Many online businesses don’t fully realize the importance of packaging in their overall business model, but the truth is that mistakes made in shipping packaging can cost millions of dollars. A lot of thought and consideration may go into the interior packaging, but e-commerce businesses often leave the packaging design of the shipment itself up to their suppliers or simply don’t pay it much mind. Believe it or not, making mistakes like this can have serious repercussions, leading to a very expensive chain reaction. Read more…
Smart e-commerce packaging design saves millions
It’s no easy task to optimize packaging for sending shipments out, what with the staggering number of possible combinations of products that a customer could order in a single shipment. There’s also the need to balance productivity by keeping a limited supply of box shapes and sizes. To complicate matters further, the way shipping costs are calculated have changed as recently as last year. So what are some of the things e-commerce businesses can do to ensure they aren’t making a million dollar mistake with their shipment packaging?
The first thing is to understand just how big of a deal shipping materials are. Most online businesses don’t realize how important packaging is in the eyes of consumers when they receive their product in the mail. 66% of US customers see shipment packaging design as a reflection of how much your company cares about their order, and roughly half say that it reflects the quality of the product.
Efficiency and density in packaging design
Shipping density is critically important to maximize profits. If your supplier ships from overseas, you’re paying for each freight container you use, and most products bought online take up no more than 60% of the package space. If you can improve your packing density from 60% to 80%, you can cut down on the number of shipping containers you use each week. Over the course of the year, this change alone can save well over a million dollars.
This also has side benefits that contribute to the overall efficiency of your shipping, including fewer broker entries and faster processing due to fewer containers clogging up the ports.
Cost-effective vs. protective shipping materials
It’s tempting for e-commerce businesses to rely on the cheapest packaging materials, and if you choose to leave it in the hands of your suppliers, you’re almost certainly going to end up with them. But this can be a costly mistake if you aren’t given your products adequate protection. Companies who opt for higher quality corrugate over cheap materials can save money in product waste from items damaged during shipment, return shipping costs, and lost customer confidence.
One way to save on the upfront costs of upgrading your packaging materials is to carefully research how your shipping costs are calculated under the new policies that went into effect in 2015, which primarily affects e-commerce businesses shipping products in boxes smaller than three cubic feet. In many cases, you could be paying 30% more if you use the dimension-based costs vs. weight-based pricing. And those are savings that will quickly add up.