A few weeks ago, we published a post (see first related post below) about the five most common reasons DTC companies decide to do a redesign of their packaging. In that post we covered the two most popular, “To Enhance the Customer Experience” and “To Reduce Unit Cost”. In this post we will focus on the third, which is “To Reduce 3PL Packing and Assembly Costs”. Many e-commerce business owners are stunned when they realize how rapidly packaging storage and labor costs have risen, eating into their projected profits.
3PL Service and Rising Costs
The vast majority of our customers have web marketing backgrounds, not warehousing, logistics, or packaging production line experience. That is why so many, wisely turn to a 3-PL, co-packer, or fulfillment operation to do their “pick and pack” work. These 3PL companies charge customers for receiving and stocking their products and components, as well as any packaging materials necessary.
We all know that transportation and storage costs have risen dramatically but the greatest increase is labor. 3PLs are keenly aware of the labor shortage, and typically have to pay more to get good help, especially if it is day or temp labor. So, in an effort to maintain their own profitability, 3PL companies look at every segment of every process to determine where their peoples’ time is spent and what it costs. If for example, a box and insert take 3 minutes to form, pack and label, their cost per piece is obviously higher, compared to a similar application, taking only two minutes to complete. This may sound trivial or petty but multiply that out for eight hours for six production lines, and the additional expense is real and substantial. So, the end result is 3PL companies charging more, and our customers/brand owners suffering unanticipated costs.
E-Commerce Packaging and 3PL Expertise
We often have to explain to our clients and customers, the difference between graphic designers who are primarily focused on how a package looks compared to structural designers like us, who are focused on how a package works. That includes how easily a custom box and especially a custom insert assemble and are loaded with the products being shipped.
Besides really great full color printing, we are best known for creating inserts that keep a product safe and secure during UPS, USPS and FedEx shipment. The goal is always to prevent damage, provide an eye catching presentation where the product is featured, and make the assembly as efficient as possible with minimal skill and time required. Our commitment to the KISS principle in design is obvious in the packaging products we produce. We can also provide a 3-D animation or video to show pick and pack workers how to best and most efficiently assemble the boxes and inserts we make for them.
Packaging Redesigns Can Produce Large Savings
If you are producing a new e-commerce package, you have an opportunity to do it right the first time. Designing a package that is eco-friendly and sustainable, as well as lower in all costs is indeed possible.
Whether your package design is a year or several years old, you still have an opportunity to cut costs if your monthly 3PL bill is larger than you expected or want. Yes, new print plates or cutting dies MAY be necessary if you are modifying your current size or design but the cost is not as great as you think. In many cases we can assist you with those redesign expenses.
Select the Right Packaging Partner
Tell us where it hurts and we will make it feel better, we promise. One recent caller was concerned about storage costs at his 3PL so we reviewed his current package design. With a minor change in his current design, we reduced the cost of their boxes by over 12%, and we saved them over 20% on their 3PL storage costs. For a different customer, we saved them almost 50% on their assembly costs with an insert redesign.
No matter your need, after 15 years of helping companies save money on their e-commerce packaging, chances are we can help you achieve your profit goals. Call us at 630-551-1700 or contact us through this web site. We look forward to working with you!