Packaging is an ordeal in itself, and one that most retailers choose to leave to a capable third party. But the cost of packaging needs to be taken into serious consideration, including seasonal packaging price increases, which can drive costs up significantly. And for small businesses, even slight increases in costs can have large implications.
But packaging solutions do exist which can reduce costs enough where it makes a difference in your company’s bottom line. The key is to align your company with an experienced third-party logistics (3PL) who has the capabilities to offer the packaging services your business needs, which prevents the extra step of hiring a packager.
Connect With 3PLs
Third-party logistics have come a long way from simple logistics. They offer a wide variety of services, from distribution to warehouse management, that can help retailers streamline their operations. Partnering with 3PLs on the packaging side is also an option, so long as the company has a team capable of making it work.
Currently, the standard approach for retailers is to outsource its packaging to a third party distinct from the distribution or warehousing. Part of the thought process behind this is that packaging is such a crucial part of the sales and customer service process, particularly for specialty brands and companies who are focused on sustainable packaging.
But connecting with a high level 3PL that can offer this service has its benefits. Most notably, integrating packaging costs, with the rest of the distribution center solutions, can decrease order to delivery efficiencies by up to seven days and save on freight costs to the tune of 30%.
More Benefits of Combining Packaging with Distribution Services
Several more benefits need to be acknowledged when integrating packaging with warehouse and distribution services.
- Reduced Labour and Inventory Costs: We’ve already mentioned how exporting packaging services can add up to seven days to distribution, not to mention the uncertainty that comes with not having your products readily available, which leads most manufacturers to increase inventory. That decision, of course, increases the cost of labor and inventory. Working with a 3PL does the exact opposite; it costs less to cross-train a 3PL to package than it does to outright export the work. And because warehouse employees are part of the entire distribution process, they will have a much better understanding of inventory needs.
- Cutting Back on Damages: Every single time a product leaves from point A to get to point B, there’s a concern for damage. Keeping packaging within the warehouse means one less trip, which lowers the chances of any loss or damaging of products.
- Lowering Freight Costs: The numbers speak for themselves: having a separate packaging specialist increases costs by up to 38%, including the additional transport time back and forth from the warehouse. Put into perspective, eliminating that cost could save close to $4.0 million on a $10.0 million spend.
These benefits are all great, but none of this is possible without a 3PL that can do the job right. If you’re thinking about integrating your packaging services, speak to the team at APS Fulfillment, Inc. and let us help save you time and money while not losing any quality of service. Contact us to learn more or request a free quote here.