How to Save on DTC Shipping
Most of our customers and clients are DTC, direct-to-consumer companies. Over the last 14 years, they have taught us much about SEO and customer acquisition as well as overseas sourcing where many of their products are manufactured. However, the vast majority will admit they know very little about DTC packaging or how to accurately determine their total packaging costs.
That is where we fit in. We provide structural design as well as advice on graphic design. More importantly, we understand the real or actual cost of your packaging goes well beyond the cost of the shipping box.
Here are a few tips to consider to make your DTC business more profitable.
DTC order fulfillment costs
We often refer to them as contract packagers or simply co-packers, but they are called by many names including 3PLs, Fulfillment Partners, and Pick and Pack operations. They receive and stock your product components as well as your packaging supplies so they can pick, pack, and ship your orders.
The problem is the overwhelming demand for this type of support and the shortage of labor have combined for substantially higher fulfillment pricing. Every minute of time it takes to fold, erect, form, and handle your packaging and products is timed and billed. We are probably one of the leading insert designers and manufacturers in the industry, constantly improving how we can make an insert with minimal number of pieces, minimal manual manipulation, and maximum protection. Depending on the product, it may not be easy to deliver everything, but we have the experience to accomplish the objective.
DTC packaging outbound shipping costs
It is relatively easy to compare the cost of one box versus another. As discussed above though, the total cost per unit shipped can far exceed that cost per box.
Another area that can be very misleading is outbound shipping cost. Whether you or your customer are paying for the shipping cost, that dollar amount usually exceeds what you anticipated when creating your business plan. This can vary depending on which carrier you are using and what service level you choose to provide your customers. A popular one is USPS’s cubic rate program where your cost is determined by the exterior dimensions of the package you are shipping. You can see the cost difference on this link: https://www.stamps.com/usps/cubic-pricing/
For others, shipping by weight can be more economical. The key here is to know where the weight/cost brackets are and avoid crossing price brackets if possible. For example, the cost increase from under one pound to just over one pound can be startling and expensive. Minimizing the size and weight of the package you ship is always a good idea because there truly is no such thing as FREE SHIPPING. Someone is paying for it and in most cases, that someone is you.
DTC packaging inbound shipping costs
Whether you read about equipment or driver shortages, or fast-rising fuel costs, the cost of shipping boxes from the box manufacturing plant to your 3PL packer has never been higher. We have helped many customers identify and control their inbound shipping and storage costs.
Understandably, one of the things 3PL and fulfillment operations charge for is storage cost per pallet. So, the more boxes you can stack and ship on one pallet, the lower the cost. Without getting too technical in this post, by improving the board grade while reducing the board thickness, we can help customers reduce from C-flute to B-flute board. Or possibly reduce board from thickness B-flute to E-flute. This difference may seem slight and not worth the effort but a B to E reduction can reduce shipping and storage costs by over 40%. Or calculated differently, you can store and ship the same number of boxes on 6 pallets of corrugated boxes rather than 10 pallets. The potential savings is obvious.
Our Experience is Available at No Cost to You
At Salazar Packaging we measure industry experience by decades rather than years or months. This means we have probably seen it all and truly understand that overall cost is where substantial savings can be found.
Our goal is not to quote on your box purchases. Our desire is to better understand your TOTAL packaging requirements and those associated costs. We ask a lot of questions, but that is what professionals do. The better we understand you and your application, the more likely we are to help you minimize or reduce the cost impact of this unprecedented, seemingly out-of-control packaging market. The only thing we can guarantee you is that the cost of packaging is not going to decrease in 2022. In fact, there is already talk of a new increase in the spring.
The sooner you analyze your overall costs and implement a cost-reducing strategy the better. Call us at 630-551-1700 or contact us at Salazar Packaging for a no-cost, no-obligation review of your needs.