Part 2: Hidden Costs
In our last post we discussed using packaging to not only protect, but promote your product. A great logo is a statement (think the iconic Apple on the iPhone box) that really helps sell the product, and packaging will help you do that. Where your goal is to give the recipient a unique experience when the package arrives, the unboxing should be special too.
However, the bottom line is also a consideration, and there is more than one way packaging can cost you. To successfully walk the line between cost and marketing, let us first take a deeper dive into some of the obvious, as well as more hidden costs involved with packaging. Whatever your decision, we believe the best decision is the informed decision.
There are many customers that appreciate durable containers that come with something they ordered so that they can reuse it around the house. But remember, the more durable the package, the higher the cost. Ordering in bulk direct from the manufacturers will bring your price per package considerably lower, and it is a great option to consider once your sales are looking up and you can take advantage of those economies of scale.
The less apparent cost is the cost of shipping. While durable packaging can be a plus for the customer, the downside for a business owner is going to be dramatically increased shipping costs.
First off we have to consider the weight of the packaging, as shipping companies obviously charge by weight (see pricing chart from the USPS.)
The other thing they charge for is called “dimensional weight.” This is ostensibly a surcharge assessed on the size of the parcels. The charge varies by carrier, but all shipping carriers use a variation of this charge.
While you may not think the weight or size is significant, it really can be. Firstly, carriers group charges into tiers of weight and size. An ounce or two, or an extra inch, can bump your product out of the most economical range, and your costs can balloon from there. So while a hard plastic container with a cover sounds cool if it bumps us to the next bracket it might not make financial sense.
Another factor to take into consideration is bulky items or irregular packaging. UPS has a handy page with instructions for calculating your irregular package here , and we have seen many business owners taken aback at the added cost due to the shape of the packaging.
Secondly – and here’s where our experience in packing and fulfillment plays a huge role – in order to ship the item correctly, the product must be able to fit into a shipping-ready box or mailer. The larger and bulkier the packaged item, the larger and heavier the shipping package must be. Now, not only will you need to account for the cost to ship the item itself, you will need to add the weight and size of the outer shipping packaging, (and the cost to buy that box) to your final shipping cost.
As our society becomes more conscious of the impact our choices have on our precious planet (according to a study done by Stanford University we discard our own weight in packaging every 30-40 days on average,) many corporations and businesses are analyzing how to limit the negative effect caused by packaging.
No one wants feels good discarding packaging, especially durable materials that can sit around in landfills or oceans for eons. A study by Virginia Tech estimates that 30% of municipal waste comes from packaging material. Conscientious entrepreneurs means making responsible packaging choices. (For more on how to reduce your carbon footprint when shipping see epa.gov.)
When choosing a package for your product, consider ease of use as well. Remember trying to open a new CD? Or that new pair of scissors that needed, yes a pair of scissors to open it? We don’t want that unboxing excitement getting ruined by frustration (and pauses in YouTube tutorials.)
Finally you don’t want to put anything that will be hazardous to children and pets. (If it is unavoidable be sure to include a warning.)
In our next post we will be offering solutions on how to creatively make good use of your products packaging while keeping your costs minimal.