As a business owner, you’re probably well aware of your bottom line. And the need to be mindful of operating costs wherever possible. So initially it might make sense to go with a cheaper packaging option for your Amazon business. After all, packaging isn’t even a part of the product. You don’t want to spend more than necessary on something that will only end up in the recycle bin, right? But things as simple and seemingly inconsequential as choosing a cheaper packaging option can have devastating effects on your brand’s reputation. And that all-important bottom line.
This article breaks down the how and why of choosing the right packaging for your Amazon business. And what happens if you go cheap. While it might be tempting to opt for lower-priced packaging solutions, the true measure of packaging’s effectiveness isn’t just in the material’s cost. Truly effective packaging addresses these two important points:
- The product reaches its destination well-protected and intact, and,
- The packaging meets with the customer’s approval where sustainability and waste reduction are concerned.
If it doesn’t do those two things, the real cost of the cheaper packaging option may be a lot more than you bargained for.
What Are The Effects Of Poor Packaging?
1. Product Damage & Increased Product Shipping Costs
The most obvious side-effect of poor packaging is product damage and loss. In 2022, we worked with a client who had chosen a lighter weight corrugate for their shipping packaging in order to cut costs. But as soon as they began shipping products out, the complaints of broken products began rolling in.
It’s important to know exactly what strength of corrugated cardboard your product needs. Perhaps even more importantly, specify it correctly with your supplier. If you do not, in order to save everyone money, the supplier may sell you a lighter weight than you need.
In addition to the frustration and cost associated with product damage, there is also the product shipping costs to consider. If the broken item must be sent back to you, shipping costs have now doubled. And if you send them a replacement product, now it’s two and a half times as much.
2. Further Damage: Brand Reputation, & Customer Loyalty
Brand reputation can also be damaged by poor packaging decisions. In one survey performed by Smithers, a well-respected industry expert in testing, consulting, information, and compliance services, 58 percent of consumers said that packaging damage would deter them from buying a product again. Not only that, but customers are more likely to warn others about a bad experience than they are to share with them about a good one.
We see it time and again: Customers quickly lose trust in vendors who can’t reliably deliver. Research shows that one-third of customers will switch to a different brand or vendor after a single bad experience, and they stay away for an average of two to three years.
3. Bad Amazon Reviews
If your brand consistently ships broken and damaged merchandise, expect the word to get out fast. Reports indicate that 41 percent of Amazon buyers go out of their way to leave a public review if the product is unsatisfactory. And remember, people are more apt to tell their friends about a bad experience than a good one.
But it’s also important to know that only one to two percent of buyers post Amazon reviews on products they buy. At that rate, it takes a lot of time (and effort too) to build up a solid reputation. A seller would need around 10,000 sales just to reach 100-200 reviews.
Unfortunately many brands don’t realize this dynamic until it’s too late. Not only is it important to strategize a stellar customer experience, every step of the way, but it’s also important to have a plan for the solicitation and procurement of reviews.
But even if a strategy for getting customer reviews on Amazon is further down the road for your brand, it’s never too early to ensure that the entire customer journey, particularly the arrival of their new product, is enjoyable, memorable, and definitely worth sharing about.
The Trust That Amazon Shoppers Put In Reviews
According to Oberlo, 79 percent of shoppers treat reviews like they treat a personal recommendation. And 57 percent of them read reviews on Amazon.com.
In addition, product pages that have customer reviews will convert three and a half times more frequently than those without.
The message is crystal clear: Amazon shoppers read reviews, and they trust them. So it should be a sincere goal of every brand to strive for a five star customer experience with every order. The packaging that their product arrives in, plays a big part in that.
4. Higher Amazon Fees: Returns Processing Fee Changes For 2024
As if potentially doubling product and shipping costs and tanking your rating on Amazon aren’t enough, there are Amazon’s fees to consider as you develop your e-commerce packaging strategy.
Per the Amazon Seller Central Help Page: “As of June 1, 2024, a returns processing fee will go into effect for all products (except apparel and shoes) with a high return rate by category, to address the operational costs of returns and to reduce waste. The fee will only apply to products that have return rates above a threshold specific to each product’s fee category. The fee applied per unit is based on the product’s size tier and shipping weight….”
Simply put, if your brand has a higher return rate than is considered the norm for other brands in your category, you now pay a higher rate for customer returns than other brands, for all the products you sell that have the higher return rates.
5. Administrative Back-up, Returns, & Delays
Damaged goods result in returns, fees, and poor reviews, all of which affect your seller ranking, but there’s more to the story. From procuring replacement products and new packaging, to the labor and time for processing the return, these orders require that everything be done twice. You’ve doubled your cost for that item, in addition to the time and energy cost, plus the cost to your reputation, and then even more Amazon fees. Bottom line: brands simply can’t afford not to have a strong packaging strategy.
Why Packaging Fails: What Makes Packaging “Bad”?
Though it may be easy to think that “a box is just a box”, all packaging is not created equal. Quality packaging materials undergo rigorous testing in order to ensure that they are up to the task of transporting products safely. But it doesn’t stop there, the size of the packaging as well as the inner materials play a part too.
1. Cheap Materials
Many Amazon sellers look for the most competitively priced packaging in order to keep costs down. Getting the price down on materials, even if only by pennies per unit, feels good in the short term and looks good on paper. But most of the time, it’s not the right answer. You must consider your own business, the products you sell, and what the journey from warehouse to the customer’s doorstep really entails. This way you can get a clear picture of what is needed packaging-wise.
2. FBA Packaging That Is Too Big Or Too Small
To be sure, packaging depends on the product. Whether items are perishable or fragile will play a role in the size of the package and the materials used. But it’s crucial, particularly on Amazon, to have sufficient packaging to make the journey while also keeping the size only to exactly what is needed. Because everything in an Amazon Fulfillment Center is automated, there are strict FBA size guidelines. If your product packaging is even ¼ inch bigger than a particular size/fee category allows, you will be bumped up to a higher rate, for every product you sell, which can unnecessarily kill your profits. There is no way to get an exception for your package’s dimensions; as a business you must ensure that the size of the packaging and the Amazon fees you’ll pay, align with your profit goals.
3. Outdated Inner Protection
Styrofoam peanuts and plastic bubble wrap are no longer the only options available in package protection, also known as “void fill”. Packaging engineering has come a long way in the last several years, and now products like air pillows, partitions, and sustainable paper shreds are better and more sustainable options for shipping goods. These can also lessen fees, and make the customer’s unboxing experience more fun and interesting too.
Passing The Test
You can do the best job in the world of designing and manufacturing a product, but if you can’t get it to the end user intact, your efforts are wasted. So first things first, ensure the packaging meets the industry standards for shipping, by having testing done in a lab. Packaging testing exposes your packaging to various stressors such as drops, vibrations, compression, and adverse environmental conditions. It’s important to consider all the ways your product can be compromised on its journey to the customer’s doorstep, so that your packaging can safeguard against it.
Here are some of the basic tests performed:
- Vibration: Sine, random, or bounce.
- Shock: Half sine, saw-tooth or trapezoidal pulses.
- Drop: Transit drop, bench handling.
- Impact: Drop-weight, pendulum.
- Climate Hazards: Temperature, humidity, rain.
- Mechanical Handling: Forklift handling, edge/corner drops, etc…
- Compression: Dead weight or machine testing at ambient and cold or hot conditions.
- Chemical Compatibility: At ambient or elevated temperatures.
- Leakage / Pressure: Positive and vacuum methods available.
Package testing includes packaging materials & components, primary packages, shipping containers, and unit loads.
Testing protocols look at the effects on various aspects of packaging, including contents, external forces, and end-use.
Packages can also be tested for recyclability and degradability.
With certification you can be confident that every shipment you send will arrive intact. This results in a virtuous cycle of high quality products, happy customers, and great customer reviews.
Right Size, Good Design & Ease of Use
Over-engineered packaging means unnecessary material and manufacturing costs. But under-engineered packaging results in damage and waste, so it’s crucial to strike the right balance. Remember, the product must reach its destination intact, the size of the package must be exactly what’s needed, and it should mesh with the customer’s idea of environmental friendliness. Making it easy to open, like the pull tabs on FedEx envelopes, is a major bonus too.
Single-Use or Multiple Use
Multi-use packaging may lower your total cost per trip, but that’s not always the case. It may make sense to strategize a way for customers to return the packaging to you. But again, it will come down to your own brand’s goals and the strategy you build.
Hybrid packaging or single use packaging may be more cost effective. The more research and testing you do, the more you’ll be able to zero in on the right option for you.
Your Brand’s Goals, Together With Amazon’s Rules
It’s crucial to form a strategy that keeps your numbers in the black and also aligns with Amazon’s regulations. Packaging that doesn’t meet Amazon’s standards will cause nothing but trouble in the form of higher costs and reputational damage. Storage, ease of disposal, and environmental impact will each have an effect.
Amazon’s Frustration-Free Packaging Program
Though participation is not a requirement for sellers, one way to ensure that your own packaging strategy aligns with Amazon’s is to take part in the Frustration-Free Packaging program, or at least know it well.
The following is from Amazon’s Help Page on the topic: “For Frustration-Free Packaging (FFP) certification, the packaging must be made of 100% curbside recyclable materials per applicable laws in the region of sale. FFP must be easy to open and all content removable by the customer within 120 seconds with minimal use of scissors or box cutter. FFP must not contain blister packs, plastic inserts, packaging peanuts, shredded paper, or welded clam shells.”
These guidelines can help point you in the right direction when designing your own packaging.
Amazon APASS Package Testing
Certification through a lab can take the guesswork out of Amazon packaging and prep requirements, and ensure you’re off on the right foot, both with Amazon and your customers.
What Is The APASS Network?
The APASS network is offered by Amazon to help support vendors, sellers and manufacturers in obtaining certification that shows their packaging meets Frustration Free Packaging (FFP) requirements, Ships-In-Own-Container (SIOC) requirements, Ships In Product Packaging (SIPP) requirements, and/or Prep-Free Packaging (PFP) requirements.
To Be Certified By The APASS Network, Items Must Be:
- Ready to ship with no need for additional packaging (SIOC/SIPP and FFP)
- Protected against damage (SIOC/SIPP and FFP)
- The correct size (SIOC/SIPP and FFP)
- Easy to open (FFP only)
- Recyclable (FFP only).
- ISTA 6-Amazon.com Testing certified – This is a certified packaging program developed by Amazon together with ISTA (International Safe Transit Association). The protocol addresses and tests for the risks of damage throughout the Amazon distribution channel – from every part of the supply chain down the line to the customer’s doorstep.
Ships In Product Packaging (SIPP) Discounts
Another thing to consider is the Ships in Product Packaging program (SIPP) now available for opt-in to all sellers who use Fulfillment by Amazon.
SIPP is a program where products are shipped to the customer in their original packaging, without additional packaging from Amazon. SIPP-certified products automatically receive lowered FBA fulfillment fees on each unit shipped. To learn more and take advantage of lowered FBA fees through the SIPP program, you can review the Seller Central guidelines here.
Knowing the fees, hidden costs, and the discounts too, can help brands like yours make more informed and proactive decisions for their Amazon operations. Lead with an intention of customer satisfaction, getting that five-star review, and then think about how you can optimize for cost.
The High Cost Of The Cheap Route
Poor packaging can lead to damaged products, higher shipping costs, bad reviews, and lost customer loyalty. All of which directly impact your bottom line. By prioritizing high-quality, appropriately-sized, and sustainable packaging solutions, you can avoid these issues and create a positive customer experience that drives repeat business and favorable reviews.
The upfront cost of high quality packaging is an investment in your brand’s long-term success and profitability. Make informed decisions, adhere to Amazon’s guidelines, and strive for excellence in every shipment. This way you’ll maintain a strong, trustworthy brand presence on the platform.
The right packaging solution for your Amazon business is equal parts protecting the products during transit, safeguarding your brand’s reputation, optimizing costs, and ensuring customer satisfaction. This is where it pays to know Amazon inside and out, or work with someone who does… like Troveres. Selling on Amazon doesn’t have to be overwhelming, or expensive. The key is to have an expert on your side, who runs your business like it’s their own.
How can Troveres help you? Get in touch.
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