Every organization wants the products they ship to arrive on time, free of damage, and in a condition that satisfies customers. There are many ways to achieve these goals and one of the big decisions you may be considering is if it’s better to buy directly from the manufacturer or a packaging distributor. Of course, there are benefits to each and the right answer often depends on the unique needs of your business.
Several important factors should be considered when making your decision though. How you purchase your packaging supplies can make a big difference to your business. The wrong decision could leave you with damaged products, negative customer perception, and other costs that go far beyond a damaged product.
Benefits of Packaging Distributors:
Reduce Lead Times
Distributors can store inventory to save your warehouse space while also ensuring that what you need is ready when you need it. This helps insulate you from supply chain issues like the increasing lead times that have recently impacted many products. Also, it removes the administrative burden of tracking variable lead times as they change for each vendor. The only lead time your team has to think about is the distributor’s and, with a reputable packaging distributor, you can be confident that an agreed upon amount of product is always available for you. Distributors can also take care of restocking what they store for you so you have set reserves that you can count on.
Increase Flexibility
When you work directly with a manufacturer, their goal is to figure out how their systems and/or products can work for your needs. However, packaging distributors are in the unique position to utilize the knowledge of many manufacturers’ strengths and weaknesses with the goal of finding the best objective solutions for your needs.
While a shortage of materials or longer lead times could harm an individual manufacturer’s supply, distributors are able to pick from an array of backup options for either the same product/system or alternative solutions. This means you’re more likely to receive what you need on time and for the right price than when you’re locked into one source.
Get the Best Price
A frequent misconception is that it might cost more to purchase through a distributor. The reality is that distributors purchase in high enough volumes that you’ll typically pay the same price whether you purchase directly from a manufacturer or through a distributor.
In addition to this, sticking with one manufacturer makes it tough to consistently get a sense of whether you’re paying a fair price, especially when price increases come up. Distributors can be manufacturer agnostic and go out to Request for Quote (RFQ) on your behalf. That way, you always know you’re getting the best possible price for the product and manufacturers know they need to compete to offer you the best deal.
If an issue arises with one manufacturer, your distributor can also react by shifting business to companies that are more agile in the moment or use market price knowledge to negotiate prices among various manufacturers on your behalf. Ultimately, you can feel confident that you’re getting what you need for the best possible price.
Receive Better Support
A single source of support is essential when you work with multiple vendors. One reason is this unfortunately common scenario: your machinery is experiencing downtime and you can’t tell why. Rather than working together to solve your problem as quickly and efficiently as possible, the equipment manufacturer and product producer begin blaming each other. This racks up downtime and adds unnecessary stress for everyone.
Packaging distributors are responsible for all your packaging needs, so they have to find a solution, regardless of the source of the problem. This means no wasting time or pointing of blame, just doing everything possible to find a quick and efficient fix to your problem.
Utilize Expert Insights
Working with a variety of clients makes distributors the experts in any packaging need, no matter how complex. Since they don’t have to place any focus on manufacturing, they can focus entirely on identifying the best products and providing the best service. This includes making sure the right questions are asked to ensure that you get what you need the first time and don’t end up ordering something useless for your organization’s unique application. For example, if you are storing frozen items in boxes sealed with tape, you’ll need a type of tape that can withstand the extreme cold without popping off.
As new systems and products become available, distributors can take care of the research for you to ensure you’re up to date with the latest packaging technology that is relevant to your needs. They can also provide insights into evolving best practices as well as what other organizations in your industry are doing to see how you can better meet or exceed your customer’s expectations with your packaging.
Manage One Contact
It’s rare for one company to manufacture all the systems and products required to meet your packaging needs so purchasing directly means you’ll probably be juggling multiple contacts. You’ve got enough to do in a day without multiplying the work by the number of vendors – everything from placing separate orders for items to managing more paperwork and communicating with each vendor. This administrative burden adds up over time and takes you and your team’s time away from other essential tasks.
Reduce Risks
What if your manufacturer runs low on inventory or can’t keep up with the volume you need? Shortages happen, especially following the COVID-19 pandemic, and many organizations have discovered a need for better contingency plans. With a distributor, you have one less risk to your organization because they can help you pivot to a company that still has your essentials in stock or can work with you to establish alternative solutions that still achieve your packaging goals.
Discover Added Value
A good distributor will also find new ways to add value to your partnership that can’t be captured elsewhere in this list. They’ll stay ahead of new challenges that could impact your organization, like offering new solutions when you’re faced with changes in shipping rates or helping you during unforeseen events, like when many businesses made a sudden e-commerce pivot during the onset of the pandemic. They can also offer guidance when changes occur within your business, like if you’re experiencing growth that renders your existing packaging process ineffective for the increased volume.
Benefits of Buying Directly:
Packaging distributors can offer an advantage to many companies but they’re not right for everyone. For example, small businesses or those with minimal needs for packing might be able to get their needs met by a single manufacturer. These organizations are less likely to face the challenges of administrative burdens related to packaging or concerns about warehouse space. They also most likely don’t have core operations that are dependent on a reliable packaging supply chain.
Some companies aim to trim a bit off their costs by going directly through a packaging manufacturer. As mentioned above, this isn’t always the case so even extremely price sensitive companies may want to further research each option by reaching out to both manufacturers and distributors before making a decision.
While this is worthwhile for some companies to buy directly, you do lose the advantages listed above and it may not be worth any potential cost savings if your team’s time is spent managing multiple vendors or you lose business due to your manufacturer facing supply chain issues.
So Which is Right for You?
Hughes Enterprises and its packaging experts are prepared to answer any further questions you might have and present you with customized options.