Telecommunications

Good News For A Growing Problem

Whether you are in Hardware, Garden Products, DIY, Housewares, or are a Builders Merchant, contract packing provides ‘Good News’ for a growing problem.

As an increasing number of buyers improve margins by turning their attention to imported goods, the limitations and specific dangers of this choice must be taken into consideration. Product that is on the water for up to twelve weeks can compromise your profits if it doesn’t arrive in the desired condition, potentially causing you to lose your customers and your market window. Furthermore, if you are importing product in bulk to save shipping fresh air, you will need to be able to process it domestically in a cost effective and timely way.

The Pareto principle, or 80/20 rule, in context defines that up to 20% of all such imported product will potentially need some form of attention. It will either: fail Q.C. (yours or your customer’s) because it has not been packed according to specification, require re-packing domestically because it has failed some obscure customer or legislative requirement, it may need re-branding or re-labeling as your market changes it’s mind, or simply be damaged in transit.

You may have had it manufactured and packed overseas, shipping it directly to your customers national distribution center. If it arrives with them and fails their incoming inspection, you may be in for a hefty fine, or worse, lose the customer. Alternatively, if it’s shipped directly to your own premises, you then need to employ valuable space and labour to deal with it. If the product comes from overseas, cost and time prevent it from being sent back to the source for rectification, so this must be dealt with domestically in a cost effective way.

What are you to do when you need to act decisively, quickly and above all cost effectively in these situations? Wouldn’t it be nice if you had the capacity that allowed you to react to these challenges by utilizing the flexibility of a rapid response team dedicated to providing the packing or re-working of your products; not only that, but at the same time potentially improve your profits because the work done has been carried out on a piece rated or unit costed basis.

The good news is that such a mechanism exists, and you do have access to it. Out-sourcing, including co-packing or contract packing and rectification has suddenly come of age as the opportunity to improve profits through importing has grown exponentially.

This has led to a sustained increase in the number of importers requiring either out-sourced packing or rectification work. Apart from the massive savings they can make when faulty product is intercepted and redirected for rework before it hits the national redistribution center, it can benefit the customer in a threefold way. It can save them from a hefty fine (Very Important). It can save them money by cost effective unit packing (Profit through Co-Packing). But most importantly it can save their reputation (Priceless).

Whatever your market enterprise, if you are importing, you will without doubt at some time experience one or more of these situations. It is important to remember that this need not be a destructive experience. Changes to our markets have presented us with specific challenges to overcome, however if you can perceive them as new opportunities to improve efficiency and profits, through the effective use of co-packers and re-workers then this really is Good News for all concerned.

http://www.northstart.co.uk/

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