Contract packaging is when a company hires an outside business to produce the product’s packaging, assemble it, and even store and ship it. Various services CPOs provide include labeling, hand assembly, point-of-purchase displays, and gift sets.
Contract packagers can help in many ways for new and growing businesses. Read on to learn how they can save your business:
Cost-Effectiveness
Contract packaging companies offer a cost-effective alternative for businesses that don’t have the infrastructure or production capacity to handle their packaging needs. This is especially true for food and beverage companies that need to scale up quickly but need help to afford the overhead of running their facility.
Contract packagers have the expertise, production facilities, and materials to cope with various packaging requirements. They also use lean manufacturing techniques to minimize waste, which leads to significant cost savings for the hiring company.
Contract packaging companies can also help with services like custom labeling and point-of-purchase displays. They can even provide advanced features such as product tracking and RFID tags.
Time-Saving
Contract packaging companies can take much of the time-consuming burden off your shoulders. They have the facilities, equipment, and capacity to meet your product’s production demands quickly and efficiently.
Keeping operational costs low is another big reason many businesses outsource their packaging needs. When you handle packaging in-house, you spend money on labor, floor space, and warehousing that could be better spent on other business areas, like R&D or product development.
In addition, if you are working on a new product design or have other manufacturing specifics for your products, contract packagers often have the necessary engineering capabilities. For example, some contract packagers have RFID tags, enabling product tracking capabilities throughout the supply chain for customers and retailers.
Flexibility
Contract packagers can offer flexibility in production services depending on your company’s needs. This is especially beneficial for companies that rely on seasonal products or those with high production levels around holidays and must be able to scale up their packaging lines quickly.
Contract packagers can also offer additional packaging services like barcoding or RFID tagging. The barcodes are added to each stock-keeping unit (SKU) and can be easily read by warehouse or checkout equipment. At the same time, the RFID tags are placed on shipping containers for real-time tracking capabilities for shipments in transit. This helps your company save time on logistics while allowing them to focus on their core business. In other words, it can help you deliver to your customers faster.
Convenience
Setting up your own large-scale packaging or production facility takes time and money. A contract packager or co-packer will help you get your product to market faster without all the headaches of managing your equipment.
Contract packaging companies have the infrastructure and equipment for product testing or new packaging designs. For example, they can use specialized testing packaging to show how your product will perform in different conditions, such as a crush or drop test.
Since contract packagers focus solely on packaging, they can find innovative ways to streamline their process. Their speed also helps them save on shipping costs and inventory shrinkage. This can all add up to big savings for you and your customers!
Customization
Contract packaging companies can offer businesses a variety of options for their product. They can help to create a package that will appeal to the target market and be easy for consumers to understand. They can also help to ensure that the package meets all necessary regulations.
Contract packages can also provide various services, such as labeling, graphic design, and even full-service fulfillment. They can handle the whole process from beginning to end, saving businesses time and effort.
Managing your production facility and equipment can be expensive and time-consuming. Contract packaging (or co-packing) can reduce these costs while allowing your business to bring products to market much faster. It lets you focus on your core business without worrying about storage and logistics.
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