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.
It can become difficult to keep track of your inventory when transportation, warehousing, distribution, and packaging are all taken care of separately. Streamlining these processes into a single operation will help you have more control over your items. Less travel means that you’ll have a better idea of where your products are at all times, lessening uncertainty and increasing accuracy and efficiency. Furthermore, combining these services into one 3PL company will help you identify and take advantage of the most cost-effective and efficient resources through your supply chain.
Reduced Material Costs
Purchasing bulk materials at a commodity price and bringing packaging services in house to be integrated with distribution fulfillment services can cut costs significantly. Companies that choose to combine their distribution center with their packaging services are able to make smarter decisions about procurement, storing fewer packaging materials.
The more products need to be moved, the higher their chance of being damaged; thus, keeping them in one place will result in fewer casualties. Shipping products to and from an outside packager results in a three percent change of damage; therefore, avoiding this back and forth will save you the costs incurred to replace or repair damaged products.
Reduced Labor Costs
You need to remember that you’re not just paying to transport your goods to the packaging service—when you refrain from integrating packing and distribution, you’re also paying two sets of employees to work for you. It costs less to cross-train a 3PL packaging employee than it does to export the work. Since warehouse employees are a part of the distribution process, they’ll also have better insight on inventory needs.
Fast shipping is integral to the success of a business. Consumers are coming to have higher expectations as more and more online retailers offer expedited shipping at cheap rates. Transporting your products to another location to be packed can add up to seven days on your distribution time, making your customers wait even longer to receive their items. When you combine packaging and distribution you not only save money and resources but have happier customers as well.
Lower Freight Costs
The numbers speak for themselves: keeping your products in one place, rather than shipping them to multiple locations before they can be delivered to the customer, will cost you more. Having an independent packaging service can increase costs by up to 38%. This includes the additional transport and the workers who will get the job done. These funds can easily become profit when you decide to integrate packaging and distribution services.
Are 3PL Providers Ready to Combine Packaging with Distribution Services?
The truth is that some companies are ready to integrate distribution and packaging while others aren’t. Moving an intricate packaging operation into a distribution center is a big shift that 3PL providers need to be prepared for, and not all companies have the requirements needed to do this. Successful 3PL companies that want to combine their packaging and distribution must have experienced packaging engineers to design their new packing process, and modify their equipment as needed. They’ll also need an enhanced quality-control process to manage the inherent risk—slip-ups in either packaging or distribution can result in chargeback fines or, in some cases, recalls.
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.