Packaging Can Affect Your Bottom Line
We work with purchasers buying bulk olive oil on a daily basis. One of my favorite questions to receive is about bulk packaging. Switching to more efficient packaging size is one of the easiest ways to save money, but it is under-utilized by the vast majority of US manufacturing companies.
The majority of manufacturing companies use 55 gallon drums. My first suggestion is always to consider a larger tote size. These totes are available in both the standard plastic with an aluminum frame, and in a Box-in-Box version (my personal favorite).
Why I Prefer 330 Gallon Bag-In-Box Totes (And Why You Should Too!)
1. You Get More Oil Per Pallet
With the 55 gallon drums, you get a total of 1,676 lbs of oil per pallet. With the 330 gallon totes, you get 2,511 lbs of oil, increasing your oil per pallet by 50%.
2. You Save 33% on Shipping
The 50% increase in oil doesn’t just help your production line run more efficiently. A pallet takes up the same amount of space in a freight truck, whether 4 drums or a tote is strapped to it; therefore, the cost of shipping is the same no matter which size you ship. If you divide out your shipping cost per lb, you save 33% on shipping. For most companies, this means an average savings of $0.07 /Lb, which is a pretty hefty sum.
Let’s do that math from above, assuming that shipping costs are $350 per pallet (an industry average). If you opt for the drums, delivery will cost an additional $0.21 /lb ($350 /1676). If you go with the 330 gallon tote, delivery is only $0.14 /Lb ($350/2511), saving $0.07/lb on the delivered overall cost. Most buyers will tell me that as they’re comparing olive oils, $0.07 /lb is quite a bit-- if you go through a pallet a week, that’s a potential savings of almost $10,000 /yr.
3. No “Leftover” Packaging After Production
When you opt for the steel drums, you are left with 4 large round barrels that you have to dispose of after you’re done using the oil. Perhaps you sell them online, perhaps you throw them in the company trash or bring them to the dump. No matter what you do, you have to deal with them after the oil is used up.
With the Bag in a Box totes, you can break them down and recycle them after use. Once the oil is gone inside, you can dispose of the plastic bladder and cut down the box sides to make it lay flat. The cardboard takes up minimal space in the recycling/trash, and for any company that pays for trash disposal, this helps save money by reducing waste! If that sounds good, see the photos of this process step by step.
Ask Those Who've Gone Before You
The biggest question is-- have other manufacturing companies like yours made this switch before? And, has it been helpful? Has it saved money?
To save you the suspense, the answer is yes, yes and yes. But we want to show you the specifics because you're the ones who have everything to gain. Download this case study to see real savings (with exact dollar signs!) and see this new packaging changed their production line. The next step after that? Get a quote on the totes to see how much the switch would save you.
Topics: Packaging
