How to Reduce Packaging Costs (Without Sacrificing Elsewhere)
March 12, 2025
How much does packaging cost?
Companies spend on average between 10-40% of a product’s retail price on packaging. According to Consumer Reports, that adds up to more than $150 billion annually. That’s a staggering sum.
While packaging has many roles to play, from providing protection to making a brand impact and ensuring a smooth unboxing experience, packaging costs that run too high can eat into profits. In this article, we’ll show you how to reduce packaging costs without sacrificing all the benefits that come with the right packaging solution.
5 Key Actions to Reduce Packaging Costs
When it comes to packaging optimization, small changes can make a big difference. Here are our top five tips for how to reduce packaging costs without impacting quality.
- Optimize Your Packaging Design
- Invest in Sustainable Packaging Materials
- Improve Packaging Material Management
- Maintain Your Packaging Equipment
- Automate Your Packaging Process
1. Optimize Your Packaging Design
The first step is packaging optimization, so start by looking at your overall packaging design. Are you using excess packaging materials that are adding weight? How about inside the package, are you adding extra padding or promotional materials that don’t need to be there? Look to optimize your packaging design by minimizing material use and replacing heavier materials with lightweight options wherever possible. For example, switch out traditional, heavy cardboard with corrugate, which contains air bubbles that make it lighter while still providing adequate protection.
Speaking of protection, if your packaging design leaves something to be desired, damages and returns might be driving up your costs, too. Consider opting for a custom-designed package that fits your product’s unique needs more precisely, preventing breakage and costly returns. For bulky or odd-shaped items, custom packaging can also reduce your overall material use and eliminate wasted space, further reducing packaging costs.
2. Invest in Sustainable Packaging Materials
Sustainable packaging materials are often designed to minimize the amount of material that’s used, which also means lower costs. Recycled paper and biodegradable plastics, for example, minimize waste by design, while mushroom packaging provides high performance insulation and protection at a competitive cost. Investing in these types of sustainable packaging materials can lower your expenses by minimizing raw material requirements as well as reducing package weight.
Opting for collapsible materials, such as paperboard, cardboard, and high-density polyethylene (HDPE), also makes it easier for customers to recycle packaging when they’re done with it. Plus, with the consumer trend towards eco-friendly, sustainable packaging, branding your packaging as sustainable or green can help you boost your brand reputation and win over environmentally conscious shoppers.
3. Improve Packaging Material Management
Efficient material management is an important, and often overlooked, aspect of packaging. While ordering materials in bulk may seem like a good way to save costs, stocking excess materials uses up valuable resources and warehouse space. Using too many different types of packaging can also lead to waste. Even the layout of your warehouse can lead to inefficient workflows, which burn through resources. Taking a more strategic approach to material management can save you significant time, effort, and money.
Start by assessing how many different kinds of packaging product you’re using, and combine or eliminate wherever possible to minimize what you need to keep on hand. Then, figure out your lead times for restocking various products or materials, so you know exactly when you need to reorder. This will allow you to keep only what you actually need in stock, freeing up warehouse space and cutting back on upfront spending. If you don’t have the means to do this yourself, some packaging industry vendors offer just-in-time (JIT) inventory management to help you stay ahead of shortages by tracking inventory and delivering exactly what you need, when you need it.
Finally, organize your packaging materials in a way that will minimize the amount of work required to assemble and ship packages. Streamlining orders and fine-tuning workflows will save your team time, lowering labor costs while optimizing your overall operation.
4. Maintain Your Packaging Equipment
To keep your entire operation running efficiently, make sure your machinery stays in optimal condition by performing regular checks and maintenance. Preventative maintenance is worth paying for up front because in the long run, it saves you on repairs and downtime, both of which can impact the bottom line. Implementing equipment that accelerates and improves packaging production quality further improves productivity and reduces errors, lowering costs two more ways.
If you don’t have in-house equipment or the know-how to properly implement and maintain it, consider partnering with a vendor that’s well-versed in packaging production. Outsourcing packaging production not only allows you to take advantage of hard-won expertise, it saves you investing time and money into expensive tools and machinery. It’s a cost-effective and smart way to optimize your operation.
5. Automate Your Packaging Process
In recent years, automation technology has advanced by leaps and bounds. In the realm of packaging production, automation machinery can be used to package products rather than doing it by hand. Automating processes can drastically increase output while also reducing waste, because machines are able to work faster and with more precision. Automation offers the added advantage of producing a more polished, high-quality end product. These are all benefits worth investing in.
If you’ve always operated manually and don’t know where to start when it comes to automation, bring in the experts. Partnering with a vendor for packaging process design and automation can help you maximize line efficiency without impacting output quality. The right partner will help with everything from designing custom flow maps for your warehouse to deciding which automated solution will work best for your needs.
How Ernest Can Help Reduce Your Packaging Costs
At Ernest, we understand how much packaging costs, and the critical importance of packaging optimization. That means reducing expenses wherever possible, maximizing efficiency and productivity, and ensuring your packaging solution does exactly what you need it to — no more, and no less.
We have experts in every aspect of packaging design and production, from our Ernest Managed Inventory team to our design experts and automation specialists. Whatever your unique packaging needs, we’re ready to help you meet them in the most efficient and effective way possible. Let’s talk.
