The REAL Cost of Damaged Products

June 8, 2021 Written by Chris Amato

Angry confused woman unpacking parcel

Every business knows that damaged products are a drain on the bottom line. However, it’s much more than just the cost of the product itself. A damaged product sends a ripple through your entire production.

What is the Cost of a Damaged Product?

Pregis lists some of the true costs of damaged products:

When evaluating and choosing protective packaging, companies oftentimes have trouble seeing beyond packaging costs alone – not realizing the ripple effect that ineffective packaging can have on their business. If you were to include every function and process in calculating costs for a single return, it could easily reveal hundreds of dollars in added expense.

To shed some light on the not-so-obvious ways that ineffective packaging can impact profitability, we’ve identified six ways products that are damaged, broken and/or delivered in non-functioning condition incur profit-killing costs:

  1. Freight: Shipping the damaged product back to the warehouse and sending a replacement product.
  2. Product cost: Providing a brand-new product or repairing the damaged item.
  3. Customer-service labor: Processing returns and talking to customers who may want to vent about their experience.
  4. Warehouse labor: Time spent evaluating the damaged good to determine whether it should be fixed or replaced, then repeating the fulfillment process all over again.
  5. Packaging supplies: Paying for the same supplies twice.
  6. Customer lifetime value impact: Consumers who receive damaged goods are much more likely to shop elsewhere next time.

>> Read Now: 6 Tips for Increasing Efficiency in Your Packaging Operation [Infographic]

How to Avoid Damaged Products 

The best way to avoid damaged products and the costs that come with them is by ensuring that every step of your packaging process is optimized.

PackEdge offers a packaging analysis for just this purpose. Our experienced team will analyze your current packaging operation to identify any gaps between your current process and where you want to be and review these specific areas:

  • Your goals and company’s objectives. It is important that we get to know your business within your industry and fully understand what must be accomplished.
  • Current packaging process. A professional analysis of each step in your packaging process to identify areas for potential improvement based on your goals.
  • Package design. Discussion of materials, product size, special requirements along with product damage experienced and preferred shipping method used.

Using the information collected in our discussion, we will prioritize packaging design, packaging materials and packaging systems and propose value-based solutions.

Schedule a Packaging Analysis with PackEdge

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

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