We all can agree that saving money is a good thing. And, saving money when purchasing goods or supplies for your business is no exception. If you use plastic bags to package your product, you already know how important your bags are for the protection and shipping of your product.
But, that doesn’t mean that you shouldn’t evaluate what you are spending to ensure you are getting the best product possible for the best price. Knowing the right questions to ask yourself, and your manufacturer, can help you save money and it might save your manufacturer time or money as well.
If you are looking to reduce your annual cost for polyethylene bags you can ask yourself, and your manufacturer, these five questions:
The size and thickness of your bag will impact the amount of raw material that is needed during the manufacturing process. Raw material is one of the major cost components of your plastic bags. And, there are some industry standards to understand when price shopping or speaking to your existing manufacturer.
Thickness/Gauge of Your Bag
Maybe your product design has changed over the years and a modification to the thickness/gauge of your plastic bag is in order. Raw materials like plastic resins have changed over the years and are much stronger now than they used to be. This alone may offer you the opportunity to modify the thickness/gauge of your plastic bag, which is one of the greatest areas for cost reduction.
An important thing to know as a plastic bag consumer is that there is a generally accepted industry standard for material thickness: +/-10%.
For example, your bag specification may state you want a 2 mil plastic bag. If you evaluate that plastic bag and it tests out at a 1.8 mil plastic bag, then you are receiving a plastic bag with 10% less material.
You are probably saying to yourself, “but I’m paying for a 2 mil plastic bag and only receiving a 1.8 mil plastic bag.”
This is true, but when you entertain competitive bids for your plastic bags are you asking your new sources to quote a full 2 mil or are you asking them to quote the “industry standard” at 10% less?
This is a significant area of consideration when evaluating new suppliers and one that is often overlooked. It is always important to compare apples to apples when evaluating pricing for your plastic bags.
Let’s look at an example:
Your bag size is 10” x 12” x 002 (2 mil). You purchase 1MM of these bags annually. If your cost is $25.70/M your annual spend is $25,700. Now, that same bag at .0018 (1.8 mil - 10% gauge reduction) might be $23.65/M or an annual spend of $23,650. That is a cost savings of $2,050. That is pretty significant for one SKU.
Size of Your Bag
Over time, your product may change in size. When you do a product overhaul or make adjustments, it isn’t always top of mind to alter the packaging for your product as well.
While usually less of an issue than thickness/gauge, it’s still an area to take a look at as you do an annual review of your plastic bag specifications.
Plastic bag sizing has another “industry tolerance” assigned to it and that is typically +/- ⅛”
Just like with the thickness/gauge evaluation above, this is another significant area of consideration when evaluating new suppliers. Making sure you are truly comparing the same product when looking into the cost of bags at different suppliers is key to getting the best price.
In both of these instances it is always beneficial to send samples of your current bags to your other plastic bag manufacturers and ask them to do an analysis for you. Normally, they will be happy to do that analysis for you because it gives them the opportunity to give you their own pricing and recommendation.
We often find that customers are requesting their plastic bags be packed in case counts that are much less than they could be. The more plastic bags you can put in a corrugated box, the greater the opportunity for cost savings.
When increasing the number of bags per box, you are cutting down the number of corrugated boxes being used in total.
A rule of thumb we use is to not exceed 40# in a finished case of plastic bags. This weight is the maximum weight we prefer to ask our packers to lift for safety reasons. But, we do see a lot of customers wanting to pack less in each box.
Another reason to eliminate the amount of boxes you use to pack your order, is due to inventory size. The fewer corrugated boxes that you receive per order minimizes the inventory space you require to inventory your SKU’s.
This can be a great way to increase your warehouse space and in-turn, minimize cost.
For those of you who are using basic one color/one side printing (similar to a generic suffocation warning) you may want to consider a random repeat print option versus a registered print style.
There are a few options out there in terms of print style and details. Getting the right type of print for your needs will ensure you are only paying for the minimum requirement.
Depending on your specific bag specification there is a good possibility you can find some significant cost savings by adapting a different print option. You can read more about the different types of printing options in our post, Random Repeat Printing VS Registered Print.
If you order a certain plastic bag on a regular basis then applying a blanket order purchasing strategy to this particular plastic bag can save you money.
Working with your supplier to evaluate the historical usage of a particular plastic bag along with your projected usage for that same plastic bag, may lend itself to a blanket order.
A blanket order allows your supplier to manufacture your bags as their production schedule warrants. This may provide some cost savings that can be passed along to you as the customer.
Along with the blanket order option you may also consider a stock and release program with your supplier as another means to drive costs out of your annual plastic bag spend. For more information on stock and release programs click here.
If you are purchasing multiple SKUs of plastic bags that are the same width then maybe you are a candidate for tubing.
If you are buying a 6” x 10”, 6” x 12”, 6” x 18”, and 6” x 24” then you should consider buying 6” tubing and an impulse sealer and making your own bags.
By switching to tubing you cut down on the amount of SKUs you need to inventory and you control your finished bag making schedule as you need them. Purchasing tubing versus finished bags should drive cost out of your annual spend and is another option to be sure you consider.
If you’re looking to decrease what you are currently paying for your poly bags, these five questions are a great place to start.
Don’t ever hesitate to question your manufacturer when it comes to reducing cost. You never know if there are ways that you can save you money and they may even prove to be more efficient for your manufacturer in the end as well.
If you are looking for more information about how you can reduce the cost of your bags, please reach out to me here and I’d be happy to chat with you.