Contract Packaging for Ecommerce: Everything You Need to Know

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As the owner of an e-commerce company, your livelihood hinges on your ability to deliver customer’s orders safely and swiftly. The key to ensuring that you achieve this goal is to develop an efficient packaging strategy that reflects the types of products that you sell. Below is a detailed look at the packaging process and the single best way to ensure that you choose the best type of packaging for your small parcels. Be sure that you engage your e-commerce fulfillment company if you outsource so that they can partner with you in the planning process as well!

Contract Packaging for E-commerce

What Exactly Is Packaging?

The packaging is the final phase of the e-commerce order preparation process. The purpose of packaging is to ensure that the products a customer purchases arrive safe and intact upon receipt. Further, the packaging is an all-encompassing process that involves three basic elements:

  • Shipping containers such as boxes, padded envelopes, mailing tubes, and flat chipboard mailers
  • Internal packing materials such as bubble wrap, styrofoam sheets, poly bags, and biodegradable cornstarch peanuts
  • Embellishments such as printed inserts, tie-on tags, stickers featuring a logo, and customized tissue wrap

By selecting the proper container, packing material, and embellishments for your shipments, you will help safeguard against shipping damage while illustrating your commitment to quality. More importantly, you will increase customer satisfaction and grow your repeat business.

What Is a Contract Packaging Company?

A contract packaging company, also known as co-packing, is a third-party business that provides packaging services to other companies. Essentially, they take manufactured products and package them for distribution or sale. Contract packaging companies have the expertise, equipment, and space to package products efficiently, accurately, and quickly.

A company specializing in packaging can help other businesses with different packaging services like custom designs, labels, and packaging of individual or bulk items. In addition, they can help package different kinds of products, such as food, cosmetics, and electronics.

By using a contract packaging company, businesses can focus on making and selling their products while saving time, money, and resources.

What Are Examples of Contract Packaging?

Contract packaging is when a company hires another company to package its products. Here are the different types of contract packaging services that companies offer to help other businesses package their products:

  • Food and drink packages like candy, snacks, and beverages.
  • Pharmaceutical packages, like labeling and repackaging.
  • Health and beauty product packaging, like bottling and labeling.
  • Industrial product packaging like kit assembly and shrink wrapping.
  • Packaging for online orders.
  • Promotional packages like gift sets and product samples.
  • Displays for stores like assembling and packaging products for sale.
  • Special packaging for club stores, like bulk packaging and labeling.
  • Packaging for dangerous materials that follow government rules and regulations.

Contract packaging can cover many other types of products and industries too!

What Is the Difference Between Contract Manufacturing and Contract Packaging?

Contract manufacturing and contract packaging are two different ways for companies to outsource certain aspects of their operations.

Contract manufacturing is when a company hires another company to make their product according to specific instructions. This can include sourcing materials and packaging, but it’s only sometimes required.

Contract packaging is when a company hires another company to package its product according to specific instructions. The company provides the product and packaging materials, and the contract packager assembles and packages the product.

Contract manufacturing is about making the product, while contract packaging is about getting the product ready to be sold. But, if you want to outsource your packaging needs, a co-packer might be the right choice for you.

What Are the Benefits of Contract Packaging Services?

There are several advantages of using contract packaging services, some of which include:

  • Cost Savings: Opting to outsource the packaging process to a contract packager can help you save money on labor, equipment, and materials. In addition, contract packagers can leverage their economies of scale to get better pricing on materials and equipment.
  • Expertise: These packages have specialized knowledge and expertise in the packaging industry, which can be used to design and optimize packaging solutions for specific products or industries.
  • Flexibility: Contract packagers can be flexible in their services, offering different packaging options, materials, and equipment and adjusting their capacity to match the changing demands of a business.
  • Time Savings: Employing contract packagers can streamline the packaging process, resulting in quicker product launch times and helping businesses remain competitive by meeting customer demands more efficiently.
  • Quality Control: Contract packagers have strict procedures to ensure products are packaged correctly and of high quality. This helps to lower the chance of products being damaged, returned, or recalled.

What Types of Products Can Be Packaged Using Contract Packaging?

Contract packagers can help package a lot of different things. For example, they often help package food, including snacks, drinks, and baked goods. Personal care items like lotion, makeup, and soap can also be contract packaged. Contract packagers also package things like medicine and medical equipment that need special packaging.

Some contract packagers focus on packaging industrial products like car parts, tools, and electronics. Additionally, contract packagers often package promotional products, such as gift baskets, seasonal products, and subscription boxes.

In general, any product that requires packaging or repackaging, labeling, assembly, or kitting can be packaged by contract packagers. The flexibility and customization offered by contract packaging services make it an attractive option for many businesses, whatever industry they operate in.

What are the Different Specialties in Contract Packaging

Contract packaging companies offer various specialties that cater to the specific needs of their clients. Here are some of the different specialties in contract packaging:

  • Food Grade: When putting food into packages, specific rules must be followed to ensure it’s safe and hygienic. Companies specializing in food packaging ensure the food is packaged to protect it from germs and bacteria.
  • Co-Fillers: These companies are experts in putting products into containers like bottles, jars, and bags. They can also help with putting on labels and assembling things.
  • Bottlers: These companies specialize in putting liquid products into bottles and labeling them. They have special machines to do this quickly and efficiently.
  • Blister Packaging: This particular type of packaging uses plastic to hold small items like pills and small parts. The plastic is sealed to a backing card.
  • Custom Packaging: This process involves making special packaging that fits a specific product perfectly. It can include using unique shapes, sizes, and materials.
  • Point of Purchase (POP) Display: The goal is to create attractive displays in stores that grab people’s attention and make them want to buy the product. The displays are designed to be visually appealing and capture people’s interest.

What Is the Contract Packaging Process, and How Does It Work?

The contract packaging process involves several steps, from initial design to final production. Here are the typical steps involved in the contract packaging process:

  • Consultation: Talk with the contract packaging company to discuss what is needed, like product details and when it needs to be done.
  • Packaging Design: Create a packaging design including type, size, material, and branding. This is usually done with the client to ensure the packaging fits their needs.
  • Material Procurement: Get the materials needed from good sources like packaging and labels.
  • Assembly: Put everything together by filling, labeling, and packing the product as the client wants.
  • Quality Control: Find out the packaging quality to ensure it is what the client wants; more importantly, it meets industry standards.
  • Shipping: Send the packaging to the client or the next stage of the supply chain once it’s been checked and approved.
  • Post-Production Services: Some contract packaging companies offer extra services like storing the products, fulfilling orders, and shipping.

The contract packaging process is customizable and flexible to fit your needs. The process accommodates various products and packaging types, from food products to pharmaceuticals.

Do Contract Packagers Also Offer Fulfillment Services?

Most contract packagers do not offer fulfillment services, but some do. Fulfillment services involve storing products and shipping them directly to customers.

However, it is essential to note that contract packagers are typically better at contract packaging than fulfillment services. Therefore, ensure that the contract packager you choose has the necessary experience and resources to offer fulfillment services if required.

How Much Does Contract Packaging Cost?

The amount of money you need to pay for contract packaging depends on the kind of packaging you want, how much stuff you have to package, and how complicated the process is.

Usually, the packaging company will charge you per hour, anywhere from $50 to $150, depending on where and who they are. Sometimes, they might charge a set amount for creating the packaging design or ensuring its quality.

Some companies may charge a flat rate for certain services, such as design or quality control. Additionally, some companies may charge extra fees for services such as unique materials or equipment.

It is vital to get a detailed quote from the contract packaging company that outlines all costs and fees before making a final decision.

Why Is It Important to Have a Strategic Packaging Plan?

With the packaging process being the final touchpoint of the order preparation process, it is your final opportunity to make a positive impression on the customer before the parcel is shipped. It also represents your last chance to ensure that the merchandise is properly protected and professionally packed. Again, the best fulfillment warehouses will be able to assist you in developing this plan. Here are three key reasons why you should think strategically about packaging:

  • Maximize Safety: Protecting merchandise should be your top priority. Ideally, you want your merchandise to be packaged snugly.
  • Decrease Shipping Costs: Your carriers will base their prices on the size and weight of your parcels, so efficient packaging is a must to drive down your overall fulfillment costs and pricing.
  • Minimize Shifting During Transit: When packing products, you should select filling that protects product surfaces while absorbing shock.
  • Brand Differentiation: When you add special touches, you separate your overall brand experience from that of your customers and help build lifetime customers and obtain great reviews.

In addition to the three reasons above, you also need to consider the dimensional weight of some of your packages. Also known as “DIM Weight” or “Volumetric Weight”, dimensional weight is an estimated weight that is calculated by considering the length, width, and height of your package. Commercial carriers often use the dimensional weight to provide their freight rates, so it is important not to use a carton that is excessively large.

What Are the Most Common e-Commerce Shipment Categories?

If you are relatively new to the fulfillment and shipping industries, you may wonder where your e-commerce products will fall on the packaging spectrum. There are a number of different types of products for fulfillment. In general, e-commerce shipments fall into one of the following four categories:

  • Small or foldable items: Examples include socks, underwear (and other clothing and apparel fulfillment products), mousepads, and other items that are not prone to damage and require little fill.
  • Flat or thin items that are easily damaged: Compact discs, commemorative photos, and posters would fall into this category.
  • Larger products or collections of items: An order for ten binders or one for a knife set and cutting board are examples in this category.
  • Items that are large, heavy, bulky, and fragile: Examples include large fragile vases, large glass items, and lamps.

What Are the Most Popular Types of Outer Packaging Used for Shipments?

Packaging manufacturers are continually adapting their product lines to reflect purchasing trends and carrier capabilities. E-commerce specialists are now able to choose from more packaging solutions than ever when developing their packaging strategies. Here is a summary of the main types of outer packaging used with e-commerce shipments:

  • Envelopes: Apparel and flexible products that cannot crack or break can ship easily and affordably in an envelope. Depending upon the carrier, envelopes range in size from 6 1/8″ x 11 1/2″ to 12″ x 15″. They are typically no more than 3/4″ thick.
  • Bubble Mailers: Bubble mailers look like a regular large envelope on the outside but feature a protective layer of bubble wrap on the inside. They are often used to ship CDs, books, jewelry, and other small items that do not break easily.
  • Flat Chipboard Mailers: Flat products such as art prints that require sturdier packaging than an envelope or bubble mailer are often shipped in flat chipboard mailers. They often feature a self-seal closure for easy shipment.
  • Fold-Up Mailers: Fold up mailers look like small, flat boxes. They are able to accommodate thicker books, frames, and items up to 4 inches thick. They can often be purchased in completely flat condition for quick assembly at the time of shipment.
  • Standard Boxes: The majority of larger merchandise ships in standard boxes. Common box sizes include 12 x 12 x 12 inches, 16 x 16 x 16 inches, and 24 x 24 x 24 inches. Many companies order custom-sized boxes to accommodate their specific mix of products.
  • Multi-depth Boxes: Companies that ship items of varying sizes are increasingly turning to multi-depth boxes. These boxes feature visible creased intervals on their exterior that enable them to easily be trimmed and folded down at a crease to yield a smaller box size.
  • Double Wall Boxes: The hallmark of a double wall box is two layers of fluting instead of just one. The result is a box that is sturdier and able to house heavier and more fragile items. Items that require more protection than a standard box can offer are ideal for double wall boxes.
  • Long Boxes and Mailing Tubes: Long corrugated boxes or tubes are a great option if you regularly ship longer merchandise such as golf clubs, fishing poles, rugs, or floor lamps. Typical lengths range from 49″ to 90″ with widths ranging from 4″ to 12″.
  • Cargo Boxes: Cargo boxes are the safest option for larger or heavier items such as cabinets, trade show displays, and machinery components. They usually feature a padded or insulated interior and a durable, rugged exterior that is highly resistant to impacts and moisture.

One important thing to keep in mind is the difference between standard cartons versus corrugated cartons. Corrugated boxes are made up of corrugated paperboard that contains rows of air columns. The columns make the paper stronger than average cardboard with the air acting as a cushion for any items inside of them. The ridges inside offer strength and flexibility, as usually intended in packaging. Standard cardboard boxes, by contrast, are made of heavy paper pulp. Therefore, corrugated cartons are stronger and will be much more durable in shipping your e-commerce orders.

What Are the Main Types of Inner Packaging?

The type of inner packaging you choose is just as important as the outer packaging you select. And, as in the case of the outer packaging, there are many options available for consideration. In general, the type of inner packaging you select will depend on your product’s potential for damage and your commitment to an eco-friendly shipping process. Some of the most popular types of inner packaging are as follows:

  • Blank newspaper void fill: This is a cost-effective way to pack items that are highly resistant to damage.
  • Polybags: Polybags are another choice for merchandise with low risk of damage. They are bags used to hold inner items, such as a poly bag used for a t-shirt.
  • Bubble wrap: Bubble wrap became popular in the 1960s and is a popular choice to help protect breakables from sustaining damage.
  • Peanuts (Styrofoam or Biodegradable): Peanuts are often used to fill empty space in a box that houses one or more wrapped items.
  • Foam sheets and wrap: Glass items such as mirrors or pictures are frequently protected with styrofoam sheets and wrap.
  • Expanding foam conforms: Foam can effectively keep fragile items from shifting but it is not eco-friendly.
  • DIY bubble wrap and air pillows: For some companies that wish to add great fill to cartons and need additional support for the contents, DIY bubble wrap and air pillows could be an option. With these two types of fill, you will have to purchase an air filling machine, which makes the upfront costs higher. However, over the long run, if stability is needed in shipping, the upfront costs smooth out over high volumes of orders (as a result, many fulfillment services companies use this option)

When choosing inner packaging for an order, remember that you may need to use more than one type of packing to keep items protected. For example, if you are shipping four items, it may be best to wrap each item with bubble wrap and then place all four items in a box filled with peanuts. Or, you may need to take extra precautions to prevent damage by covering sharp edges with cardboard before wrapping them and placing them inside a box.

What Are Some Additional Touches to Help Boost Your Brand Image?

Sometimes it is the extra touches that really impress customers. In the case of packaging, there are several steps you can take to set your company apart from your competitors. While you can expect to pay a bit more for these extra touches, you will give your brand image a boost and keep your customers coming back to you in the future.

It is important to note that some time should likely be spent on your overall branding before jumping into custom branded packaging options. Some modifications may need to be made to your color scheme or logos/images to make them appear best on packaging. Furthermore, more time must be spent on the set up process, obtaining samples, proofs and approving production. Printing companies will usually offer volume discounts, so be sure to check to see the best price points for your business. In terms of printing, options range from flexographic printing (printing plate stamps the design on the carton, and up front costs include the purchase of the plate), to digital printing (the designs are digitally printed on the carton similar to the use of an office printer), to litho label printing (similar to wall paper, the printing is on a sheet which is adhered to the box, and high volume print runs can be competitively priced).

Below are some of the most popular forms of embellishments:

  • Consider custom printed boxes that feature your logo
  • Include fitted box dividers and inserts to organize shipments of multiple items
  • Use custom tissue paper that features your logo to wrap merchandise
  • Include a printed or handwritten note to the customer with each order
  • Seal stock boxes with stickers that feature your logo
  • Include a promotional insert that features a discount on future purchases
  • Use decorative ribbon or gift tags to elevate the appearance of the merchandise

What Is Eco-Friendly Packaging and What Benefits Does It Offer?

Small Parcel Packaging for eCommerce

Eco-friendly packaging involves the use of recycled or renewable packing materials that are sustainable for people and our environment. As more e-commerce companies adopt eco-friendly packaging strategies, packaging manufacturers have responded by producing a greater variety of cutting-edge packing solutions made from corn starch and biodegradable materials. There are many benefits of eco-friendly packaging, including the following:

  • A reduced carbon footprint
  • Increased customer satisfaction
  • Reduced costs due to reuse of materials
  • An improved industry reputation

How Can You Implement an Eco-Friendly Approach With Your Shipments?

Learning about eco-friendly packaging is a great first step for your e-commerce company. But in order to actually have a positive impact on our environment, you need to take action as a business owner and build an eco-friendly culture. Here are some simple environmentally-friendly measures you can adopt with your packaging:

  • Use recycled materials: Materials such as corrugated cartons are usually over 80% recyclable and can be quick and easy solutions to help the environment.
  • Use starch packing peanuts: Replacing your styrofoam peanuts with biodegradable starch ones will prevent landfill overflow.
  • Invest in convertible shipping containers: Consider ordering some containers that can double as long-term storage for products.
  • Space-efficient packaging: Refrain from using boxes that are overly large to ship packages.
  • Avoid wasting filling: Educate shipping staff on the proper usage of filling and tips to avoid filling spillage.
  • Reuse boxes: Train warehouse staff to recycle boxes and to reuse boxes that are in good condition.
  • Use as little packaging as possible: Be sure that you are “minimalist” in your choices, including no-fuss packaging such as fiber-based or bamboo trays that are sustainable and easier to use.
  • Challenge with your warehouse to help: Sometimes, asking your fulfillment center to get creative can help in the process, such as using boxes that they are recycling and would otherwise go to waste.

Best Practices for E-commerce Packaging

The following trends and best practices for E-commerce packaging can help ensure your customers will enjoy receiving and opening a package from your business:

  1. Consumers love eco-friendly packaging that is either sustainable, recyclable, compostable, or biodegradable. It is important to let the consumer know your business has instigated a ‘zero waste’ shipping program that reduces the carbon impact on the environment. Moisture resistant options for earth-friendly packaging are available with excellent crush protection for shipped goods, such as post-consumer waste (PCW) corrugated boxes, Kraft and newsprint paper, and biodegradable cellophane wrap.
  2. Package inserts are a low-cost way to target loyal customers and can yield high returns, as the cost of delivery is already covered. It is much easier to keep an existing customer than it is to generate new business. If customer retention is a prime objective for your e-commerce business, a packaging insert can be an opportunity to launch a new product, offer additional discounts on future purchases, or to simply include a personalized ‘thank you’ note.
  3. Packaging design moves the shipping container from a brown box or plain bag to a distinct and specialized branding opportunity. This trend is increasing in popularity with high-end and luxury goods retailers. E-retailers that make the packaging design an extension of their corporate brand, that is incorporating the brand color palette, company logo, and text fonts, create an opportunity for the consumer to value the consumer experience as these containers are more apt to be retained for future uses.
  4. No-Fuss packaging follows the ‘less is more’ rule, and seek to provide frustration-free, stripped down packaging independent of plastic-welded clamshells or blister packs. Viable alternatives for protective shipping which eliminates the ‘unwrap-rage’ of clamshell packaging includes fiber-based or bamboo trays that are not only sustainable but easier to open.
  5. Multi-purpose packaging serves the dual role as a shipping container and product storage or presentation medium. This option has traditionally been aimed towards the B2B market rather than B2C, as the shipping package can be immediately converted into retail-ready displays. Yet, as consumers are buying more household dry goods online and in bulk, marketing of the shipping package as a convenient and efficient storage container will appeal to the orderly sensibilities of shoppers.
  6. Space-efficient packaging has become a notable request from consumers who don’t understand why small items are shipped in oversized boxes and filled with any variety of dunnage materials. Ensuring the shipping container is sized properly for its contents is economically reasonable throughout the logistical chain. Unused or vacuous space within packages contributes to environmental waste, reduces useable cargo space for carriers, and increases shipping costs. Solve this issue and improve your fulfillment costs by increasing the variety of box sizes your company keeps in stock for shipping to reduce the amount of unused space per shipment.

Reducing shipping costs, gaining loyal customers in an increasingly competitive environment, and sustaining a high level of customer satisfaction and review feedback, are just a few areas where any e-commerce business can gain improvements by modifying their e-commerce packaging.

What Is the Single Best Way to Ensure You Choose the Proper Packaging?

As outlined above, there are many factors to consider when packaging small parcel e-commerce orders for shipment. From choosing minimizing costs to championing our environment, to personalizing your orders, the small parcel packaging process is full of big decisions.

The single best way to ensure that your parcels are properly packaged is to seek the guidance of a trusted fulfillment company. An experienced fulfillment specialist will assess your product offerings and recommend cost-effective packaging solutions that are durable, space-efficient, and environmentally-friendly.

For over 15 years, the specialists with Fulfillment Companies have helped businesses across the globe find fulfillment specialists they can trust. Our strength is our ability to help you select the fulfillment provider that offers the best location and mix of services for your business. In addition to our expert guidance, we offer a wide array of resources to assist you in the decision-making process.

Whether you’re looking for fulfillment services for start ups or ship thousands of orders per month, we invite you to contact us to discover why companies turn to us for guidance in selecting the best fulfillment solution for their needs. We look forward to helping you streamline your e-commerce packaging!

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