Especially during this global pandemic, US companies need to be flexible when it comes to sourcing their retail packaging. A year ago it was the tariffs and trade fighting with China, now the Coronavirus has the global supply chain in turmoil. The point, domestic suppliers are at full capacity and their backups are at full capacity and in a very short period of time--March 2020--US factories could be forced to close. But...you have a business to run.
I don't care whether you are in the pet treat business, or your company makes spices for BBQ rubs, your company needs to compete.
While buying from domestic (North American) suppliers has been the norm, the retail landscape has become brutal... and there are no signs of it letting up. Competition for shelf space at Walmart, Target, Petco or even the local independent grocery is fierce.
In a perfect world, companies could easily source their ingredients, blend and make whatever they are selling, fill it into beautiful retail packaging they purchased at a reasonable and fair price and have everything arrive on time, with time to spare for this company to deliver to the retailer, get paid promptly and happily move on to the next customer opportunity...
This just doesn't happen. Or if it does, it's once in a blue moon. Retailers are heartless.
If you have a problem with quality or delivery time, within 24 hours they have enacted charge backs to recoup what they consider (and you agreed to by taking the order in the first place) are lost sales, lost profit and lost retail shelf space.
Any amount of explanation will fall on deaf ears, and this money will be deducted from future invoice payments or just credited immediately. It is heartless, ruthless, fierce and unforgiving (sounds like a Western novel!). But it's true. The retailer cares about what works best for them and their company, and if anyone and anything gets in the way, forget it.
We already determined that a perfect world of making a healthy margin on your products and all the pieces/parts (i.e. ingredients, blending, manufacturing, filling, packaging and delivery) working seamlessly is rare. Let's also agree that while retailers can be the lifeblood to your company, they do not have your best interest in mind. They are looking out for themselves.
In short, you need your margins too, and you need to compete and be able to not just keep your lights on, but also thrive! But you say, "We've tried everything. We've leaned on our suppliers and pushed for cost reductions, better payment terms and more bang for our buck. Where are these margins you are referring to?"
Over the past 15 years, we've discovered lost margins in packaging, from down-and dirty cello bags and rollstock, to 10-color printed stand up pouches, vacuum bags and everything in between.
North American companies have neglected to look at their packaging for a number of reasons:
One, it's not something that is particularly flashy. It's a necessary evil handled by someone in purchasing who has been in your company for years, and it's always been this way.
Two, there is the assumption that your packaging is every bit as good as your competitors' and it cannot make that much of a difference to your brand awareness, sales or bottom line.
Three, no one cares about your packaging. It's your product customers are buying. This line of thinking has crippled U.S. manufacturers for years.
Being able to source globally from companies you can truly trust could be a game changer for you. With this in mind we created an eBook with everything you could possibly think of pertaining to global sourcing and even retail packaging.
We are here to help. Below are the different chapters and links:
- Consumers Buy With Their Eyes
- 10 Steps to Sourcing Retail Packaging Start To Finish
- US Supply Chain Partner Is Key When Sourcing Globally
- Should I Hire a Freight Forwarder of Let My Factory Handle?
- When Sourcing Globally--Boots on the Ground WINS Every Time!
- Sourcing Globally--Hire An Agent or Do It Myself?
- There Is Hidden Margin In Retail Packaging Sourced Overseas
- The Sea of the Same Retail Packaging--Be Different
- Innovative and Convenient Retail Packaging Brings Margin
- Your Retail Packaging is the Voice of Your Brand