the shipping cases for cereal boxes. At the time, the company was shipping its cereal boxes in a "full-coverage" regular slotted carton created by gluing the flaps together. Could they get away with cutting the size of the flaps by an inch? The box would now have a gap in the middle, but it would still be able to safely transport cereal boxes. That simple change saved about 20% on the shipping case material required, which netted a little over a million dollars in material savings in a year, and all they did was adjust the glue nozzles on the case erector, moving them by a mere inch.

5. "Rightsize" your carton lineup—which may mean more, not fewer, options. Sometimes, companies try to save money by limiting the number of shipping boxes and cases they use. While that can save money on material costs, but it often turns out to be a case of "saving nickels by spending quarters." Many times, this effort to reduce complexity means that the company is shipping products in boxes that are too large. To keep the product from rattling around in the box and becoming damaged, the company often has to pay more for filler material, and the product takes up more room in the warehouse and on the truck than is strictly necessary. Sometimes something like increasing the number of boxes available from, say, nine to 12 has ended up saving a company around half a million dollars a year.

6. Buy better-quality corrugate. While using a better corrugated box for your secondary shipping packaging might raise your corrugate costs, using a sturdier box might end up saving you money overall. First off, a better-quality corrugated box can provide better protection to the product, which reduces damage. Second, with a stronger box, you can stack more cases on top of one another, and thus, get more cases on a pallet. This allows you to save money on storage and transportation.

BUT DON'T GO TOO FAR! As you make these tweaks to your packaging, be careful not to go too far. Keep in mind that the primary purpose of packaging is to ensure the product arrives at its destination undamaged. The quarter of an inch that you shave off here or the extra product you squeeze in there should not lead to a higher incidence of product damage.

How do you avoid making that mistake? You need to test it to make sure it will work in a distribution environment. Test the packaging at both the case and unitized-pallet load level to see how it handles compression, shock, and vibration. Drop tests, for example, will indicate how well your packaging can prevent product damage.

Think about how all of the packaging components (the box, the pouch, the case, the pallet, the shrink wrap) will work together as a total delivery system. It's not about minimizing the costs of the individual components; it's about optimizing the overall system.

How to Optimize Your Packaging to Save Money and Improve Your Customer Experience

Packaging is an integral component of any eCommerce business. When someone orders your product online, it’s the package that ensures it moves safely from your warehouse to the customer. That external shell also provides them with their first experience of your product and your brand.

Globally, the eCommerce packaging market is worth some $70.27 billion, with packaging accounting for 10%–30% of the cost of goods sold (COGS). Despite its importance, packaging is an afterthought for many eCommerce stores.

You have several avenues available to refine this back-end element with ease, such as using Amazon packaging options and shipping your goods in reused boxes or having only one or two box sizes for all your products. By optimizing your packaging, you can reduce total costs, improve your brand image, and streamline your shipping process.

How packaging impacts your business and customers

Packaging affects nearly every part of your shipping and distribution chain, with the most obvious being the shipment itself. Customers buy products online expecting them to show up intact and undamaged. However, Packaging Digest found that 11% of all packages are damaged in transit. Those products have to be returned and replaced, and customers become unhappy. Although some damage is due to carrier mistakes, poor or improperly sized packaging is also a culprit.

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Globally, eCommerce produces over 3.4 million pounds of packaging waste, and that costs eCommerce sellers significantly in terms of shipping costs, public opinion, and, increasingly, regulations. Moreover, with posts shaming brands for using excessive packaging to ship items, neglecting your packing strategy can affect your public image as well. In fact, 82% of consumers said they were willing to pay more for sustainable packaging, including right-sized and recyclable boxes.

Cutting down on packaging size also benefits your store in other ways, such as lower material costs, which apply to both the original box and the dunnage to protect the product inside. While these expenses ultimately depend on how much you pay for warehousing, shipping, and storage, large packaging will increase every one of those elements.

Steps to Optimize Packaging

Optimizing packaging requires an investment in understanding your inventory and your packaging supplier to find workable solutions.

Choose your sizes wisely

Customers are increasingly concerned about waste and actively want to minimize it, so you can appeal to their environmental values by fitting your products with the minimal amount of packaging required for safe shipping.

Even for web shops with expansive catalogs, you can normally identify average size, weight, and needs for your items. That allows you to determine a general right size for your packaging based on these simple categories. If you state which size box a product needs, shippers can easily pick and pack the appropriate box, and that standardization will reduce procedural costs and effort. This practice applies to multi-item shipments as well. You should know how every product combination in your store fits into boxes and keep box size recommendations for them.

Dunnage and inserts are also impacted. You know what forms of transit and the potential risks your products face when you ship them, so it’s critical to balance protection with sustainability. That could look like a smaller box with less dunnage or an insert to hold the product in place inside the box. The advantage of an insert is you can customize its size and messaging so it’s relevant to each shipment size and product type.

Review your delivery pipeline

It’s difficult to tell upfront what packaging will do best in your delivery pipeline. So, it’s important to review aspects like:

• What form of transit will your package undergo?
• What types of weather does your package have to be resistant to?
• What kind of unboxing experience do you want to give your customers?

It’s also important to experiment with potential solutions. You need to answer questions like:

• Which box option is the fastest to pack? With inserts or with dunnage?
• Which box option better protects the product(s) during shipment? Is there a difference in the rate of return or number of products damaged during shipment What about different types of dunnage?
• Does scaling down box size reduce damage to products?
• What kinds of damage are most common among returned products? For example, if you know the most likely issue is water damage, adding a plastic seal can significantly help. Or, if bent corners are a problem, you probably want packaging inserts.

Reduce waste and returns

Although you need to use enough packaging to protect your shipments during transit, too much can be just as harmful as not enough, depending on the product. The below list displays the risk level for various types of packaging and dunnage:

• Plastic envelope packaging – High risk of damage
• Plastic envelope with bubble wrap – Average risk of damage
• Well-fitted box with loose-fill dunnage – Average risk of damage
• Well-fitted box with cardboard or foam box insert – Minimal risk of damage
• Larger box with cardboard or foam box insert – Almost no risk of damage but waste of materials
• Larger box with loose-fill dunnage – Average risk of damage and waste of materials
• Large box with loose-fill dunnage – High risk of damage and waste of materials

Ideally, aim for packaging that’s just large enough to fit the product and an appropriate amount of dunnage or an insert.

Most shippers use product volume to calculate box size (i.e., width x length x depth). The problem though (one that often results in products being shipped in far-too-large boxes) is that, if you have a few standard box sizes, a product that exceeds them in one dimension will automatically be upgraded to a larger box, resulting in greater waste to pack and protect it.

You can also run into issues if you have a 3PL shipper that automatically calculates box size based on these dimensions, especially when you introduce bundles or sell more products together. This makes it important to understand and create packaging recommendations based on known combinations from your shop.

Keep the unboxing experience in mind

Unboxing videos are a popular trend, so you want your products to arrive at your customers in good shape to make a good first experience of your brand. So, invest in good packaging to ensure a good customer experience after shipment. Then, you can put some thought into packaging, presentation, and how the product looks when you open it. During this stage, look to your buyers to determine what most appeals to them:

• What are customer reactions to unboxing different types of packaging?
• Which boxes do customers rate most favorably in terms of waste, sustainability, and ease of use?
• What kinds of packaging allow your product to ship without moving while also looking good when opened?

Test multiple options, ask questions, and incorporate the data gathered to optimize your packaging for delivery, protect the product, and improve the customer experience.

Wrapping up — Consider your packaging to boost your brand

Taking steps to optimize your packaging can yield fruitful results for your brand. The most immediate are reduced expenses, as right-sized packaging costs less to store, buy, and ship and takes up less space during delivery, so you can send more packages per shipment. It also means you spend less on dunnage and box inserts to protect your products. Best of all, it gives customers a good first impression of your offering and your brand.

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