How Custom Packaging Can Cut Costs

December 23, 2020 Written by Chris Amato

cardboard boxes in warehouse ready for transportation and delivery

Nothing is more disruptive to the shipping process than oversized packages or odd-shaped items. How to ship these sorts of packages poses a problem. A common solution is to simply place the item in a larger box, overstuff with protective materials and hope for the best. Many business owners erroneously believe this method is more cost-effective than custom packaging because the upfront costs are lower.

However, this method is much more prone to damage, which can cost more money in the long run. You can avoid potential disaster by choosing custom packaging from the start.

Pregis breaks down how custom packaging can cut costs:

Calculating Profit-Loss

It’s tempting to send an oversized delivery in standard packaging, but if the merchandise is damaged it can hurt your bottom line far more than springing for custom packaging. Some of the factors that cut into your profits include:

  • Lost worker productivity (production, warehouse and customer service)
  • Cost of replacement units
  • Time and materials for repackaging
  • Return freight
  • Insurance penalties
  • Return inspection (to confirm damage or prepare for resale)
  • Storage or disposal of returned merchandise

According to a Pregis study, the average loss of profit for each damage incident was $56. The loss can be significantly higher for oversized packages.

The True Cost of Damaged Packages

Profit-loss is usually the highest concern for packaging and shipping, but there can be other negative impacts. A few of the other ways shipping damage can impact your company include:

Lost Productivity 

A damaged package sets off a chain reaction. First, customer service will have to assist the customer. Next, the shipping team will have to package and send a replacement. Your team will also have to examine the damaged merchandise when it’s returned. This is all additional work that eats away at productivity.

Loss of Customer Loyalty

It’s inconvenient at best for customers to receive a damaged package. At worst, it could be the catalyst that sends your customer to one of your competitors. With an endless amount of choice, customers have a huge pool of companies to choose from.

Tarnished Reputation

Receiving a package is the very first impression your customer has of your product. Receiving a damaged product leaves a poor impression. Your customer may take their displeasure to a wider sphere – by leaving negative reviews and/or by bad word of mouth. This can directly impact your business’ reputation in the eyes of potential customers.

While it seems more cost-effective to rely on oversize packaging, in the long run this solution can cause more trouble than it’s worth. Choosing custom packaging ensures that your product is shipped securely, reducing the likelihood of damage and increasing the chance of a satisfied, happy customer.

Need a custom packaging solution? PackEdge works closely with you to find the best packaging solution for your products. Together we will identify opportunities to save cost, reduce product damage and enhance your customer’s experience.

Schedule a Packaging Analysis with PackEdge

PackEdge Corporation is a wholesale distributor of packaging systems and consumable products. We sell a variety of packaging equipment and products including stretch wrap, void fill, shrink film and more.

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