Outsourcing Packaging Services: A Great Way to Reduce Costs

Packaging is a very important part of the distribution cycle. The packaging itself does a lot of marketing for your product. A question comes to mind: Would it better to do the packaging yourself or get a company that specializes in packaging do it for you?

If you chose the latter option, then you are definitely on the right track to success. A dedicated company that specializes in packaging can help your business succeed by leaps and bounds. You can outsource a credible company that could package your product and gain many advantages by doing so.

The Two Factors of Packaging
When it comes to packaging, two factors emerge: cost and control

Cost
A lot of expenses incurred during packaging:

  • Cost of Packaging Supplies
  • Cost of Warehousing
  • Cost of Equipment
  • Cost of Labor

Depending on what you manufacture, the cost of setting up warehouse and equipment alone can be gigantic. In some cases, they are simply unaffordable by businesses. Apart from this, the cost of the supplies required for packaging is yet another thing.

If you do manage to set up the basic infrastructure and equipment, you will then be required to hire the manpower to operate it – which is again, a huge expense and a hassle.

Control
When it comes to how much control you have on your packaging design and graphics, your own packaging facilities will no doubt have full control over every aspect of your packaging needs.

However, more and more outsourcing companies are now inviting inputs from their clients regarding their requirements.

A Survey by the Conference Board
A recent survey by The Conference Board indicated the following outsourcing objectives and how much effect it has in improving various aspects:

  1. Reduce Costs (40%)
  2. Access to Expertise (38%)
  3. Improve Internal Service (37%)
  4. Focus on Core Business (34%)
  5. Maximize Resources (27%)
  6. Internal Flexibility (25%)
  7. Improve External Service (24%)
  8. Changing Customer Needs (20%)
  9. World Class Standards (15%)
  10. Continuous Improvement (15%)

Advantages of Outsourcing Packaging Needs
Reduce Costs – You do not need get warehousing for setting up packaging equipment nor hire the manpower required to operate it. Outsourcing will help in cutting these major costs because the outsourcer will use their own infrastructure, equipment and workforce.

  • When you sign an agreement, you will also be settling upon a fixed price for the raw material supplies required for your packaging – even if the cost of materials increases, it will not affect you.
  • You will be charged on a cost per unit basis, meaning that you will be able to plan your finances for the whole year in advance.
  • You will save on payroll by requiring less employees>/li>

Improved Quality – You will gain access to specialized expertise and state-of-the-art equipment for all your packaging needs.

Flexible Volumes – A professional service provider will easily meet your fluctuating volume demands when your business starts to grow.

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