Packaging is a topic that literally every e-shop owner has to deal with now. With the volume of sales, the demands of packaging to limit complaints and returns are increasing. E-shop owners are asking themselves how to package safely but at the same time have affordable packaging. We are interested in what challenges our customers are dealing with. We've put together an article to provide practical guidance for proper packaging at different stages of business development.
As the e-commerce market grows, there is a growing need to adapt packaging to the changed landscape. This is because there is a growing segment where there is a demand for smaller one-piece and atypical shipments. Major shipping companies (such as UPS and DHL) index shipping costs based on package size instead of weight. They refer to this value as dimensional weight. Therefore, it is at this point in time that the production and logistics department is addressing the issue of atypical and bundled shipments. The classical way of thinking looks at the subject is as follows:
In contrast to this method of packaging is the 'Box on Demand' custom packaging technology, i.e. customized packaging without the use of internal filling material.
In a classic standard situation, you need to define the needs of the design, material type and cardboard parameters. A high investment will also fall on the die-cutting mould. The use of die cutting often makes sense from a certain minimum order quantity (MOQ). Such a quantity not only puts a strain on the cash-flow but also on the stock space for start-up or small e-shops. An e-shop owner would usually prefer to see a warehouse full of shipped goods instead of packaging and fillers.
In contrast, the technology stands for 'Box on Demand' or 'customized boxes' (on the Czech market, the BOX48.cz platform offers the production of customized boxes - instant online calculation, box price comparison, 95% of orders are produced within 48 hours). This technology can offer even a fledgling e-shop or startup the luxury of producing a customized box without excessive pre-stocking. With smaller just-in-time order quantities, complicated multi-sort packaging can then become 'IKEA style' in a very short time.
But this e-commerce packaging does not want to compromise on product protection. In addition to reducing stock space, the e-shop owner can ensure that internal fixings are eliminated. Suddenly the customer gets a completely different product. He sends the customer a one-of-a-kind eco-friendly package with sufficient protection. Which is actually what he wants from the beginning.
He can even use this packaging to provide more protection for the goods in transit. This eliminates claims due to the quality of the carrier's packaging, and overall, lower shipping costs are paid due to the lower volume. Such packaging does not require complicated assembly and handling.
For large, fast-growing e-shops with thousands of orders per day, traditional carton production makes more sense. Depending on the size and dimensions of the goods, the minimum orderable quantity (MOQ) is in the order of 1000-2500 boxes.
While such e-shop packaging is standard (requiring, for example, the use of paper, plastic or fillers), it has the advantage of lower purchase prices per unit of packaging.
Once an e-shop exceeds units of thousands of orders per day, it is usually no longer certain that some form of packaging automation can be used. The standard in this area is to connect to an ERP/WMS system using a WCS (Warehouse Control System).
In these volumes, inserting invoices/brochures, printing shipping labels, weighing packages, printing without the use of automation technologies is usually unrealistic and would cause inefficiencies in the smooth flow of the order through the system. But of course, the pressure on production and logistics managers also comes from the end customer. They expect branded, eco-friendly packaging, personalisation and reliable product protection. But packaging efficiency and economy do not always go hand in hand with these requirements.
Packaging safety and returns management are very close to each other. Although not obvious at first, returns management is a critical component of online business. When it comes to returns, returns can be handled by re-selling the goods. However, customers usually return goods in improper packaging, which ultimately increases the % of bad debt (damaged goods in returns). As we have already informed - the value of returned goods (which cannot be returned to circulation) also decreases.
On the other hand, by using boxes with precise dimensions, you can maintain the value of the returned goods. The key then is the increased protection of the goods in the packaging. The customer returns the goods intact and even in the packaging in which they came. Such goods can then be easily restocked, repackaged and quickly prepared for dispatch.
Automation and optimization of packaging management is the focus of the Panotec.cz website. We present an anti-slip program for optimization of pallet units on the Antislip-paper.cz website.
If you are interested in these issues and are dealing with scaling in your growth phase, we will be happy to advise you at poptavky@packung.cz.
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