Packaging operation costs often lie below the surface
As retailers around the country start to prepare for the seasonal scramble, Antalis Packaging is advising businesses to beware that when it comes to packaging the majority of costs are hidden beneath the surface.
Most retailers will have begun preparing for the lucrative final three months before Christmas. Largely coined the golden quarter, it is the period in which many companies will make over half of their overall annual sales. However, in recent years there has been a distinctive retail shift – exemplified by Black Friday generating 28 per cent more orders in November than December in 2016 – and so the onus is on retailers to get operations in order for an even earlier rush.
Additionally, a rise in the price of imports, the minimum wage rises for workers aged 25 and over, plus the government’s ‘apprenticeship levy’ and Brexit have all contributed to retailers are facing huge pressures on controlling costs in 2017.
In response, Antalis Packaging is warning retailers about the ‘iceberg effect’ in a bid to help retailers save on packaging. The company has labelled this warning the ‘iceberg effect’ to highlight that the majority of packaging costs lie beneath the surface. Antalis advises that failing to understand this can result in businesses making decisions that are a false economy.
Stephen Herring, key account manager for packaging at Antalis, said, “The traditional retail dynamic of demand building up to Christmas has been dramatically altered by a host of opportunities that have created a much earlier surge of pre-Christmas shoppers. This means that retailers must be prepared for a seasonal spike in demand sooner than ever before and getting packaging operations in ship-shape is key to delivering a successful retail period.
“When identifying the cost of packaging many will only see the two most visible elements: packaging materials and packaging machinery. However, there are a host of hidden costs that retailers can review to optimise delivering efficiencies and reduce costs ahead of the retail rush.
“For many, the inclination may be to recruit more staff in order to keep up with demand, but investing in alternative solutions such as self-erecting crash-lock boxes for faster operative packing or automated machinery may be able to speed-up operations, negating the need for extra support.
“Equally, storage costs can be improved by ordering smaller volumes for regular delivery. Not only does this free up valuable warehouse space, it also means packaging materials won’t get grubby while in storage.
“As with many business disciplines, we want to remind companies that there is more to packaging costs than meets the eye and going for the cheapest option, ultimately, is often a false economy. To help retailers improve their packaging operations we offer a free packaging audit, which can identify those costs below the waterline. We invite anyone looking to save costs to challenge us to find the right solution for their business,” concluded Herring.
As a business committed to helping customers perfect their packaging, Antalis offers a free smart audit whereby a packaging expert will visit a site and make recommendations for improvements. This has already made a big impact on customers so far, one company was able to reduce the packaging costs by 70 per cent following the introduction of a semi-automated pallet wrapper. Another customer was able to downsize their warehouse by as much as 30 per cent.