Benefits of Outsourcing Your Packaging with a Contract Packager
What if you could grow your business while reducing your overhead easily?
As a manufacturer or distributor of consumer packaged goods, your business faces many challenges. Seasonal swings in consumer demand and holiday promotional pushes require a flexible labor force and a flexible production floor. These swings cause fluctuating costs at different times of the year. Managing these ebbs and flows is only a small piece to the greater puzzle that makes up your production .
Working with a contract packager to manage the packaging and distribution of your products can help you focus on what you do best while providing many other benefits that will improve how you do business.
The following expands upon some of the ways that outsourcing your packaging processes can help you build your brand with more control while utilizing less capital to do so.
1. Reduced Operational Costs
One of the most obvious benefits to an outsourced packaging operation is reducing your overall costs of operations. A quality contract packager can take on all of your packaging processes and handle them in a separate facility or at your own, if preferred.
Many manufacturers facing space constraints find outsourced packaging extremely beneficial to ramping up their business to produce more internally or to expand upon their current product lines. If you outsource in a separate facility, the costs associated with your packaging processes will become a part of the fixed-cost partnership .
Think of the free space available in your facility. Now visualize the additional space that you could gain by removing the packaging lines from your internal production.
Large brands with big productions or multiple product lines will find outsourcing parts of their production a practical necessity for growth, especially when it comes to labor management. A co-packer will handle the hiring, training, and managing of the labor force required to package your products, reducing a significant portion of your operational costs.
Having these employees off of your own payroll provides additional savings for your business with less overhead cost required for each one. You will no longer need to manage health coverage, wages, or any of the other costs that are associated with an internal employee. A co-packer will have their own selection of trained labor readily available to take on your projects, whether they are seasonal or year round.
2. Ability to Focus on Core Business
Outsourcing relieves many of the tasks you must manage every day. Your primary objective is your product line. What if you could simply focus on that?
A contract packaging business primarily focuses on taking your product and placing it in a primary or secondary package. Depending on their capabilities, they may be able to help manage more of your supply chain by providing turnkey end-of-line solutions. They will manage your inventory, acquire the specific packaging materials required to package and protect your products and distribute them to your end-user, retailer or distribution centers while you grow your brand.
Your core competency may be managing and plant floors, developing your product line, or your growing brand as a whole. A co-packer can free the time you spend on your packaging processes and for you to focus on what you do best. Imagine being able to spend more of your time making your plant operate more efficiently, building your core accounts, or creating new products and expanding into new verticals.
3. Increased productivity
Working with a professional contract packager will improve your overall efficiency and speed to market. A great way to maximize the increase in productivity is to involve them as early as possible in your product development. The more they understand your business and your needs/requirements ahead of the game, the better they can prepare for your projects and align their timelines with yours. This will help you keep your inventory moving and reduce the amount of time it takes to get the products to the retailer or the consumer.
They will preferably have relationships built with their freight carriers so they can plan ahead to receive your product and get right to work and distribute as you see fit.
4. Expertise and Compliance
Find a co-packer that holds the certifications that will maintain or improve your brand identity. If you are manufacturing or distributing food products, food safety is of utmost importance. If the contract-packager you choose has certifications that meet the regulations set for your particular food, you can be assured that they are consistently working to maintain that certification.
These certifications may include SQF (Safe Quality Foods) or AIB (American Institute of Baking). These types of certifications will hold unannounced audits at the co-pack facilities to ensure food safety and compliance regulations are met at all times.
A contract packaging company has expertise in all things packaging and strives to maintain quality for your brand and your products.
5. Use Less Capital
You won't have to spend money on large capital investments! New machines to keep up with demand will not be an issue when you outsource your packaging with the ideal co-pack candidates. They will often have the packaging machinery already in their facility, or they will purchase the equipment to complete your projects so you can preserve your business capital.
Rather than spending capital on more space, they will have the access to flexible, clean warehouse space that can be short-term or long term. This is their forte, so they will have relationships with realtors that can find space quickly.
Don't forget about the skilled and trained labor force they have available that you will provide you with an economical, fixed cost solution.
In most cases, they can provide your business with more freedom and space while reducing your overall costs. Depending on your business needs, this freedom and flexibility will allow you to downsize at your own facility or expand your business.
Considering that packaging is one of the most important pieces to marketing your product, working with a professional contract packaging company is an excellent option to improve your production costs and your growth.
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About David Roberge
Part of the outstanding Industrial Packaging team. I'm lucky to hang out with some of the most knowledgeable folks in the packaging industry. I feel even luckier to be able to share our knowledge with you. I love learning about and helping readers grow their brand through unique, flexible package design from the birth of the product idea, through the supply chain and to the launch and placement on the shelf or at the consumer's door.