Did You Know? The Total Cost of Packaging

Did You Know? The Total Cost of Packaging

What do you think of when you research different types of packaging? You probably consider a few different things — what will be most effective, what looks nice, and what you can afford. That last consideration is key. You likely think about the cost of the individual supplies, such as boxes or mailers, tape, void fill, labels, and beyond. A lot of these items have a set price and you can simply select which options are the best all-around choice for your products and business. If it doesn’t fit within your budget, then there’s no reason to even look at it in the first place.

This factor in the price of packaging is absolutely essential, but the unit price of each individual type of material is far from the only consideration to make when it comes to the total cost of packaging. Instead, these supplies account for what we call the “visible cost.” This is the number you see on your receipts and invoices along with each separate line item. Because you can see these numbers, add them up, and include them in your budget, they’re easy to remember and what we most often think of when it comes to the cost of packaging.

Visible Costs vs. Invisible Costs

The individual products that make up your total cost of packaging are just a small portion of it – only somewhere around 15% actually. So what makes up that other 85% of your total packaging costs? The answer is something we refer to as invisible costs. These often include factors like:

  1. Labor and Workforce Costs
  2. Administration Fees
  3. Vendor and Purchasing System Management
  4. Engineering Services
  5. Delivery Costs
  6. Waste and Waste Disposal

How Do I Save on the Total Cost of Packaging?

Some companies believe that their labor costs actually make up approximately 60% of their total cost of packaging. If this situation is in fact the case, then it may seem like purchasing the cheapest packaging supplies is the right call. However, cheap and ineffective materials tend to result in forcing your employees to work harder to achieve the same results, a higher chance of workplace injuries, and an even greater likelihood of quick turnover rates. Investing in high quality, rightsized, and effective packaging supplies can actually drive down the total cost of packaging by lowering your overall labor expenses.

Other considerations to make as you determine how best to lower your total cost of packaging include reducing your admin expenses. Managing a large variety of vendors – one for each type of packaging material – can get time consuming, frustrating, and expensive. Consolidating to one distributor who can cover everything you need minimizes these headaches and puts an end to a lot of that wasted time. After that, think about how much you spend on transportation and inventory storage. Sometimes paying just a little more for your actual materials can reduce expenses in other places by allowing you to pack boxes more efficiently or fit goods that aren’t ready for shipping more effectively into your warehouse or other facility.

Did You Know? You Can Save on Packaging

Once you begin paying attention to all of the seemingly insignificant details, opportunities to reduce your total cost of packaging will begin appearing all over the place. If you need more help or have any questions, all you have to do is give us call at (888) 893-7921 or fill out our contact form. One of our expert packaging specialists will help you find all the ways you can reduce expenses when it comes to your packaging process!

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