Saving a Few Pennies Today May Cost You a Few Dollars Tomorrow

Everyone has experienced it. You go to the store and the item you want is dented. You search around for one that is not, and when one cannot be found, you then debate with yourself if you will buy the dented item or go somewhere else to find the product in pristine condition.

Many products often have inferior packaging. Perhaps manufacturers are thinking about the normal handling of packages within their facility and failing to realize how the package may be handled throughout the supply chain. Packages traveling via an integrator, such as FedEx or UPS, are flying down conveyor belts and chutes at a very rapid pace. If they did not, they would not be able to deliver those millinons of packages each day. Packages are getting cross-docked and handled multiple times, so the packaging should be durable enough to withstand the handling and tossing around it may encounter during transit.

While costs may be trimmed, whether unintentionally or not, when it comes to packaging, those “savings” should be measured against all the costs incurred when a package is damaged.The damaged product may incur transportation fees to be returned, fees or labor rates to process the return, possible destruction fees, and costs to send a replacement order, again inclusive of labor and transportation.

The most important factor is client satisfaction. What if the customer becomes aggravated with the frequent damages and seldom receiving their full order intact? Does someome make a competitive product? What happens if you lose customers and market share? At the end of the day, what did you save?

Now, let’s consider products you contract someone else to produce. The manufacturer is selling the product to you for a cost. Any savings related to packaging goes directly to them while the expenses of dealing with inferior packaging are solely absorbed by you. It is your name on the product and your reputation at stake. What is that worth to you?

When producing or acquiring a product, be sure to evaluate the packaging carefully. Otherwise, saving a few pennies today could end up costing you a few dollars tomorrow!