You may have a decision to make about packaging: do you set up a new packaging line in-house, or look for qualified assistance from a third party? Keep your options open until you know what contract packing services are all about and have to offer.
In this article, we’ll help you get a better understanding of just how broad the capabilities of contract packaging are, and whether the service is a good fit for your business.
Why Consider Using Contract Packaging Services?
Contract packaging, also called co-packing, can be a viable alternative to trying to manage all facets of packaging and storage of your products exclusively on your own.
The challenge of trying to calculate the potential expense potential of the labor and space required to do your packaging in-house is significant. Plus there’s the additional facet of warehousing and its management to consider.
By offloading a section of your supply chain, for example to a 3PL provider who offers co-packing as a value added service, a significant portion of your company’s resources may be freed up to go towards other prioritized growth plans.
There are many benefits to outsourcing elements of your supply chain. You can realize cost reductions, superior packaging results, thorough optimization and professional management of your packaging line.
What are Contract Packaging Services?
Contract packing services are outsourced agreements with third parties that businesses can take advantage of when their own resources for in-house packaging are not fully available.
Some third party businesses offer professional packaging service as their core competency, other providers offer contract packaging and co-packing as additional, value-added services designed to help their clients manage more aspects of their supply chains.
In terms of the actual physical parts of packaging, there are typically two elements that need to be addressed to provide a suitable container for a given product. Namely, primary and secondary packaging.
Primary packing is the container that immediately surrounds the product, whereas the secondary packaging encompasses the primary package.
A robust contract packaging service provider will be able to supply these components, plus be able to label and prepare them for shipping in accordance of their type and destination.
How Does Contract Packaging and Co-Packing Work?
Contract packaging works through supplying all the services and materials related to packaging needs. This includes the purchase, optimization and implementation of the packaging machinery and appropriate materials for your products. In effect, it’s essentially a turn-key solution for outsourcing all the required packaging systems of your business.
Additionally, contract packaging companies can supply the R&D services, packaging design, printing, labour, and complete fulfillment capabilities that many companies don’t have the resources for. In fact, co-packers are often experts in all facets of packaging and related services.
Types of Contract and Co-Packing Services
Contract and co-packaging services can accommodate virtually all types of goods from everyday products to specialty items. The only real limitation is finding the appropriate company that can provide the type of service you specifically need.
For example, if your company produces goods that require refrigeration, you want to make sure you contracted service provider has the capabilities and warehousing to accommodate your products at the temperatures they require. Likewise, if you deal in food items, you’ll want to make absolutely sure your co-packer’s facilities are SQF or HACCP compliant and certified.
Additionally, packaging services can be highly specific to a type of product category, for example – cosmetics. The cosmetics industry would require packaging for such items as lipsticks, lip balms, lip gloss, eyeliners, eye shadows, eyelashes, foundations, mascara, pressed blushes, makeup primers, and brushes.
Examples of Local Contract Packaging Services
The following examples of packaging and co-packing services was gleaned from Thomas:
- Blister and clamshell packaging
- Club and multi-packaging
- Display assembly
- Flow wrapping
- Fulfillment services
- Poly bundling
- Kitting services
- Print bindery
- Club pack packaging
- Shrink sleeving, and shrink wrapping
- Mil-Spec and MIL STD packaging
- Plus many more
Markets Served by Contract Packaging
Virtually every market segment employs contract packaging. Some of the more common examples would be:
- Consumer markets
- OTC (over the counter)
- OEM (original equipment manufacturers)
- Personal care and cosmetics
- Pet products
- Food and beverage
- Liquor markets
- And many more
Chances are, regardless of the types of products you make and market segment you specialize in, there’s a contract packaging service provider for them.
In addition, market segments can be further stratified as municipal, government, insurance, retail and manufacturing industries.
Are You Ready for a Contract Packaging Service?
Operating your own packaging line requires the investment in labour and infrastructure, storage space and the packaging machinery itself. Due to the significant amount of investment and capital required, a company that doesn’t have the necessary funding to manage all aspects of their own supply chain is a good fit for contract packaging.
The list of KPI’s you need to consider to develop a packaging line is intimidating and should only be considered if you have a solid growth plan with a proven track record in place. Otherwise, outsourcing your packaging needs to a third party reduces risk until you have such resources available.
In some instances, a company may be at that stage of growth where it makes sense to augment their own in-house packaging capabilities and supply chain needs. By outsourcing some of these needs to packaging service providers, you can save time and money, and are potentially a good fit for partnering with a co-packer.
How to Develop a Relationship with a Contract Packaging Company
To develop a relationship with a contract packaging company, you’ll first need to research a few vendors in your area. Logistically, it makes more sense to work with a provider in your own local region. This cuts down on lead times, downtime, associated shipping costs and generally makes doing business with your chosen partner easier.
You also want to have a packaging provider’s representative come out you’re to examine the state of your current packaging infrastructure. This will give them a first-hand look at how you manage your products, existing packaging line, and peripheral items of importance.
Next, you’ll want to get a quote from each company you’re considering, at least three, compare offers, budgetary requirements and fully assess compatibility. After making an educated decision for the packaging service with the best fit, reach out to the respective representative to begin the purchasing and term agreement processes.
To see if Brimich Logistics and Packaging can assist with your contract packaging needs, contact us today to speak with a packaging professional!