costs of unreliable packaging solutions

Uncovering the Hidden Costs of Unreliable Packaging Solutions

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Many clients are startled when they receive an initial quote for the professional packaging solutions they are interested in. Their initial response is that they usually pay much less for their packages. At this point, the packaging specialists at Logistic Packaging will ask: do you know how much unreliable packaging really costs your company?

What Makes Old Packaging Solutions Unreliable?

Looking at the evolution of global trade, we see no resemblance between how things were done a few decades ago and how they are done now. In the past, goods were sourced locally. Ordering from a long distance was unfeasible, especially from overseas. Transportation costs and custom duty would make the final price unacceptable for most consumers.

Thus, producers would pack their goods in cardboard boxes and wooden pallets because they were cheap and they were acceptable for short journeys in a truck. Many these packages were for single use, anyway. Back then, people were not aware of the mounting pile of waste accumulating in landfills and threatening the ecosystem.

How Global Trade Has Changed Packaging Needs

At the present, things couldn’t be more different. Large shipping vessels and international trade agreements have made most products accessible for the average consumer. This means that most supermarkets and retail store have a wide range of products from all over the globe: European fashion brands, South American exotic fruit and every type of household goods and electronics made in China.

This creates a problem for companies still using unreliable packaging made of wood and cardboard. The longer a product has to travel to reach store shelves, the more complex its handling and shipping becomes.

What Are the True Costs of Unreliable Packaging Solutions?

Let us look at the implications of using older packaging solutions in the new, globalized supply chain. Here are some key facts:

1. Increased Handling for All Products

The average retail product is handled five times. Ecommerce products can be handled up to 20 times before they reach the end consumer. These handlings are both manual and automatic.

Most wooden and cardboard packages cannot withstand this level of handling. When employees drop a box, it will definitely break, damaging the products inside. Wooden pallets are usually cracked when handled by forklifts and pallet trucks.

2. Unreliable Packaging Implies Repeat Purchases

Do you know how much you actually pay for very cheap packaging solutions? Statistical data shows that the average professional plastic pallet or plastic foldable container has a lifespan of at least 7 years. Companies that rely on older packaging materials have to replenish their stocks of boxes and boxes at least on a yearly basis.

3. Returned Products Can Cost up to 15% of Your Revenues

Another hidden cost of unreliable packages refers to product returns. When consumers find the slightest damage, they will return the product. Depending on the policy of your store (in line with legal regulations), you may have to:

  • Pay for the transportation of the returned product
  • Refund the customer
  • Replace the damaged product with a new one at no cost to the customer.

In total, companies lose as much as 15% of their revenues in this process. And, in many cases, unreliable packaging solutions are the main cause of damaged products.

4. Automation Saves Time and Money – But Older Packaging Causes Problems

Warehouse management specialists say that even a few seconds saved in order picking or rack replenishment can make a huge difference in terms of increased profitability. However, modern warehouse machines, including automated vehicles and material handling equipment cannot work efficiently if you still use cardboard and wooden packaging.

On many occasions, these unreliable packaging solutions break down during handling or on conveyor belts. The entire process has to be stopped to clear the damage, losing both time and money.

5. Consumers Will Not Buy Again from Companies that Deliver Damaged Goods

Finally, one of the biggest hidden costs of unreliable packaging solutions is losing your customers. Most consumers will look for another brand if they receive damaged goods.

Moreover, they will share their negative experience on their social media pages, thus warning off their friends from buying from that company.

The Logistic Packaging experts can help you replace old packages with modern, professional packaging solutions tailored to your needs. Send us an email or schedule a Skype video call with us to discuss your logistic operations and packaging needs!