The packaging and retail industries are infamous for getting costly the longer they are in business. That’s why you should always be on the lookout for ways to save money in both your packaging and retailing costs, no matter how big or small your business is or how long you’ve been in the industry. Here are 6 ways to save money in packaging and retail, ranging from software automation to overseas manufacturing, so you can enjoy more of your hard-earned profits instead of feeding them to third parties.
1) Know What Makes Supply Chain Complex
Your business is unique, which means your supply chain is too. There are two ways you can approach your business’s supply chain: You can standardize it or customize it. Standardizing your supply chain could save you thousands of dollars. To do so, pinpoint every variable that makes your supply chain complex—such as multiple warehouses, third-party distributors, or varying SKUs—and find a solution for each one.
2) Understand the Supplier’s Manufacturing Process
Your job as a purchasing manager isn’t just to know what materials go into your products. If you can make sense of your supplier’s manufacturing process, you’ll be able to verify that suppliers are using your materials correctly. A good way to do so is by walking through their factory during production or meeting with them for an audit. If you’ve built a strong relationship with your supplier, you’ll be able to better understand exactly how they’re producing your product; if not, it’s time for some preliminary due diligence (like obtaining good contracts) before production begins.
3) Conduct Supplier Audits Regularly
You should conduct a supplier audit every six months at minimum. This should include both factory audits and supplier audits—because they’re two sides of the same coin. The best way to protect yourself is by taking a proactive approach and making sure you aren’t caught with your pants down if things go wrong. This will save you time, money, headaches, and potentially even human lives. Whenever you outsource anything—and especially if that anything involves complex machinery like 3D printers or robotic arms—you need to get eyes on-site as often as possible; especially if that anything involves complex materials like metal or plastic. There is no better way to get eyes on-site than through a factory audit or a supplier audit.
4) Develop an Actionable Factory Plan
The benefits of implementing an actionable factory action plan are often overlooked by Ecommerce retailers. The reason for that is simple: not many Ecommerce sellers know how to create such a plan. It’s something that comes with experience and exposure to how factories work. So, we’ve put together a guide based on our years of working with factories in China—as well as our decade-long experience running an eCommerce apparel business—to help you get started with creating your own actionable factory action plan. Here’s what you’ll learn
5) Conduct Factory Audits Regularly
Factory audits are one of your best processes when you’re looking for ways to cut costs. That doesn’t mean they should be done monthly—in fact, you should conduct one every three months at a minimum. And each audit should focus on different things, which means you need at least four types of audits: factory audits; supplier audits; retail audits; and marketing/advertising/sales audits. Audit regularly (and even more often if there is significant change) so that you can catch issues early—and before they snowball into bigger issues that cost more money.
6) Get Physical Samples from the Suppliers
A factory audit can be pretty basic—just checking that there are certificates of compliance on display—or it can be a deep dive into every aspect of your supplier’s operations. It really depends on how far you want to go. A quick check, for example, could reveal that your factory is using sub-standard equipment or untrained staff. That’s where a full audit would come in handy, providing you with clear information about your supplier’s capabilities. Either way, consider getting physical samples from each factory—even if they don’t directly relate to quality control—so you have something more concrete than paperwork from which to make decisions.
Businesses of all types are beginning to realize that Standard Varies can help them significantly reduce costs while creating a more profitable enterprise. This is only scratching the surface, but by checking into these 6 common areas, companies can really turn around their profit margins. For more information about how Standard Varies can work for your business, reach out today. We’d love to tell you more!