Packaging can be a significant cost to a company, especially when you consider the total cost of ownership. Yes, packaging itself has a cost, but there can be some additional costs that are indirectly related to the kind of shipping materials a company chooses.
A rough guide for the cost of protective packaging is two percent of the value of the item being sent. If the item costs $100, the packaging should cost $2. If the item costs $1,000, the packaging should cost $20, and so on. These numbers are often used as an industry standard, however, many companies want to keep packaging costs to a fraction of that amount. With flexible product packaging, savings are possible through several avenues.
An area of total ownership costs to investigate when looking at your company’s shipping includes the labor costs of assembling all the shipping materials. As companies are trying to reduce their overhead, they often overlook the labor required when it comes to shipping.
As the old saying goes, time is money. With some shipping materials, it can take several minutes to assemble a single package and get it ready to send out. It has become such a concern that some companies are conducting time trials and tests to determine whether it is possible to reduce the time of these packaging processes.
With flexible product packaging, it is easy to significantly reduce the amount of time a single person spends on packing and preparing products for shipping. Instead of taking time to prepare the box or wrap a product in shipping materials, employees can grab a single flexible pad, wrap it around the product, stick it inside a box, and seal it up.
What use to take the packer minutes can now be done in seconds, cutting their time by as much as half. The end result is that all employees can double their output, or the company can reduce their shipping department by half, with no more overtime and no more shipping delays. In fact, companies can even increase revenue, winning back customers who left because they could not get their products immediately, previously having to wait for five to seven days because of shipping processing delays.
Compare that to other shipping materials processes and products, like bubble wrap, brown kraft paper and packing peanuts. Not only do these take longer to assemble, but they have varying costs of use since each employee possibly uses too much or not enough of the packaging when assembling their packages.
Ultimately, flexible product packaging has the potential to impact company’s shipping department just through reduced labor costs, but the added benefit of uniform material usage can further increase savings.