What Are Contract Packaging or Co-Packing Services and Why Use Them?
The primary goal in a product-based business is to get products into customers' hands. Once products are manufactured, assembled, and produced, they will need to be packaged. Some companies don't have the capital, labor, or time to buy the equipment and package products in-house.
Contract packaging or co-packing services allow packaging companies to prepare products for transport or shelves with professional packaging. Contract packaging is available with many different options. Clamshell or other forms of rigid packaging are available with some contract packagers. Flexible packaging including shrink wrapping and flow wrapping are other popular packaging services. Co-packagers can help fill bottles, containers, and packets of consumable products. When the products are complete, they are master-packed and prepared for shipping.
What Are the Benefits of Contract Packaging?
The benefits of contract packaging begin with time savings. Packaging products can be time-consuming and eat up work hours. Below are a few benefits of contract packaging.
1. Contract Packaging Saves Money
One of the primary reasons businesses use contract packaging is because it is cost-effective. It costs a lot of money to buy the equipment and pay for labor to perform in-house packaging. Packaging involves machinery, work, materials, logistics, and warehousing, and it can cost thousands to get started.
When utilizing contract packaging, no equipment is needed. Labor savings alone should be enough to look at contract packaging as an option. If you are already packaging with less efficient machinery, the total labor savings can increase overall product costs.
If considering contract packaging, calculate your current price per unit for packaging including labor costs. After that, price out contract packaging options to determine which route is better. There is a good chance you will save money by working with a company that does contract packaging until you reach a certain production level or use or gain approval for capital expenditures to purchase the right equipment.
2. Time Savings
Another benefit of contract packaging is time savings. If you are packaging, you will spend a lot of time planning before starting. You need to create a budget and determine what equipment is needed. Then you need to make sure that you have warehouse space to run the operation. In addition to operation space, electrical hookups and wiring will be required to begin packaging.
Finding the right equipment and materials can eat up time on the front end. As ongoing operations continue, maintenance and retaining an efficient workforce can eat up hours and time for essential planning. Some companies have enough continual volume to justify the planning needed for a constant packaging operation. Others have one-time runs, annual or semi-annual product deliveries they need to be packaged. These are some of the companies contract packaging can be beneficial for. Occasional packaging runs cannot justify the initial capital expenses required for efficiency and time savings. Packaging mistakes are another reason to consider contract packaging. If an overseas manufacturer makes a mistake with packaging, repackaging everything with basic equipment can take forever.
If choosing to work with a contract packager, most should be able to fit the project in within a few weeks. They already have everything necessary for packaging; all that is needed is to send products to the closest facility to be packaged. There is no additional time for hiring, supervising, training, or possible machine downtime.
3. Remain Focused on Products and Customers
The important tasks are creating and selling products while ensuring customers are satisfied. Eliminate the additional packaging time to focus on product development and increasing product lines. Allow companies with the proper machines and set up to focus on what they do best.
In day-to-day activities, customer focus can get lost in the mix. The time that would be set aside for packaging can be geared toward reaching out to past customers for followups and quality control. Staying in contact with customers and listening can help increase the quality of products and the variety of products and services offered.
Remain involved in the packaging design and the overall look if you prefer. Packaging is often the first impression of a company and the products being offered. Once the packaging solution is final and agreed upon, pass the burden to specialists that can finish the packaging process.
4. Increased Productivity
A new product line that has not taken off yet is a prime candidate for contract packaging. Focus on expanding the product line and growing the amount of production. In-house packaging at smaller levels of production can consume resources. As mentioned above, labor, time, and cost are needed for packaging smaller volumes with manual packaging machines and equipment.
Product development, design, and sales can be the main focus if no time is used on packaging. Be mindful of the packaging needed with new product designs and manufacturing specifics. If you choose a larger size product to produce, a contract packager should be able to accommodate the size change. With in-house packaging equipment, small product size changes may require the purchase of new equipment and materials. Something that should not be the main focus when creating and planning a new product rollout is.
What Can a Contract Packaging Company Do?
Contract packaging or co-packing is broad and can refer to many different services. Many co-packers have end of the line packaging services but can also help pack or fill the product in a container. Working with a co-packer can vary based on the capabilities of each company.
Some contract packaging companies are capable of multiple forms of packaging based on the needs of the customer. In addition to packaging, contract packaging companies can offer order fulfillment. Customers ship the finished products to a contract packager; the products are packaged, stored, and shipped directly to customers as needed. The same concept as Amazon fulfillment services.
Most contract packagers receive products, package the products and ship them out. There is a wide range of packaging that can be done depending on capabilities. Popular contract packaging services include:
Retail Ready - Contract packagers can focus on preparing products for retail. They can assist with design, protection, and minimalize shelf space.
Amazon Ready - Fulfillment by Amazon has requirements that a contract packaging company can help with by conducting drop tests and product preservation tests.
Shipping Ready - Have boxes full of products and ready to ship. A co-packer can package to help protect and prepare them for transport to customers.
Bagging - Automated bagging machines can measure and fill contents accurately and efficiently.
Shrink Wrapping - Bundle products, prepare products for retail, protect products for Amazon fulfillment, and more with shrink wrapping.
Filling Services - Liquids, gels, and other products need to be bottled and filled. Some co-packers can fill, seal, and label within fractions of a second for each bottle.
Blister/Clamshell Packaging - More of a rigid packaging, clamshell, and blister packaging provide a harder exterior to protect the contents within the packaging. Clamshell can sometimes lead to wrap rage for customers due to the difficulty in opening.
Labeling - Properly identifying products with a label for retail use. Labels can include bar codes, branding, and more.
Flow Wrapping - Flow wrapping is a popular form of packaging for consumable products. Still a form of flexible packaging, flow wrapping uses thicker materials with oxygen barrier properties to help prevent spoilage.
When searching for a contract packaging service, it is important to find a company that fits with the product(s) you are packaging. For heavier products needing to be packaged, it is necessary to find local or regional packaging services.
The same goes for products needing a food-safe facility for packaging, the right co-packer for the product being wrapping is crucial. Look online for local or regional companies to assist with the packaging of your products.
There are production levels and growth obstacles that can justify contract packaging. In the beginning, purchasing a manual machine for a few hundred dollars could keep up. Now, more time is spent packaging and prepping for packaging than focusing on the products being sold. This is one scenario contract packaging can benefit your company. Another possibility is a bad batch of products that need to be repackaged with no available equipment. Take the packaging burden off your chest and let a contract packager handle it.
If you decide to use a contract packaging company, be sure they have the capabilities needed for your products. Some co-packers focus on specific tasks such as bottling and filling or food packaging services only. Be sure the one you choose can accomplish the need at hand. The last tip is for heavy products; look for a local or regional packaging company to assist with your needs. The savings in shipping costs is worth trying to find someone close. For more information about contract packaging services, call 1-800-441-5090.