Running a packaging line requires significant investments in equipment and infrastructure. Companies that do not have the capital to manage all aspects of their supply chains may find contract packaging useful.
Co-packers will optimize machinery and materials to help your products reach the retail market faster. They also provide warehousing and shipping services to complete the package delivery process.
Time
Contract packaging allows businesses to avoid the initial capital investment of purchasing and utilizing packaging machinery. This translates into time saved on planning, training, and maintenance.
Additionally, contract packagers optimize their machinery and materials so that production times are short and turnaround is rapid. This is especially important during the COVID-19 pandemic when reliable shipping and turnaround times are essential for customer satisfaction.
Companies that are expanding and growing and need continuous packaging volume to justify their manufacturing or supply chain can benefit from contract packaging. This is especially true if they are transitioning to new packaging, launching into a new market, or have one-time product deliveries that need to be packaged. Contract packaging companies can seamlessly extend your company, taking the hassle out of fulfillment.
Money
Buying and maintaining the machinery, labor, materials, and logistics needed to package products in-house can cost thousands. Contract packaging companies often work on a fixed, all-inclusive price basis and can save you money on your overall supply chain costs.
Outsourcing your production may seem like an extra expense, but consider what you’re paying for when working with a co-packer:
Contract packaging can be especially helpful for businesses that experience fluctuating production levels and growth barriers they can’t break alone. For example, purchasing and maintaining equipment could take too much time to keep up if you’ve just received a batch of product that needs to be repackaged because of a manufacturing error.
A co-packaging company can quickly and efficiently get the job done for you.
Efficiency
Contract packaging companies assume time-consuming duties, such as packing up products, freeing you to focus on customer needs and cutting unnecessary labor costs. You can also avoid the costs of acquiring and maintaining the proper packaging supplies and equipment needed to package your goods in-house.
Depending on your product and company needs, your contract packaging provider will use a variety of machines. Some common ones include heat seal automated machines, form-fill-seal machinery, and vacuum packaging.
If your product requires a display, your packaging supplier will assemble and ship it to you, KDF (knocked down flat). Suppose your product is a finished goods item. In that case, the service provider will pack out and kit your package into the displayed merchandise before shipping it directly to retailers or their distribution centers.
Reliability
Running a production line and supply chain in-house requires significant monetary investment and a dedicated team of employees to maintain the infrastructure. Contract packaging minimizes this hidden cost, allowing businesses to focus on growing their product and market.
Packaging and merchandising decisions can be time-consuming and expensive to make. A contract packager has the expertise to quickly get your product out and on shelves.
In addition, they understand the regulations and requirements that help products meet standards and live up to your brand. If you’re working with a cGMP-compliant contract packager, you can rest assured that your sensitive product will be treated and handled correctly and with the care it deserves. Moreover, they can help you avoid the potential for a costly mistake that could damage your brand and customer loyalty.
Flexibility
Contract packaging can be more flexible than trying to do it in-house. Purchasing and maintaining machinery, labor, materials, and logistics can add up quickly.
For example, suppose a product goes from being in a thermoformed plastic clamshell to a stand-up corrugated retail point-of-sale display. In that case, it can be cheaper and more efficient to ship the components to a contract packager with that capacity instead of a company with the right equipment and warehouse space to do it in-house.
In the case of a public health crisis like the coronavirus pandemic, companies can also utilize contract packagers’ flexibility to rapidly scale up production for urgently needed products like sanitary items and food staples. They can often accommodate requests within a few weeks, which is much faster than a larger corporation can do on its own.
