If you’re struggling to find space for all your products or find that the packing and shipping process is consuming most of your time, chances are you could benefit from co-packing. Contract packaging (or co-packing)–when a fulfillment service provides storage, packs items together, and ships them out—can be a valuable tool for your business. How can you know when it’s time to outsource and when you can manage better with in-house shipping? We’ve put together four scenarios where co-packing is a good choice to help you think through what your business could benefit from. So when should you use co-packing? Read on to find out!
When you’re experiencing high demand
Co-packing is usually a good choice when you have established products with relatively high demand. This doesn’t mean you have to be a multi-million dollar company—it simply means that a basement Etsy business probably doesn’t have a steady or consistent enough stream of business to make co-packing a good investment. However, if your company has products with stable demand in relatively large quantities, co-packing can be a great choice. Be sure you choose a co-packer that will work with your size and average order numbers, though. Some larger fulfillment companies set high product minimums, meaning they might charge you extra for space or packing that you won’t use.
When you need to free up storage space
One of the beauties of co-packing is that it eliminates the need for you to keep pallets of inventory stored and ready to ship. The co-packer will store it all for you, meaning that if you’re running out of space or looking for a way to expand operations, getting your inventory moved to a co-packer can be an affordable way to do it. Look for a packer that charges reasonable and flexible rates for storage, and keep in mind any additional inventory fees like holiday storage upcharges. With a little research, you can find a co-packer that will free up plenty of space in your warehouse or office space for an affordable price.
When you have a consistent system
When you outsource to a co-packer, you’ll need to give them a consistent process for packing orders. If you’re still in the infant stages of your business, or you’re not sure yet how you want to pack products, getting a co-packer to fulfill your vision can be challenging. Instead, ensure you have a consistent system that will translate well to a third-party shipper before you outsource. Iron out the kinks and make sure you’re happy with the process and instructions you’re giving to the co-packer. Doing this can save both you and your fulfillment partner time and frustration.
When you’re looking to save money
Fulfillment services are specifically designed and scaled to be as efficient and cost-effective as possible for packing and shipping. While your business might have a great shipping department, chances are that you’re not operating at the same volume as these companies. Nine times out of ten, a fulfillment service will be able to do what you’re doing for less money. This can be a huge advantage if you’re a smaller company that can’t afford (and doesn’t want) a gigantic shipping department with optimized processes and extreme efficiency and affordability. However, co-packing with a fulfillment partner allows you to get access to a more efficient and cost-effective system without creating it yourself. It’s a great way to save money.