Hidden Cost of Packaging

Hidden Cost of Packaging

It is rightly said that packaging is the cloth for products & it makes your product stand out from the competition. Well but, how can we find out that how much our packaging costs? What is the importance of packaging? What is the right packaging for a product? Since the cost of the packaging material which we know is like the tip of the iceberg, as only 5% of our total packaging costs consists of primary packaging material. The rest are hidden beneath the surface. Here are some points to consider while finding out the actual cost of packaging:

  • Brand Establishment: Steve jobs said that “Packaging can be a theatre it can create a story”. The product is known by its packaging, but if the packaging is not good then it will dissolve the brand image. This is the era of e-Commerce since E Commerce sale in India has increased from 2.4 to 7.6 billion dollar from 2012 to 2015. In the increasing e-Commerce market packaging is the vital element. Yet, as many as 38% of customers are dissatisfied with the packaging they receive, according to the Interactive Media in Retail Group (IMRG). The brand name of the e-Commerce firm is established only by the number of satisfied customers it produce and it is only possible by right packaging and by sustaining the surprise feeling for the customer on getting the product as “it is gift from me to myself”. To have the right brand value, right packaging is required and thus it adds up to the cost.

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  • Product damage: Packaging provides protection to the product and if the packaging is not good then it may lead to damage the product during transit, or during supply chain in e-Commerce. In this case it should be replaced and thus it adds to the final cost of the product.

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  • Time Motion study: Time motion study is very important in packaging. In e-Commerce packaging it’s an vital element as in e-Commerce time is very important factor and the time taken to pack the product adds to the cost since timely delivery is very crucial.

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  • Packaging Inventory Storage: Inventory of packaging also adds to the cost. Stocking of the packaging material for further use also increases the cost, so it is better to go for service providers which give stock & drip feed service for packaging material such as Store.Packagingconnections.com

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  • Right fit: Clothes are all about the right fit similarly packaging serves as clothes for the product and it serves the purpose only when it is of suitable size. Your storage and shipping cost will be minimised only when the packaging is optimized. The right packaging will serve the purpose better. We are happy to help you at PackagingConnections

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  • Ancillary Packaging Cost: When we are calculating the cost of packaging we mainly consider the cost of carton and primary packaging, but oversee the cost of tape and cushioning material, but these also add up to the cost and on large basis they effect the profit margin.

ggg Note: Photographs have been picked up from google.  

Author - IMG-20151109-WA0028 Ankit Farkya Consultant (Packaging for e-Commerce)

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