The hidden costs of packaging that mean you could pay more than you bargained for
30 January 2024
Packaging is a critical component for the transport and shipment of many products throughout the global supply chain. The reality is that the real cost of packaging can extend beyond far the initial purchase price — there are hidden risks and costs that are initially completely invisible to inattentive purchasers.
Here’s a few of them.
POOR DESIGN AND EASE OF USE
Over-engineered packaging results in unnecessary material and manufacturing costs. Under-engineered packaging leads to damage and waste. A good design with a focus on ease of use will result in a lower total delivery cost.
SINGLE USE VS MULTIPLE USE
Multi-use packaging may lower the total cost per trip but not always. Factors such as waste disposal and packaging return needs to be considered. Options like hybrid packaging or single use packaging may be more cost effective.
Packaging that’s not up to the challenge only results in costly in-transit damage and upset customers. There is also the cost of extra handling, extra disposal fees and the extra troubles!
INVENTORY AND STORAGE
Many packaging suppliers demand long lead times and high minimum orders. This results in unneeded packaging taking up expensive warehouse space and high wastage as stored inventory can get lost, damaged, or obsolete before use.
STRATEGY AND REGULATION
Packaging that doesn’t align with an organization’s corporate sustainability or safety goals can impose further reputational damage. Remember that maintenance, storage, disposal, and environmental impact will increase your TCO.
ADMIN AND LOGISTICS
Lack of coherence from your packaging supplier means higher administrative costs and production coordination costs for you— not to mention all the extra hassle!
Missed deadlines due to packaging not arriving in time to your warehouse leads to disputes with your supply chain partners and customers and the cost burden of penalties and delays.
WHAT TO DO
Knowing these hidden costs can help businesses make more informed and proactive decisions for their operations. But, most importantly, be led by the transportation, handling, protection, and presentation requirements of your products. Then think about how you can optimize for cost.
To learn more about how Larson Packaging Company can help you with a cost-effective industrial packaging solution, contact us today.