20 Oct 2020 DTC, E-commerce Fourth Quarter Packaging Outlook – The Good and Bad News for 2020
E-Commerce Packaging Timelines
The good is that everyone is busy. When the corrugated box industry is thriving that means everyone is selling their products. This indicates the economy is rebounding and that is good for all of us.
Unfortunately, that increase in demand also produces some problems in the supply chain, especially when so many companies are still operating with reduced staffs and lingering Covid issues.
A couple of months ago I wrote a post (see first link below in related posts) predicting may of the issues that we now see happening. Lead times are long, shipping is delayed and costly, and industry experts are predicting a corrugated, industry wide price increase.
Most people agree it is not a question of if the price of corrugated is being increased, the questions are really reduced to when and how much?
Here is the good news, for MOST products it is not too late to get your pre-price increase, holiday DTC, e-commerce packaging!
However, there are a few packaging products where lead times are already into mid-December or even January.
Here is some information and advice based on decades of experience:
- Most delays in the design of a new box or envelope are a result of indecision by our customer’s team. Quite often because the operations or 3PL people are in direct opposition on any change driven by marketing.
- The term analysis paralysis comes to mind and we know the larger the team, the longer the delays. Our advice for fast results, keep the team small to make decisions quickly. This includes items like package size, PMS colors, artwork, etc.
- This season will not allow for last minute rush or expedited orders. No reputable company will allow you to pay an expediting fee to move you up the production schedule. What if the next call they receive is willing to pay more to get ahead of you in line? We never have and never will play that game.
- Be flexible and understand what you want or have used in the past may simply not be available in time. A good example is our extremely popular unpadded paper mailer envelopes. Unless you already have them on order, you are probably not likely to receive a new order in time. It’s possible that for this year, a mailer box may be a better option that can be delivered within a few weeks.
- If you ever considered size consolidation, this would be a good time to do it. You have a better chance of running 2,000 of one size rather than 1,000 each of two different sizes. The hurdle is set up time, which is costly to the plant. By size consolidation you will receive a lower price per unit and probably a quicker delivery.
- This may sound repetitive, but we cannot stress it enough. We know everyone is trying to minimize inventory at year end and keep costs down, but this is no time to order light. We recommend ordering heavy because we may be able to get one more order in for you before the holidays but it is unlikely we would be able to get a second, “fill in” order in time to do you any good.
- Understand lead time may not include transit time. With current trucking delays, what used to be 2 to 3 days has become a week so factor that into your planning.
- Finally, no one knows how much and when the increase will be implemented. Make sure you have enough packaging to take you through year end. After the first of the year the dust will settle and we will all have a better grip on the market.
This is historically a crazy busy time of the year and it is proving to be even crazier than normal with everything that is affecting costs and deliveries. If you have any questions at all, please call us at 630-551-1700 or contact us via our www.SalazarPackaging.com web site. We will be glad to review your specific needs and situation to provide what you need and hopefully, when you need it.