The global supply chain operations depend on the synchrony of key players to make sure demands are met as efficiently as possible. But one singular factor is so encompassing in its influence that it directly impacts each node of the logistical process—product packaging.
Product packaging is no longer just about putting goods in a cardboard box. Considering how everything is optimized, product packaging serves multiple functions that impact distribution, warehousing, and both business operations and consumers’ actions.
Therefore, optimizing product packaging also optimizes the efficiency of the supply chain, all while bringing down waste output and saving on operational costs.
Here are the many ways product packaging affects the supply chain:
Efficient Packaging Mitigates Returns Due to Item Damage
According to Amcor, the average retailer loses 4.4 percent in revenue because of items that cannot be resold or have to be discounted due to packaging-related issues. A whopping 34 percent of product returns result from item damage. And in 2016, Amazon suffered a loss of 7.2 billion due to shipping-related concerns.
Lesser return instances diminish the stress on reverse logistics and reduce waste output that comes from unused products.
As a business owner, you have everything to gain from doing due diligence in researching better ways to ship your goods. Item damage is not only costly logistically wise, but it can also dent your reputation as a business.
The Right Packaging Allows Easy Product Storage
Storage efficacy is essential, especially if you’re shipping internationally and your product has to go through multiple storage points. Storage requirements vary per location. It helps to look into these policies first to avoid shipment delays that are detrimental to your business.
Packing your products correctly to accommodate the challenges of long-term storage is also a wise move. This is a huge concern, especially to those using a dropshipping model, where your products may need to be stored in a warehouse for a long time.
For example, uniquely shaped packaging may grab attention, but it may not necessarily be stackable, which means it may take up a lot of space to store. That is why brands often package their products in square or rectangular boxes that allow for maximizing every inch of space. Additionally, boxes and outer packaging should be just the right for the product to minimize waste of space and damage during storage and transport.
Adequately packaged goods help save warehouse space and allow goods to be efficiently stored with lowered risk of handling damage.
Good Packaging Helps Efficiently Transport Products
How the product is packed also affects transport space. Transport space translates to cost. Packing your goods in a way that saves space not only helps you save on shipping costs but also makes transporting bulk products more efficient.
Sizing matters when it comes to shipping products. The bigger the packages, the more space they need, the fewer parcels will fit in a vehicle. If too many bulky items are scheduled for delivery, the carrier will need more vehicles (or a bigger one) and people to deliver all items on the same date. Or the courier may have to make multiple trips to the depot to pick up more packages to deliver.
Carriers also charge more for bigger packages, which they refer to as dimensional (DIM) weight. If you want efficient transport and cost-effective shipping, every inch matters.
Packaging Sells the Product
More businesses today are benefiting from the the power of custom packaging to amp up branding. A properly packaged product lends originality, giving end-users or consumers the impression that the product they are buying is done with care and of quality.
A custom packaged product also sets it apart from the competition and helps cement brand loyalty for your business.
When businesses care, the right products reach the right customers, incentivizing attention to quality, which benefits both business and customer.
Good Packaging Helps Consumers Use Products Properly
Proper product packaging includes essential details informing end-users how to use, handle, store, and dispose of the product correctly and safely. When products serve the consumers’ needs, it mitigates additional demands that might otherwise result from the inadequate use of the product.
This means efficient use of resources and no unnecessary stress on the already strained supply points.
With more people coming online to purchase goods and services, the global retail industry is only expected to continue its upward trend.
Thanks to the increasing availability of digital and physical infrastructures worldwide, it’s now easier than ever to respond to consumer demand via the global supply chain.
Gone are the days when packaging was just a minor detail in a business’s overall operations. Today, we know that product packaging influences every node of the supply chain and, therefore, plays a crucial role in improving the efficiency of its processes.
Paying attention to the quality of your packaging might seem like a small, low-return process, but the increasing shift toward conscious consumption paints a new reality. When efficiency is the question, optimized packaging provides the solution.
About the author
Danielle illuminates the stories of innovative, purpose-driven brands with thoughtful strategies that empower growth.
With a BA in Cinema & Television, Danielle takes a holistic and comprehensive approach to develop story-driven content, branding, and marketing strategies that captivate the right audience.