Keeping costs low within your supply chain can require a great deal of effort, however, the impact can be dramatic. While most companies explore their inbound shipping process, outbound warehouse procedures, or increase communication between departments, for example, many overlook packaging. However, is a box just a box to your organization, or does it convey more?
The way you ship reflects on your brand and your company’s values. It represents your company’s environmental values and footprint, prevents damages and conveys your brand. Shipping materials can also be a great cost to your organization. Switching to a stronger box could have a cascading impact on cost for your entire supply chain. While you cannot simply avoid purchasing boxes, there are many ways you can reduce cost within your supply chain by examining what materials you are using to ship and how you are shipping. Below are 5 key packaging mistakes that lead to inefficient and high transportation costs.
1. Get organized & streamline
2. Stop oversimplifying & optimize
Shipping is a complex process, especially for ecommerce organizations. It takes strong strategic planning to truly optimize and cut costs. A new trend we are seeing, especially with ecommerce organizations is immediacy. Once a purchase is made, consumers expect their product almost immediately. Since time is the major driving factor, many organizations overpay to ship their product. Too often we see warehouses select the wrong type of packaging in a rush (either over or under stuffing), leading increased fees and damages. Likewise, ecommerce focused organizations have an abundance of SKUs to process. Even predictable packaging can be challenging to optimize due to the overwhelming amount of packaging options and methods. Most workers select the wrong box or packaging material 25% of the time, leading to greater waste or poorly packaged materials. The key is to find the right balance between product protection and cost. Too little packaging leads to increased risk of damages, waste, return shipping costs and low customer trust. Utilizing too much packaging will also be costly and poorly impact the environment, leading to poor brand perception.
3. Select the BEST material
4. Finding the right resources
5. Prepare for Returns
According to Kurt Salmon, leader of a global management consulting firm, 1/3 of all purchases are returned. When client’s send their purchases back, rarely do they know how to properly pack and return the product, leading to greater charges in damages, lost items or additional shipping fees. In order to reduce your cost, consider how your customers will return items when designing and selecting packaging. Your materials should be durable enough to be shipped multiple times, have proper shipping instructions and labels, and directions for shipping so your products return the way you expect them to come back to you – ie. Not damaged.