Real-time Profitable Packaging Business
The success of all other industries depends upon packaging. No matter what is happening or what is being done around the world. Geopolitical tensions, wars, famines, floods, earthquakes, or events that have more of a slow burn approach such as economic progression, or a company going from a startup to a brand or a billion dollar company. A small scale business that starts it’s ascending to reach that next level. Everything needs packaging. If we think about it then there is no place on earth where packaging is not required. The standards of packaging may vary, but there is some space to be filled.
If we think about the countries that are fueled by industrial drive and progress, then that’s a no brainer, but let’s take a moment to think about the countries that we see daily in papers and on the internet, where bare necessities are at a minimum, for example, the famine struck regions. The NGOs and organizations that have taken up the task of providing for them, the water that is being distributed or the food or the clothes that are being transported from one region to that region, it’s all through packaging that goods are being transferred. It’s quite right to assume that where people live, the packaging is needed.
The global packaging industry was worth $40 billion in 2017. And it is expected to climb up to a staggering $78 billion by 2023. These numbers present an upward swing that has not been seen in the past in this specific industry. When the numbers indicate a surge, there is always room for more and more. And the numbers promise to rise even more after 2023 has come and gone.
The success of e-commerce trade, food packaging, and medicine packaging is what is driving the demand to new height s for more unique and smarter packaging solutions.
If we take a walk down the aisle of any departmental store down the block. We can see that the number of products that have made way to the shelves this year that weren’t there last year and the number of products that have changed their branding and colors, we can imagine the activity that had to be conducted to make those boxes and new products reach these shelves. This trend will continue to rise. A recent survey suggests that the global food and beverage industry is growing at 5% annually. It’s a multi-trillion dollar phenomenon. Just let that sink in! The potential is unimaginable with the right tools at your disposal.
Increased Demands:
An increased demand in the production of medicines also contributes to the packaging industry. The companies have to meet the expectations of not one consumer category but also the government regulations. The advancement in the healthcare field requires companies to innovate after research when it comes to packaging medicines or medical equipment. Specialized packaging requires brains and money. And the necessity of the hour is to seek to discover more avenues that cater to this particular need.
Just like the food industry, this industry continues to rise and won’t stop its trajectory anytime soon. As long as there are humans and plants on the planet, the need is only going to ascend.
Same goes for e-commerce industry. The number of e-commerce buyers continues to grow in millions each year worldwide. That brings forth another avenue where any packaging business can look forward to aiming.
People with businesses that are already off the ground will testify to the fact that running a packaging business is a far more complicated task than setting up one. The number of new business in the packaging industry that closes down their doors in the first year is so high that if we shared that here, you would not believe it. That number drops when we talk about the businesses that close down in the second year. But the drop is not significant. The first three years are critical. If a business survives that, chances are quite high that it sustains itself for a long time
This is a habitual pattern.
Contract packaging refers to the whole process of taking the product from bare state to its final packaged form. It refers to the party packaging solution. Most of the larger scale companies have in house packaging solutions, but recent trends have suggested that outsourcing the packaging and assembly of packaged goods is time-saving and cost efficient than an in house setup. The companies that offer contract packaging offer different services depending upon the capacity, equipment, and requirements.
Here are a few tasks that these companies may offer
Bottle filler: filling of bottles with either liquid or powder, capping and then final packing
Primary packaging: the initial direct packaging of a single product
Secondary packaging: final packing of a product that readies the product for shipping. It is done after a product has been primarily packaged
Manual Packaging: this includes standard packaging of products that require POP displays, gluing, folding.
Depending upon the product and requirement of the company outsourcing, some or all of these tasks can be performed by the third party solution companies.
Currently, the market is gearing towards a technological revolution. If we look at some of the big players, their main focus in the next five years seems to be on the installation of machinery that can enhance the process by reducing manual assembly and manual labor. The advanced machinery will enable them to get more done in less time and more efficiently.
The market world is as emulous as it can get due to the presence of multiple large scale companies and small scale entities. This variation helps the market to serve and entertain everyone from groups that have diminutive to medium scale investments and capital to larger groups that are giants.
On an industrial scale, the space for more incoming investors is limited. When a place is saturated, and the options are limited, the competition turns fierce and enters a matured state where only the service remains the deciding factor.
These past few years, the food and beverage industry has been the most significant contributor to the contract packaging industry. The number of processed foods has increased in the market due to increased demand. The name of working parents is ascending which is also expanding the reliance on processed foods. Add to the fact that processed foods have better marketing packaging than most other industries, hence increasing sales as well.
We are going to share some stats
34% percent of people who buy products that they never intended to buy can blame the packaging for their choice. Let us examine this. What are the chances that you have a product on the shelf in the market, and a person buys it without ever intending to buy it? Just because it was wrapped up nicely and it was all bright and welcoming, a sale was made. This is the way to increase sales. The purchase can be justified for any reason. Maybe the packaging was a piece of art, and the buyer couldn’t resist. That’s an admirer straightaway that will probably try to find the name of the packaging company and contact it himself if he/she owns a business. Maybe an artistic mind dropped by on the store and decided to buy the product to secure the packaging and make use of it later in some of his/her projects. Or for inspiration.
63% of buyers reuse the packaging once. If the packaging is durable and was made to squeeze out a considerable amount of time and withstand harsh weather conditions or crude handling, that is another utility right there. While buying what is inside that packaging, they will have in mind the secondary utility of the purchase. This can be an effective marketing technique that is indirect.
On the contrary, another figure that is undoubtedly going to make everyone think is that only 20% percent of customers are actually satisfied with the packaging of the products they buy. What that means is even with such a low approval rate, people will always obtain the things they love because obviously, they are buying for what is inside and not for the packaging. But we have the chance to increase the sales by adding extra value for money in the purchase. Consumers think they are just paying for the products that are inside and not for the packaging> let them feel like that for a moment and if the packaging offers extra utility, that’s a bargain. They are getting something that they haven’t paid for yet that are getting it. Imagine the approval rate for packaging and designs climbs a little bit. It’s only going to bring in more good news than ever.
Over 75% of customers would recommend a product to their acquaintances if they had a delightful experience. Why not give them a reason to spread the word around the streets, in their families, and on social media by indulging in sheer creativity in packaging.
An excellent looking package that is sleek and incorporates minimalistic designs is more likely to attract customers under the age of 35. It is amazing what we can come to know once we start analyzing the market and start studying what is really happening out there. Obviously, the statistics shared here may vary depending upon the geographical location, but they are enough to give us idea of where this thing is going and inform us about the prospects and educate us about the risks and threats.
Companies claim a 30% increase in interest from the consumer end when special attention has been dedicated to the packaging and design of the product. An increased interest is what every organization is looking for. This strategy has been coming into play and will go a long way as the companies educate themselves about consumer behavior. We will not be off route if we claim to say that better packaging is the answer to increased sales.
Did Industry get profit?
The industry that earns maximum profits is the beauty and cosmetics industry. People are willing to shell out billions of dollars every year to buy cosmetics. Their packaging can be attributed to such success. It is specific. It caters to people with specific choices and requirements. The design teams that work on the packaging of such products have struck a chord among. We can also say they have a lot more leeway but the same latitude can also be found in products of other industries.
More than 50% of web buyers buy again and again from the same company if the packaging is appealing or if it can be used as a separate entity altogether.
We can enhance the customer experience by incorporating little things into our arsenal. If you have a business that is selling beauty based products and cosmetics, the next time you send a package, add a little sample of another product that you want to market. It can be a sample of a new perfume that is going to hit the shelves. And with that a comment card that asks customers for their reviews. This way the impression is conveyed along that the company values the feedback of its customers, hence developing an emotional connection.
The font has to be easily understandable. In the name of design and creativity, don’t get too tricky. The art has to be user-friendly. Unless the customer is from a specific niche that can understand the painting that you are integrating into your packaging.
A common exclusion is the product information from the package. This is something that is so obvious that it gets left off from a lot of packaging. In some cases intentionally and in others, as a result of a blunder. Include the color of the product that is there, implementing different colors that are being offered, the size, the quantity, description that is not too detailed but gets the job done. It goes without saying that, it has to be honest and factually correct.
Adding the name and address of the customer is highly recommended. This, just eases the task for the delivery men and the recipient to locate, deliver and receive. Mention the return policy and make it easy to read. It should be long enough that it tells the whole story but not too long or small that it becomes a pain to read or understand. Also, leave a field for the customer that asks for the reason for return.
Adding coupons to the package is also a great strategy. We love when we get two for the price of one offer. When that coupon is applied, it will serve as a good reminder.
Many people like to use stickers. They have this ability to make anything look personalized if used on any product. Sending stickers is a great way to connect with customers. It is something that is going to last a long time and every time they see it; they can reminisce of your company.
On top of that, there is a chance that if the stickers are charming enough or creative enough people might ask where they got it from. That is free publicity. This is just another way to keep them talking to stay in their minds long after the package has arrived or has been bought.
One other strategy that has been used and something which I loved was the guessing game. Upon the arrival of the package, a note attached to it that hints at a surprise gift that is going to arrive sometime in the future with the date and time mentioned — asking the customers to be ready. Can you imagine if there are kids in that household? The amount of fun that they are going to have. The curiosities running high. This type of emotional experience can be addictive and leave a long lasting impression. They are going to keep guessing until the day arrives and they have received something special. If we have some information about the household and the family members like their ages, we can use that data to take something out of the deal.
Businesses also need to make sure that as much fun as this exercise can get, they need to keep the costs under control. Nobody wants a ballooned up expenditure...
Think of packaging as a presentation that you are about to give to the board members of your company or your colleagues. The exhibition has to be unique. The more memorable it is for the customers, the better it is for your company. If you are lucky enough, it can get viral over the internet. We do not know how badly the recipient needed a feel-good moment. One moment or gesture can change the game. For you and them!
Be in search for that moment.
When we talk about increasing the profitability of a packaging business, expanding the lineup can be a great idea. Various products require specific packaging. Some are easy to produce and offer high financial returns. Egg trays, jute boxes, bottle caps, blood bags, and air bubble sheets are some of the things that might favor people with small to medium investments, who are looking to start businesses. They can be high startups. These products are always in demand. They are little in size, but their functionality is vast.
While streamlining a packaging business, it is crucial that we settle upon prices that are suitable enough that they make the buyers feel accommodated yet maximize our profit margins. We can sit down and start a detailed analysis regarding the pricing. It is a whole subject that requires attention to detail. A good look at the customers can give an idea as to what is supposed to be the sweet spot. The willingness to spend, the cost of making, the prices that competition is offering, the cost of transportation and everything else has to be factored in — the more detailed, the better. An increase in rates may seem scary at first thought, and many feel that the customers will be chased away, but the facts state otherwise. It depends on the customers. When we have analyzed the type of customers that a business attracts, and if the consumer behavior has been reflected upon, we can make a choice accordingly. There is a specific type of customer that can not only be attracted with a price increase but can also be turned into a regular. An educational analysis can go a long way to help you decipher what it is that a customer wants. If you manage to understand the psyche, you can maximize sales and profits quickly.
The brand elevation is the key if you intend to stand out. As previously stated, the industry with the highest profit margin is the cosmetic industry. They have tapped into the secret of brand development. A brand or multiple brands seemingly can charge astronomical prices for more or less the same products that the competitors are offering. There is that trust factor. People blindly trust companies that have successfully been able to build brands out of small companies. There is no accurate method that can lay out the path in front of you to help you turn your company into a brand. What we can do is, we can study others who have done it specifically through design and packaging. In the cosmetics sector, we can come up with countless examples of such companies who have achieved the feat.
This business needs creativity like all other business. Since it is so closely associated with design and colors and shapes and sizes, there is always going to be room for more. Aesthetics are going to play a vital role in the future. Just as much as advanced business practices and technological innovation. Marketing cannot be ignored either.
Once you dive deeper, we realize that the options are endless. The potential is sky high. So get ready to dive!
