If your packaging supplier only talks with you about getting the lowest landed cost, you’re not alone. It is the easiest and often most expeditious way for a sales rep to solve a problem (and for you to keep nonproductive rep’s visits short!)
Cost focused reps believe they bring value through the transaction. When this sales rep learns their price is too high, they will use that information to go back to their company and try to match or beat their competitor. They get the order, you get the lowest price (even if it means you may have to buy more than you need)… Score! Wait… really?
While your direct product costs are abundantly important, the savings only has value for that moment in time, and it just may not be the best indicator of whether or not you are getting the best solution, or savings, for your organization. If you want to save money and improve cash flow for the long term, it’s essential to take a much broader perspective - and expand “cost” to include the total cost of packaging.
The right packaging supplier will treat the product cost as one of a series of components in their equation to add value. They know that saving a few pennies or dollars on a given order may be costing you far more in the long run. Your total cost of packaging includes everything that goes into the selection, procurement, receiving, payment, storage, packaging, assembly process, transportation, and delivery of your product. Each activity has a cost. When a packaging solution takes these activities into account, your overall savings and the impact you make on your organization’s efficiency, working capital and cash flow increases substantially.
Packaging can make you a better marketplace competitor. Here are some of the considerations a certified packaging specialist focused on adding value will take into account when designing your packaging solution.
Reduced Damage, Improved Safety
Every return, damaged box, leaker, torn package, or broken product impacts your profitability and, potentially, your brand. Can returns or damage be minimized by a redesign or reengineering the materials it is made of? Fit-for-purpose packaging helps you reduce your return and damage rate, lowers labor costs, reduces packaging inventory, controls transport costs, and extends customer satisfaction.
The more people, activities, and components involved in packaging management and supply – the higher the total cost of packaging. The value-focused packaging supplier will look for ways to streamline your activities to free up resources, money and cash flow.
Freight costs are often unavoidable; however, it is worth asking how freight costs can be minimized to reduce impacts on your cost and margins.
Storage and Inventory Management
A packaging specialist can manage your inventory for you, reduce your inventory costs and more. These services can reduce the time, effort, space, and costs that come with packaging storage and inventory.
Speed to market is a crucial driver for businesses today. Small slow-downs, extra steps, and ease-of-use all impact your ability to maximize your packaging productivity and ability to serve customers quickly.
The simpler, better organized, and more efficient your packaging processes are, the lower your total costs of packaging.
Lowest Cost is Not the Best Cost – Know What You’re Getting
While product cost is critical, if it is the only solution your sales rep is bringing you, you are likely losing out on savings, efficiencies and cash flow. Challenge your packaging sales reps to help make your packaging work for you.
To learn how SupplyOne’s certified Packaging Specialists you can amp your savings, productivity and working capital contact us or give us a call today 484-582-5005.