Top 10 Packaging Design Innovations that Could Change 2019
There are so many different types of packaging designs, but what is a packaging innovation?
Over the years there have been significant updates and breakthroughs in the packaging world to make package designs more desirable for customers and more environmentally friendly.
The updates aren’t stopping now, are there are plenty of new packaging design ideas that have either just hit the market or are planning a market release in the future.
Either way, these packaging innovations could change how we shop and consumer products, all while making the world a cleaner place by using less scarce resources and lowering the amount of trash we all use.
1. Zero Waste Packaging
To cut down on packaging waste, one company decided to use their natural plant life as a source of packaging. Universal Biopack uses bamboo and cassava to combat the massive amount of trash produced by the world.
After five years of developing and perfecting a formula, they have finally created zero waste packaging from leftover scraps after the chopstick manufacturing process in Thailand.
The company hopes to eventually replace styrofoam boxes, plastic bags, or anything that will result in trash that can’t be decomposed or recycled.
Universal Biopack is currently selling to restaurants and manufacturers, but they are having trouble finding new clients due to higher packaging costs, even if it is more environmentally friendly. This doesn’t mean they are giving up but instead trying to grow environmental awareness in the hopes to increase their demand.
2. Skin Pack
Food and food packaging waste is a big concern in the industry. To tackle this problem Advanta, a global packaging supplier, has created a skin pack aluminum poultry tray and film combination that is the first of it’s kind.
The food is vacuum packed, and the tin is shaped around the food, therefore protecting poultry from oxygen to increase the shelf-life by a maximum of 300%. The packaging design also has a temperature range of -40 degrees Celsius to 400 degrees Celsius. The aluminum tray is 100% recyclable making it more environmentally friendly than other packaging design options.
The Skin Pack is easy to unpack. The consumer has to peel off the plastic skin off of the poultry, which will then be ready to be placed directly into the oven and onto the table.
This packaging design could force competitors to do the same thing or something better to reach the shelf life capacity that Advanta reached with their packaging. Not only will it sound appealing to grocery stores, but consumers will also be interested in the increase shelf life.
3. Self Chilling Cans
Nothing is worse than a lukewarm drink. Chill-Can from The Joseph Company aims to change that with their new self-chilling cans that will be distributed by 7/11.
The cans are simple to use: turn the can upside down, twist the base off to release liquefied CO2 that acts as the active coolant, and wait only 75 to 90 seconds for a nice and refreshing drink. The drink, which is stored in a 100% recyclable can, is lowered to about thirty degrees.
Part of the reason that these cans are gaining traction is that people don’t like to wait. Self-chilling cans eliminate the need to wait for your drink to get cold, whether it is via refrigerator, freezer, or ice cubes. This means that you no longer will need ice cubes watering down your beverage.
The demand for self-chilling cans are on the rise, and The Joseph Company is opening a new production and distribution plant in Youngstown, Ohio, along with their current plant in Irvine, California.
The self-chilling cans can have a significant impact on the beverage industry and could push competitors to start manufacturing their own self-chilling cans, whether it be for soda, sports drinks, alcohol, or more.
4. Insignia Technologies
This technology uses patented intelligent pigments and inks that will change colors depending on the temperatures of CO2 levels in the product.
What does this mean? This technology will be able to detect how fresh food is when the package is first opened.
This can help calm the minds of the consumer and will reassure them that their product stayed fresh during cold chain delivery and that the package wasn’t damaged in any way. If the label is blue, it means that the package is leaking and shouldn’t be consumed.
Once the package is opened, the label can remind consumers how long the food has been in the fridge. The center dot on the label will change color from yellow to purple. Yellow indicates that the product is fresh hile purple indicated that product is past best.
reCup is the first fully recyclable paper cup and began production in October 2017. It is made from EarthCoating, and they have had a rise in demand. They are currently expanding with ten million euros at their expense due to the high demand.
The reCup is made using mineralized resin coating which can break down the cup, unlike standard paper cups. The cup works just like any other paper cup and is currently taking Europe by storm.
This environmentally friendly cup is a great way to reduce waste, and this could cause other companies to start making their cups just as environmentally friendly as their competition.
6. Self-heating Food Packaging
Chengdu Weilan Enterprise Marketing takes convenience to the next level with a self-heating food packaging design. The instant mini-hotpot will make it easier to bring fresh food on the go. Customers can fill the easy to use hotpot with any instant food that requires water. This includes soup, pasta, rice, and more!
To start the water-activated heating pack, all you have to do is add cold water. 15 minutes later your food will be hot and ready to eat. This new packaging design innovation is perfect for meals on the go when you want a fresh and hot meal but don’t have a microwave to heat up your food. It can also be used for camping, long travels, or when you don’t want to dishes after your meal.
This new type of packaging design could open the doors to more on-the-go meals that make it easier for consumers to buy meals without the need for a source of heat. If this product becomes popular, the demand could push other companies to improve their packaging to allow the heating of their product with water.
Ba Shu Lan Ren’s mini-hotpot is currently only available online in the Eastern regions, but there is still a possibility for expansion into the west in the future.
7. Compostable Coffee Capsule
Flo, a European food packager, has teamed up with NatureWorks to introduce a compostable coffee capsule called Gea.
Gea was designed to address environmental issues and to reduce waste associated with coffee. It has been approved for food contact and is currently undergoing testing by TTÜV Austria and the Italian Composting and Biogas Association (CIC) for compostability certification.
The capsule will allow for a simple solution to delivering coffee grounds and will be the first commercialized compostable coffee capsule made from 100% Ingeo. It is also very shelf-stable and will not show signs of aging for years after production. The capsules also protect the coffee from oxygen, preserving the taste and aroma of the coffee to provide better tasting coffee for customers.
Gea will hit the European marking in October 2018 and will hopefully push other food packaging companies to start researching how they can produce environmentally-friendly packaging designs.
8. Atmosphere Packaging
Baked goods can be hard to keep fresh, but Cryovac has created a modified atmosphere package that will allow consumers to keep their baked good fresh for over 40 days.
A longer product life could have a significant impact on distribution and inventory control for businesses and could also be appealing to consumers at home.
The packaging design can prevent cross-contamination, preserve various types of baked goods, and can protect the product during shipment. It can withstand freezer temperatures and has a low oxygen intake to preserve the product and protect it from molding.
9. Bees Wrap
One of the primary sources of waste in a household comes from the kitchen, whether it be plastic wrapping, tinfoil, various types of bags, or more.
In 2012, Sarah Kaeck started the process of reducing trash in the kitchen with Bees Wrap, a saran wrap or plastic bag alternative. Bees Wrap is made with organic cotton and beeswax, organic jojoba oil, and tree resin. It is reusable and washable, which will eliminate a lot of waste.
Bees Wrap is very simple to use, just wrap the product and it will seal with the natural warmth of your body. The wrap will always stay on the product if it is placed in the refrigerator. After one use, wash the wrap with soap and water, and it can be used the same way again for about one year.
Bees Wrap is slightly more expensive, but the reusable aspect will make it worth the investment, especially considering that it can be reusable over and over again for a year. Bees Wrap could pressure Ziplock or other kitchen packaging companies to look for reusable or environmentally friendly options in the future.
10. Direct Thermal Film Label
Leuco dye is a critical part of direct thermal labels, but the main manufacturers in China have shut down. These shutdowns have resulted in a leuco dye crisis as the prices for leuco skyrocketed to five times their average price.
Luckily, there has been a solution. Inspired by Jindal Film, Smith Corona has started to manufacture direct thermal labels without leuco dye. These labels use heated carbon black on film.
Carbon black is fifty cents a pound. For a slightly higher price, you’re getting the same print quality, and your media is more durable. The labels are waterproof, UV resistant, recyclable, and ages well.
You can print on the labels, and they can be used in any environment – warm or cold.
These labels could be a solution to the leuco dye shortage if the crisis isn’t resolved soon.
How to Make a Barcode Inventory System for a Small Business
Inventory management is an essential aspect for many businesses – big or small. While it is possible to track inventory by hand or with spreadsheets, using a barcode inventory system is much more efficient in the long run. It’s time to take control of your inventory and save yourself time, money, and unnecessary work with a barcode inventory system.
What are Barcodes?
In simple terms, a barcode is a picture with numbers or text, and the picture represents data visually. The picture stores information and with a scanner that product information can be instantly transferred to a computer.
One-dimensional barcodes are made up of vertical black lines and the space between the lines allows the scanner to identify the product.
Two-dimensional barcodes are typically square-shaped and consisted of different dots and shapes that store information. These barcodes can hold more information than 1D barcodes. 2D barcodes can also store website information, and you can scan the barcode with your phone to take you to that website.
Why Use Barcodes?
As a business grows, the need for a barcode inventory system becomes more and more necessary with more inventory to handle. Implementing one now will prepare you for the future and give you several benefits in the meantime!
A barcode inventory system is much more accurate than keeping inventory by hand. Human error can be severely reduced with barcodes and your inventory will have more accurate data. In fact, studies show that a person will make at least one date-entry mistake every 250 keystrokes. A computer has an error rate of one error every 36 trillion characters scanned.
With barcodes, you can easily find out what you have in stock and what you don’t. When a customer buys a product, you can scan the barcode and take it out of your inventory records immediately. You will always have accurate and real-time inventory data so you can make proper business decisions throughout the day.
With barcodes on your inventory, all of your products can be instantly read and data can be easily transferred to a computer. This will make the process of checking a customer out after a purchase much faster. Instead of manually entering each product and figuring out the total price, the computer can do it for you.
How to Start
Creating a barcode inventory system is much more inexpensive than people think.
First, you will need to create a product code. You can have a Universal Product Code (UPC) or stock keeping unit (SKU).
A UPC can be found on most products and are standardized for business use. To receive a UPC, you can register with Global Standard 1 to get a unique code for your company. This code can be used to identify and track products across the globe.
A UPC has many benefits. It can protect your company’s brand from theft, allow you to sell on Amazon, allow customers to access information about the product online, and they can be used in most inventory management systems. A UPC is typically 12 digits long and used for external use.
You also have the option of using a custom SKU number for your products. SKU codes can be created manually or in an inventory management software. A SKU is unique to a company, used for internal operations like keeping track of stock and are typically eight digits.
From there, you need to create a barcode for each product code. You can use an online barcode generator to create a barcode for free or utilize a barcode software.
Next, you need to print your barcode. Most standard inkjet and laser printers can print barcodes with a label sheet. However, thermal printers are best for printing barcode labels. The recurring costs for thermal printers are much lower than inkjet and laser printers. Not only that, but thermal printers are very easy to maintain, have a longer run life compared to other printers, and are fast and quiet. Thermal printers don’t use ink or toner and you can get labels to print from Smith Corona – we offer the lowest prices on the market!
Picking a Scanner
Having barcodes won’t do a business much good if you don’t have a scanner to get the information from the barcode. There are a few different options when it comes to buying a barcode scanner.
If you are looking for mobility and flexibility, you can get a wireless scanner. These scanners require batteries and you will need to ensure you always have backup batteries ready. These scanners are perfect for real-time inventory management and you won’t be restricted by a power cord. With wireless scanners, you can save the data onto a memory card and put it in the computer later, connect to a computer with Bluetooth, or buy a scanner that stores the information on the device itself.
There is also the option for a wired scanner. Wired scanners are usually more inexpensive than wireless but they don’t offer as much flexibility. The scanner will need to be plugged into an outlet and the computer that you are storing inventory information on. Wired scanners are very easy to use and are great for checking customers out.
Small businesses will benefit most from a handheld barcode scanner, whether it be wired or wireless. Expect to spend around $100 on a scanner. That may seem pricey, but the investment will be well worth it in the long run.
Choosing a Barcode Software
There are several options for barcode software, but not every software will be a perfect fit for your company. Each software has different advantages and disadvantages, so it is important to explore your options and look at the needs of your company.
Bartender is a software that is used for creating and automating labels. They are always changing to meet industry regulations to ensure you are always within regulation. You can choose from several different label templates and designs. They also offer a lot of database solutions like reading from CSV or Excel files.
Label Matrix is a low priced and simple barcode design software, but it is still very practical and useful. You can customize barcode and create or connect to a database. Printing is made easy and they help ensure the final product looks exactly how you wanted it to.
Both softwares allow for you to try a demo before committing to a purchase. You can test out both to determine what works best for you and how you can most efficiently use your money.
As you can see, implementing a barcode inventory system can be very easy, and it looks more complicated than it is.
Putting in the effort to switch from taking inventory by hand to a barcode inventory system will definitely be worth it in the long run, and there are lots of ways to get started!
Proposition 65 is another name for the Safe Drinking Water and Toxic Enforcement Act of 1986. It is a California law that aims to protect drinking water sources from any toxic substances that can cause harm.
Proposition 65 tries to reduce or eliminate exposures to chemicals that can cause cancer, birth defects, and other reproductive problems by requiring warning labels.
Any substances that are known to have a 1 in 100,000 chance of causing cancer over a 70-year period or substances that cause birth defects must be labeled.
The act makes it illegal for anyone to discharge any of those substances into drinking water sources and for businesses to knowingly expose the substances to anyone without providing a clear warning.
Proposition 65 has caused hundreds of products nationwide to remove harmful chemicals from their products.
Chemicals that are covered by Proposition 65 are regularly maintained and can be added or removed from the current list based on the current scientific information.
Some of the most popular chemicals on the Proposition 65 chemical list are Lead, Crystalline, Silica, Chromium, Wood Dust, and BPA.
A full list of over 800 chemicals that fall under Proposition 65 can be found here.
Warnings of these substances can be found everywhere in California, and it is very common to see one.
Changes to Proposition 65
New changes to Proposition 65 went into effect on August 30th, 2018. It’s important that companies stay up to date to avoid lawsuits and fees.
Warning labels used to only have to say that there were harmful substances in a product. They did not disclose what chemical was being used or what the level of risk was.
Now consumers will be informed of at least one of the names of those chemicals and exactly what risks the chemicals possesses.
Another change was made to keep up with the growth of e-commerce.
Internet sales now must follow the rules of Proposition 65 and warnings must be displayed on the display page of a product before the purchase of the product. You must provide a hyperlink to www.P65Warnings.ca.gov so consumers can find more information on Proposition 65.
New 2018 labels will need to have a link to a website (www.P65Warnings.ca.gov) with more information on Proposition 65, and they need a warning symbol with an exclamation point in a yellow and black triangle.
The labels need to be in at least six-point font and must have another language on it other than English.
Retailers are now only responsible for providing warnings if they have been notified of changes.
The word “WARNING” in all capital letters and bold font must be on the label.
These on-product warnings “must be in a type size no smaller than the largest type size used for other consumer information on the product” and must have a minimum six-point font.
All these new regulations will apply to any products that are manufactured after August 30th, 2018.
What You Need to Do
If your company know needs labels in order to comply with Proposition 65, it’s very easy to get them.
It’s important that your labels are high-quality and able to withstand several different kinds of weather and environmental changes. At Smith Corona, you can buy factory direct labels in various sizes. You can find more information on durable labels at the lowest price here.
If you are unsure whether you need labels, you can find out more about the Proposition 65 chemical list below.
How Chemicals are Added to Proposition 65
The State of California is required to update their list of harmful chemicals at least once a year. There are four ways a chemical can be added to the list.
Labor Code (LC)
Chemicals identified by the World Health Organization’s International Agency for Research on Cancer as a cause of cancer in humans or animals.
State’s Qualified Experts (SQE)
A chemical can be added if two independent committees of scientific and health expert find that the chemical causes cancer, birth defects, or other reproductive harm. The Carcinogen Identification Committee (CIC) and the Developmental and Reproductive Toxicant Identification Committee (DARTIC) meet annually to evaluate the chemicals that fall under Proposition 65.
Formally Required to be Labeled (FR)
If an agency of the state or federal government requires a chemical to be listed as causing cancer, birth defects, or other reproductive issues, it will be added to the list.
Authoritative Bodies (AB)
The CIC and DARTIC can designate organizations as authoritative bodies. Right now authoritative bodies include the US Environmental Protection Agency, US Food and Drug Administration, National Institute for Occupational Safety and Health, the National Toxicology Program of the US Department of Health and Human Services, and the International Agency for Research on Cancer.
Drawbacks to Proposition 65
Proposition 65 is often criticized because it relies on citizen enforcement rather than government enforcement.
The law allows anyone to bring forward a case if a listed chemical is found in a product. However, a substance can be way below the amount required for labeling and a case can still be filed. This causes businesses to spend tons of money in court to prove they are within regulation and defendants usually end up settling to avoid further expenses.
In 2008, there was a total of $14.6 million in attorney fees and only $4.6 million in civil penalties as a result of Proposition 65.
As a result, more and more products have warnings on them, and consumers don’t know what is actually harmful and what isn’t.
There is also another big flaw in Proposition 65. Since new scientific studies are always being done, the harmful chemical list is continuously growing and changing.
Constant changes make it hard for companies to update their labels and they may be targeted by a “bounty hunter.” Bounty hunter is a term for people who actively seek out companies that are in violation of Proposition 65.
Although there is a one-year grace period to provide warnings for a new chemical added to the state’s list, companies still have a hard time avoiding bounty hunters.
Take the chemical Cocamide DEA for example. Cocamide DEA is a foaming agent used in shampoos and other related products.
On the one-year anniversary of Cocamide DEA being added to the chemical list, there were dozens of claims made by bounty hunters against manufacturers and retailers. Many of the companies with claims made against them tried to remove unlabeled products from shelves but were unable to remove all of their old inventory from the market.
If you need labels to stay in compliance with Proposition 65 and to avoid any bounty hunters, you can visit Smith Corona for more information.
Why is the FSMA needed? According to the Center for Disease Control and Prevention (CDC), 48 million people get sick due to a foodborne illness every year. To make matters worse, 128,000 people are hospitalized and 3,000 people die every year.
The FSMA was designed to prevent foodborne illnesses and to have a standardized recall or action plan in case of a discovered illness. Instead of focusing on how to respond to a foodborne illness, the FSMA focuses on how to prevent illness in the first place. The FSMA allows the FDA to have mandatory recall authority and it will give them new powers to keep the public safe from any bad produce.
First off, food producers and importers must pay an annual $500 registration fee. This fee will go towards the funding of FDA inspections, enforcement, and other food-safety activities that will be covered in this article.
FDA inspections are changing – and for the better. Although the FDA is conducting fewer audits, they are doing much more in-depth with the audits they are conducting. They are looking deeply into your operations to make sure you are keeping proper records and actions towards the safety of the consumers.
The FDA is also starting to focus more on industry accountability rather than individual accountability. If a product is recalled, everyone involved in the delivery and manufacturing of that product will be held accountable.
FSMA compliance can be overwhelming with all the requirements and guidelines. Luckily, we’re here to break it down for you and highlight the essential points your company needs to be in compliance.
Written Safety Plan
As a food company, you will be required to develop food safety plans based on the type of foods you are selling. Fresh produce that can easily go bad or cause sickness must be evaluated more thoroughly and you must take into account the packaging, processing, and manufacturing.
Companies then must identify and implement preventative controls to try and prevent any possible hazards. For example, if you sell deli meat then a preventive control could include employee training on hygiene and environmental awareness.
This will provide anyone with an idea of how your company works, where your food goes, and how it is handled. This written plan should be extremely detailed.
This plan not only ensures you are doing everything you can for the safety of consumers, but it also helps you better understand what you can do to make sure others in the industry are complying to the same rules. If you have more than one facility, you should have a plan for each one.
If one part of the supply chain drops the ball, it doesn’t matter if the rest of the chain takes precautions to ensure the freshness of the food, it would have already been ruined.
Because the supply chain consists of so many different pieces, the FDA is focusing on the industry keeping each other accountable. If a product is recalled and causes harm to consumers, everyone involved is now held responsible for it.
With a written plan, you can detail exactly what your company does for food safety and you can explain what you ask of your suppliers or other companies. The main part of the plan that the FSMA wants are any foreseeable hazards and how those hazards will be monitored or handled in case of an emergency.
Your plan should include equipment used, the layout of your facility, and how your company operates on a daily basis.
Product Testing and Environmental Monitoring
The FSMA requires that your company has preventive measures in place for a facility. They want to make sure any hazards are being controlled and actions are being taken to prevent contamination. This includes product testing and environmental monitoring.
The frequency of tests will be facility based, but your company’s past records will be taken into account. If your facility has been linked to outbreaks in the past, you will have to have product testing more often than others.
The same policy goes for environmental monitoring. The FSMA wants to make sure you are using your facility and the equipment inside of it safely and sanitarily.
Have a Preventive Controls Qualified Individual
A preventive control qualified individual (PCQI) is someone who has completed specific training in the development and application of preventive controls. However, they can also be qualified through prior job experience they may have had if they’ve developed and applied a food safety system.
A written safety plan, as mentioned above, must be prepared or helped prepared by one of these individuals and it is their responsibility to document and follow the plan.
If you need a PCQI, you can get certification from the Food Safety Preventive Controls Alliance. In this training, you will learn how to develop a food safety plan and will gain insight on how to follow through with that plan.
If your company has several facilities, you are allowed to have the same PCQI for multiple locations. There are no restrictions on the proximity of the facilities. However, each facility must have a unique food safety plan and must be implemented to the specific facility.
Training is a big part of FSMA compliance. It’s essential your employees are trained on all the food safety policies you want to enforce.
However, training isn’t entirely up to your company. The FDA works with partners around the world to promote training to all food suppliers. Any participants in their training receive documentation of completion.
All these new FSMA regulations can be confusing, and the FDA is also offering training on understanding the requirements of these new preventive controls and regulations.
If you are a carrier, you are responsible for providing training for your employees. This includes making them aware of potential food safety problems, sanitary practices, and correct logging practices.
The FSMA requires that you establish and maintain all records of training. This is so the FSMA can go back and make sure the correct people were trained in a correct manner.
It’s vital you keep records of everything your company does. Records can be kept as original documents, copies, or electronic records.
Trucks must be checked to make sure they are in an appropriate sanitary condition before the transportation of any food not completely enclosed by its container. The food that goes inside the truck must also be checked to make sure they haven’t gone bad or been infected with pests. This is crucial because bugs could easily contaminate other food on a truck as well as any future food that goes onto that truck.
The drivers must have written procedures for them and they have to keep records of everything they do in case the FDA wants to review those records.
After transportation, vehicles must be cleaned to eliminate cross-contamination from different foods.
Since transportation is such an important part of the supply chain, the FDA is using its partnership with other federal agencies to help enforce these new rules. The US Department of Transportation, along with other state, local, and tribal entities, will be helping implement these new rules.
The FDA will be carrying out inspections while the Department of Transportation will be establishing procedures for the inspections to be conducted by the FDA or other agencies.
Here are some of the things the FDA will be looking for:
Vehicles and equipment used must meet specific temperatures to prevent food from going bad during transportation
Records that the required temperature was pre-cooled and maintained during transportation
Information that shows how and when cleaning is done on the vehicles
Records of training any personnel involved in transportation
Accurate and Reliable Labels
The FDA is currently working on implementing traceability regulations to implement to the FSMA.
While the FDA works on regulations, the industry has begun a voluntary program, the Produce Traceability Initiative (PTI), designed to help the industry maximize tracking and tracing strategies while aiming towards a standardized industry approach.
Although being part of the PTI isn’t a requirement, it is recommended to start implementing the PTI now because it is likely the FDA will put it into new regulations.
Labels that allow for barcode reads will make it easier for the FDA and the industry as a whole to stop foodborne illnesses and save time and money during a product recall.
The use of labels will give companies an accurate look at where a product has been and where the product is going, along with what other products it may have come into contact with during transportation.
FSMA Compliance Dates for Preventive Controls of Human Food
Very Small Businesses
A very small business is any business that earned less than $1 million a year during a three year period. Preventive controls for food need to be FSMA compliant by September 17th, 2018. However, there are some extended compliance dates. A new compliance date of January 27th, 2020 will apply to the following facilities:
Facilities that handle packaging or holding activities on produce RACs
Facilities that qualify as secondary activities farms
Facilities that could qualify as farms if they didn’t color RACs
A business in this category must average equal to or more than $1 million per year during a three year period and they must have more than 500 full-time employees.
The compliance date for other businesses was September 19th, 2016. Unfortunately, if you missed that date you have also missed the extended compliance date of January 26th, 2018 if you are one of the following facilities:
Facilities that handle packaging or holding activities on produce RACs
Facilities that qualify as secondary activities farms
Facilities that could qualify as farms if they didn’t color RACs
A small business is any business that employs fewer than 500 full -time employees and their compliance date was September 18th, 2017.
However, don’t panic yet – you may qualify for an extended compliance date if you are one of the following facilities:
Facilities that handle packaging or holding activities on produce RACs
Facilities that qualify as secondary activities farms
Facilities that could qualify as farms if they didn’t color RACs
Businesses Subject to the PMO
Pasteurized Milk Ordinance, or PMO, businesses must sell Grade A milk and milk products that are covered by the National Conference of Interstate Milk Shipments (NCISMS).
The compliance date for these businesses is September 17th, 2018.
Benefits of the Produce Traceability Initiative (PTI) and Why Your Business Should Participate
Produce Traceability Initiative, or PTI, is a voluntary program designed to help companies in the produce industries maximize their tracking and tracing strategies. They aim towards a standardized industry approach to how fresh produce products are labeled and tracked.
PTI is an industry-led initiative that is aiming to get its participants to use case level tracking, electronic record keeping and using Global Trade Item (GSI) system standards for product information.
Here are some of the many benefits the Produce Traceability Initiative offers:
Gives confidence to the consumers and the government that the industry is committed to food safety.
In case of a potential recall of a product, the scope is limited and it will cost less to safely and quickly get harmful food off the market.
Speeds up the delivery and transportation process with a standardized method.
Allows for accessible and electronic recordkeeping.
The PTI Action Plan was first launched in October of 2007. Today, most products can be tracked back from company to company throughout the supply chain. Products can now be easily traced between multiple buyers and sellers.
Why is the PTI Important?
Currently, the Food and Drug Administration (FDA) is coming up with traceability regulations to implement the Food Safety Modernization Act. However, many in the industry believe the FDA isn’t moving fast enough. That’s where the PTI comes into play.
Although it is not legally required, many food processors believe it is important to begin implementing PTI now. Members of the produce industry should start complying with PTI now so they aren’t struggling to keep up when new standards and requirements are issued by the FDA.
Not only is PTI important for the produce industry, but it is also crucial in the eyes of the customers. Consumers want to have confidence that the food they are buying and eating is safe and full traceability in case there is a recall.
Every year the produce industry handles about 6 billion cases of produce in the United States alone. With so much food moving around so frequently, the industry leaders realized that a systematic and industry-wide approach would be beneficial for everyone. Not only will it improve the speed, efficiency, and visibility of the supply chain, but it will allow for people quickly narrow the impact of product recalls before sickness or in worst case scenarios, death.
“When fresh produce leaves our fields, we should be accountable and responsible for the food we put into commerce. With this system, we know where it came from and we know where it goes,” said Jamie Strachan, CEO of Growers Express.
There have been instances in the past that have called for more control visibility for the produce supply chain.
In 1993, an E. coli outbreak was reported from the popular chain restaurant, Jack in the Box. Due to the outbreak, 731 people were infected from contaminated beef patties from 73 different locations. The outbreak resulted in 171 hospitalizations and four deaths. Lives were changed forever and the public called for better control over products so a massive outbreak would never happen again.
It is important for companies to start implementing PTI for the benefit of the public and the reputation of your company. Jack in the Box is still recovering from the outbreak that occurred over 25 years ago.
Who is Involved With PTI?
PTI is not legally required, so companies must volunteer to be a part of it. Luckily, there are several companies who volunteer their time and money with the goal of helping the PTI become an industry standard.
Companies join the PTI because they want to keep consumers safe and protect their brand image. PTI helps give consumers confidence in the food they are buying since they know everyone is working together to fix problems that arose in the past.
Many companies, from the farms to the stores, volunteer to keep the fresh produce supply chain safe. Here are some of them:
Associated Wholesale Grocers
Dawson Orchards, Inc.
Consumers Produce, Inc.
Dole Food Company
Publix Super Markets
The Kroger Company
How to Get Started – Joining PTI
First, a company will obtain a GS1 prefix that will uniquely identify their company. Next, companies will assign a Global Trade Item Number (GTIN) to each of their items that are involved in the supply chain in any way.
If you sell another brand’s products, you will be provided a GTIN and the corresponding data from brand owners. Next, you will put the information on your packages so they can be traced throughout the supply chain.
Your labels should have information that is readable by humans as well as encoded information on a barcode. This will allow you and other companies to read and store information on each case of food, whether it be inbound or outbound. Through the use of GTIN and barcodes, products will be able to be easily traced back to any destinations they were at.
GTIN is used globally and uniquely identifies products, product information, and manufacturer information.
Once a handler has their GTIN information, they can search their own systems to find information about the path of a specific product – where its been and where it is going. This will allow for companies to quickly determine where a product came from and what was exposed to that product in case of contamination.
To test your labels and ensure they are PTI-compliant, you can submit a generated barcode to the GS1 US Verification Services program. In return, you will get a four to eight-page report on the structure and readability of the barcode you submitted. This process is to ensure other companies can properly read your labels on their equipment to maximize visibility.
In order to be PTI compliant, your labels should include the correct GTIN information and the company needs to track who receives what products with electronic and traceable records.
To be PTI compliant, you must have a PTI label that contains the GTIN, lot number, and PTI voice pick code so the supply chain can be easily traced.
Your labels should also be weather resistant so that you have more flexibility with your products.
Labels can be costly, but luckily there are low-cost options.
Smith Corona offers low-priced direct thermal and thermal transfer labels and either label can be PTI compliant.
At Smith Corona, we make all our labels in-house with our state-of-the-art equipment. Our products go through rigorous quality control testing to ensure we are offering our customers the best labels possible.
Our thermal transfer labels offer errorless barcode reads and are resistant to heat and reactive chemicals. They are very durable and can last a long time without any scratching or fading. They can be stored in various temperature environments and are perfect for long-term storage.
Our direct thermal labels are high-quality, easy to scan, and cheaper than thermal transfer labels because there is no ribbon required to print a clear image.
It’s important to use a high-quality label to ensure durability and errorless barcode reading and Smith Corona offers just that at the lowest prices on the market.
Joining PTI shouldn’t be costly, but it can be without the right labels.
For the first time in over twenty years, the labeling industry is seeing multiple price increases.
Almost everything that is used to create a label is seeing price increases, from paper to silicone.
Everyone is facing the same problem, and no one is used to these price increases, but here at Smith Corona, we are still doing everything we can to get you high-quality labels.
But why are price increases happening, and why are they increasing every quarter? Unfortunately, there are several reasons.
Silicone and Adhesive Shortage
Silicon metal, the material used to make silicone, is mainly found in China. Unfortunately, supply cannot keep up with demand and new tariffs will make it even more costly for U.S. silicone producers to get their hands on the raw materials.
Due to tariffs, the price has almost doubled for silicone metal, and this hurts the market because 60 percent of the global supply of silicone comes from China.
In May, Sun Chemical’s prices were raised by 30 percent on all their silicone based products. Sun Chemicals is the largest producer of printing inks and pigments in the world.
“The ongoing silicone shortage has caused our suppliers to continue increasing prices beyond anything we have seen in recent years,” said vice president of Sun Chemical, Dennis Sweet. “While Sun Chemical has utilized all its resources to offset these shortages and increases, we need to pass some of these increases on.”
Sun Chemicals isn’t the only one seeing price increases in the industry. According to the Alexander Watson Associates’ annual survey of industry professionals, the concern for the availability of raw materials is high among members of the industry. In addition, all respondents of the survey said they experienced cost increases throughout 2017, and most of them expect the costs to continue to rise throughout all of 2018.
In early 2017, Momentive workers began a strike that shut down the silicone manufacturer for over two months. On top of that, they also shut down silicone production in their Germany facility.
“Silicone facilities worldwide have fallen behind necessary demand,” said Alex Sechi, a senior account manager for BRB International B.V., a producer of silicone. “The demand has increased all over the world.”
Unfortunately, there is little hope for a decrease in pricing for silicone.
“We know this is not a short-term problem,” said Zack Beier, director of purchasing at Q Holding Co, a manufacturer of silicone products. “There’s not one single constraint that can be remedied to solve the industry’s problems.”
The silicone market is expected to be extremely tight for the next two years and the price increases show this.
Adhesive Price Increases:
H.B. Fuller: 5 – 12%
Ashland Inc: 3 – 4%
Silicone Price Increases:
WACKER: 10 – 20%
Evonik Industries AG: 1 – 10%
Ashland Inc: 3 – 4%
Paper Price Increases
There has been a worldwide increase in the demand for pulp used in papermaking.
It is believed that part of these price increases is a result of the rise in demand for recycled corrugated boxes, and China refusing to take highly contaminated recycled fiber. Chinese paper manufacturers are buying pulp in bulk for those boxes and it reduces the pulp supply for the label industry.
Pulp prices have increased by 30% in the last year, and they don’t show signs of slowing down as sellers continue to raise their prices. According to the Federal Reserve Economic Data, the producer price index for pulp, paper, and allied products went from 167.4 in February 2017 to 219 in July 2018.
These increases have been running multiple paper mills out of business, including West Linn Paper Company. West Linn was forced to close down after 128 years due to the lack of available pulp.
Another factor to the increase is that numerous paper mills were losing money and shutting down. Some of these issues are a result of the economy while others are environmental. Hurricane Irma and Hurricane Harvey have resulted in a shutdown of 18 pulp and paper mills in the United States.
Since 2010, there have been eight major coated freesheet paper mill closures.
With fewer paper mills in operation, the total capacity has been reduced by 27% since 2010. The price increase for paper is unavoidable. With recent closures, the market is now tight and paper prices have gone up.
On top of that, Appvion filed for bankruptcy in October of 2017. Appvion is the third largest paper coater in the world, producing up to about 50% of all the coated direct thermal paper in the United States. Prices have increased by almost 30% due to input prices as well as Appvion trying to get to profitability, but they are still under pressure financially.
This results in the price rise of direct thermal paper, which will be up by 40% by the end of the year.
As prices rise, companies usually get a one to two-month notice beforehand and typically prices rise by 8 – 10%. We are coming up on the fourth price increase. By the end of the year, we expect direct thermal paper costs to have risen by a total of 45%.
Raw Material Manufacturer Price Increases:
Green Bay Packaging Inc: 7%
UPM Raflatac: 6 – 8%
Acucote Inc: 5 – 7%
Spinnaker Coating LLC: 5.5 – 6.5%
Avery Dennison: 5%
Technicote: 5 – 7%
Solenis: 5 – 10%
Henkel: 8 – 10%
Capacity (in tons)
Newton Falls (2010)
Combined Locks (2017)
West Linn (2017)
Leuco Dye Crisis
Back in September 2017, the Chinese government decided to crack down on the enforcement of environmental regulations. Although this is a great thing, it did cause over 80,000 factories to be fined, legally charged, or shut down.
One of the companies, Connect Chemical, was shut down during the process. Connect Chemical was the world’s largest producer of leuco dye and used to be responsible for about 50% of the production.
As if that wasn’t bad enough, additional factories that created leuco dye were also closed – resulting in a disruption of over 80% of the world’s supply of leuco dye.
Leuco dye is a key component in direct thermal paper, and as a result, the price of leuco increased to over five times its average price. What used to be $5 – $10 a kilogram is now $80 a kilogram.
This resulted in a price increase throughout the entire supply chain. While leuco dye was the first, there have been other chemicals used in the production of direct thermal paper that have also been affected.
What is Being Done?
Smith Corona is working tirelessly to try and keep our prices from increasing. We are looking carefully at how much raw material we use, and we are trying to minimize manufacturing costs while maximizing efficiency.
Smith Corona has spent considerable time and effort to reduce scrap and waste in our manufacturing plant, and to eliminate off quality goods, all aimed at making us the most efficient lowest cost provider of labels in the USA.
We rigorously test our products for quality control and run tests every 60,000 feet of production.
As for raw materials, we leverage our size and specifically designed manufacturing assets to ensure very competitive pricing for liner and face, going to the ends of the world to find the right grades to produce our products.
We get 12-14 truckloads a month of direct thermal paper and buy about 18 thousands of tons of paper a year.
Smith Corona has multiple suppliers, which is why we can keep our prices lower than our competitors. We aren’t going to run out of paper, but the market is still tight.
Smith Corona is doing everything to keep prices down, but it isn’t expected to see price decreases in the industry as a whole for another few years, and ongoing upward pressure is likely to be the norm for the next 2-3 years.
Millennial’s Eating Habits are Revolutionizing Food Logistics
Millennials are changing their eating habits, and the market is rapidly evolving to keep up with all 75 million of them. Whether it be what foods they prefer or how they shop for those foods, the marketplace is drastically changing to meet new demands.
According to a report by the U.S. Department of Agriculture, millennial households are buying more unprocessed foods like fruits and vegetables rather than buying processed foods like pasta and potato chips. Basically, millennials want their food quick, easy, fresh, organic, and non-processed.
Due to millennials desire for fresh, organic food, the preservative rich and canned food demand is decreasing – and grocery stores are suffering and radically changing because of it. Grocery stores are beginning to sell more products on the outer ring of the store while processed, center store products are not keeping pace.
Millennials also want convenience. In fact, 55% of millennials say that convenience is one of the most important factors when they are deciding what foods to buy. To accommodate this demand, grocery delivery is growing in popularity, which in return reduces the amount of impulse buying that happens in grocery stores.
This preference for convenience and quality has also opened up the market to meal kit delivery companies like Blue Apron, and to grocery delivery services like Amazon Fresh and Instacart. Overall, millennials spend more money than any other generation on ready-to-eat foods.
The cold (supply) chain, which makes all of the above possible, has also had to change to keep up with this millennial driven demand. Food Logistics has morphed to prepare delivery trucks for the “last mile”, third party logistics have changed their warehouses and equipment to accommodate an increase in fresh and frozen goods, and manufacturers must comply with new government agencies and regulation to ensure product traceability.
Everything from the food millennials eat to the way that food moves from location to location is rapidly changing.
Grocery Store Changes
Grocery stores are no strangers to change. From the 1900’s to the 1950’s, big brands dominated the shelves with affordable foods that were full of preservatives and artificial coloring.
In the 1950’s freezers began to rise in popularity. This lead to high demand for frozen foods.
Now the new trend is healthy food. Millennials don’t want to eat too much fat, cholesterol, sugar, or carbs. Instead, millennials target the organic, fresh, and frozen foods that are found on the outer ring of the grocery store.
Millennials like to stay in the outer ring of the store and typically avoid the center of the store where processed and more profitable foods are located. This is bad news for an industry that is already plagued by low margins.
While the preference for these outer ring products has begun to define millennial tastes, grocery stores long ago designed their stores to maximize impulse buying.
Did you ever notice how the products in a grocery store that you buy the most frequently are in the back of the store? This is done for a specific reason.
Dairy products like milk don’t last long, so the typical shopper buys fresh products like those every time they shop. By putting these products in the back of the store, customers must walk past all other items – a perfect opportunity to entice an impulse buy.
A lot of thought and science goes into the design of the grocery store. For example, the end of the aisles sells considerably better than the middle of aisles. To take advantage of that fact, many grocery stores use features like wing shelves for a better chance to catch a customer’s attention.
This high unplanned purchasing behavior could be for a variety of reasons. While walking around the store, customers will see so many different products and will have a want for products that they don’t necessarily need. This desire for the product wouldn’t have happened if they didn’t walk past it because they did not intend to buy it when they entered the store.
Not only that, but the Journal of Marketing Research also found that the average shopper backtracks three times in a store they are familiar with and six times in a store that they are unfamiliar with. This provides several opportunities for merchandisers to catch the shoppers attention to buy a product they didn’t plan on.
Grocery stores rely on the impulsive behaviors of their shoppers and their store layouts prove it.
But here’s the problem, not only are millennials actively avoiding the center store, but they are avoiding the grocery store altogether.
As if getting an entire generation to embrace going to the grocery store more often wasn’t a big enough problem, grocery stores have a second hurdle to clear to win millennials business: the cold chain.
To keep up with the rising demands of America’s largest demographic, grocery stores have poured billions of dollars into ensuring the fresh and frozen goods that millennials desire, make it to their shelves unspoiled. Exactly what investments have been made in this space is detailed later on in the article.
Meal Delivery and Online Shopping
Millennials want their food healthy, fast, and easy to make. Trends are changing so quickly that dozens of companies and services are starting up every day to meet the new market demand.
The trend started with millennials in urban areas who don’t have access to cars and don’t want to waste time commuting to the grocery store. To these individuals, it was a lot easier to have groceries or meals delivered to them. Today, this trend has spread far outside urban cities.
These demands have led to the explosion of two new markets: grocery and meal kit delivery. However, the growth of these new markets comes many logistical challenges.
Online Grocery Shopping & Delivery
According to Statistica, U.S. online grocery sales are expected to grow to nearly $30 billion by 2021. Two of the leaders in this space are Instacart and Amazon Fresh.
A leader in the emerging market for grocery delivery, Instacart, is currently valued at above $4 billion. In fact, Forbes rated Instacart the #1 Most Promising Company in America and the company is continuing to expand their grocery delivery service. Instacart’s value to millennials is simple. They take on the burden of going to the grocery store, walking up and down the aisles, waiting at checkout, and bringing the goods to your house. In short, they give millennials something they value more than money, their free time.
While this might sound like a win for grocery stores, it comes at a great cost. No more impulse buys.
Ordering online significantly decreases the amount of impulse buying and there are now fewer ways to catch a shoppers attention for products they may be interested in. Grocery stores must find a new way to adapt because the desire for convenience isn’t going away.
Back in June 2017, Amazon purchased an organic grocery chain, Whole Foods, for $13.7 billion. This purchase kickstarted Amazon’s involvement in the food industry as they aimed to delivery foods to customers. In February 2018, Amazon and Whole Foods began to deliver groceries directly from Whole Foods in certain cities, and they are looking to expand throughout the year.
Customers will be able to shop online for their groceries, including fresh produce, and have it arrive to them in two hours or less.
Amazon also began implementing their loyalty program, Amazon Prime, in their new grocery delivery strategy. Prime members who shop at Whole Foods will get 5% cash back with the Amazon Prime Rewards Visa Card.
Services like Blue Apron provide the perfect solution for millennials looking for convenient and organic foods.
Blue Apron will ship you all the ingredients you need to cook a great meal. The options are healthy and fast to make. The meals usually take thirty minutes or less to prepare.
Some home-delivery meal kit options focus on special diets. Purple Carrot focuses on making their meals 100% plant-based. Green Blender focuses on healthy smoothies, and Sun Basket is all organic. These are only some of the many options available.
Meal kit companies don’t look like they will be going away any time soon. They are currently a $2.2 billion business and are expected to grow 25-30% annually in the next five years.
The Cold Chain
One challenge that grocery stores, meal delivery kits, and grocery delivery services ALL have to embrace is the cold chain. Without the expertise, execution, and growth of cold food logistics, none of the above would be possible.
The cold chain is simply a term for the management and transportation of temperature-sensitive products in the supply chain. This can include food like dairy and meat or pharmaceutical products that need to be kept cold. Basically, anything that can be ruined as a result of temperature changes can be part of the cold chain. Since dry and processed products like granola bars, crackers, and most canned foods don’t need to be kept cold to stay edible, they aren’t considered part of the cold chain.
It’s a lot simpler to transport dry and processed goods, but with the rise in demand for fresh products, changes must be made.
Transportation companies must adapt so they can safely and quickly delivery food without it going bad. These changes to the structure for temperature control can be expensive, and it doesn’t help that transportation costs have increased by 8-15% in the US.
Refrigerated delivery units are also on the rise. In fact, the global market for commercial vehicles is projected to reach 29.1 million units by 2020.
It might seem like the delivery of fresh produce is as simple as putting a freezer unit inside of a truck, but that isn’t the case.
There are several different temperatures that food can be stored at, and products can go bad if not stored at the correct temperature.
Air circulation also must be accounted for. The units must have grating on the floor with a clearance of 15 cm between the cargo and the ceiling. This is essential because internal temperatures must be reduced.
Trucks are also being painted light colors to increase the amount of light being reflected, therefore decreasing the heat.
7 Actionable Ways E-Commerce Store Owners Can Reduce Costs
A successful e-commerce store can turn a simple idea into a 7 figure success story almost overnight. But for every Cinderella story, there are thousands of merchants just looking make an honest living.
Selling online has turned almost every industry into a global marketplace. While potential profits are bigger than ever before, competition is higher than it has ever been.
While top-line numbers can look great, at the end of the day, it’s all about how much profit your store is bringing in.
To help increase that bottom line number, we compiled a list of ways that store owners can cut costs, today. Listed below are seven actionable ways that e-commerce store owners can reduce their operating expenses and increase their bottom line.
Payment processing fees are the fees that are paid to the processors for all credit and debit transactions. Basically, for every single order that a customer places on your website, someone else is getting a cut of the sale. If your online store gets a lot of sales, that small percentage can really add up! To make matters worse, credit card processors have all sorts of different fees that you could be hit with. Here are the most popular:
The Interchange: The issuing bank gets paid a certain percentage from each sale.
Mark-Up Fee: The merchant bank takes a cut by charging you a fee that varies by industry, amount of sale, monthly processing volume, etc.
Assessment Fee: The credit card company ( Visa, MasterCard, etc.) also charges a fee.
Transaction Processing Fee: A fee is charged by the payment processor, who could also be your merchant bank, each time you process a new transaction.
Many e-commerce companies don’t even consider renegotiating their payment processing costs because they don’t believe it’s possible. Most think that payment costs are set in stone, when in fact they are not. However, even just a small reduction in your fee percentage can lead to a significant amount of savings over the course of a year.
Renegotiating payment processing fees is one of our favorite ways for merchants to reduce their operating costs. If done successfully, it’s is a perfect way to save money. There isn’t any risk that is associated with changing vendors. The savings start as soon as you get your next order and last into perpetuity.
If you can’t re-negotiate a rate with your current processor, it might be time to consider a new processor all together. We compiled a little information on some others for you to consider below.
The Best Credit Card Processors For Your E-Commerce Store
There are hundreds of credit card processors on the market. Trying to choose the best one for your business isn’t easy.
To make this decision a little more manageable, the Business News Daily choose the best six processors for six different categories. If you want to dive deeper into their research, you can read it here.
Here are the six that Business News Daily choose:
How Much You Could Save
Say your e-commerce store sells one million in a year. Each transaction is for 100 dollars. Say your store had a total of 10,000 transactions. If your company negotiates your rates from 3.5 percent to 2.7 percent, this negotiation would save your company around $8,000.
Minimizing Product Packaging
Some companies do not realize that carriers not only charge for the weight of the package but also the dimensional weight. The dimensional weight is the length, width, and height in relation to its weight.
There are multiple ways a company can minimize their packaging to reduce their dimensional weight:
Use the smallest package possible. Carriers charge for dimensional weight; this includes the width, length, height.
Use lightweight materials for the packaging to cut down on the extra package weight fees.
Use different shapes to reduce the dimensional weight for packaging.
Remove excess materials that fill space in the packaging. Any extra material in the package will increase the weight.
For many e-commerce store owners, shipping labels are a complete after-thought. However, if you are shipping in high volume, all of that sticky paper can really add up! In fact, we wrote a little article detailing just how much companies can save buying their labels from a manufacturer, like us.
Buying labels from a manufacturer is a lot cheaper than buying them at retail rates from a middle-man.
If you are currently printing your labels with an inkjet printer, or even worse, are just taping a piece of paper to your box, we highly recommend you consider purchasing a thermal label printer.
Thermal printing is by far the most affordable, quick, and efficient way to print labels in bulk.
Whenever possible, e-commerce store owners should source their product packaging materials from low-cost vendors. Buying from middlemen, such as Uline, might be convenient, but it is not cost-effective. Your best bet to save money is to source these materials with plenty of lead time, straight from the manufacturer.
Negotiate a bulk discount with your provider
Prioritize packaging products that you use the most
Reuse and recycle all the materials that you can
Use inexpensive packaging for products that do not need to be shipped in a box
Find a box that can be resized multiple ways
Consumers today are all about environmentally aware companies, and if you make an effort to go green, customers will notice. Not only is it a great way to help the environment, but it is also a great way to gain new customers by advertising your environmentally friendly packaging. In fact, a survey conducted by the Recycled Paperboard Alliance found that 60% of customers are more likely to buy products from a company that uses recycled packaging.
Green packaging is using materials or manufacturing methods to have less of an impact on energy consumption and the environment. You can reduce the amount of packaging used, the number of harmful materials used, packaging costs, and can increase the use of reusable materials.
Paper and cardboard are easily recyclable, biodegradable, and are very common. Cornstarch packaging has little impact on the environment and is perfect for anything with limited use. Bubble-wrap is also another cheap and eco-friendly option.
Customers love free shipping; thanks to Amazon. When online shoppers see a high shipping cost, it tends to turn a guaranteed sale into an abandoned basket.
A survey conducted by AlixPartners showed that 36% of people were put off buying something because of the delivery costs. This was the second most important reason that online shoppers chose not to check out, the first being that they needed to see or try the item before purchasing it.
Unfortunately, the answer isn’t just as simple as offering free shipping on every order.
Shipping costs, especially “free shipping”decreases profit margins for companies. Instead of just offering free shipping on every order, e-commerce companies should look into optimizing their shipping methods. Finding the right balance between preserving profits and avoiding abandoned shopping carts is essential.
If your business can’t offer free shipping on everything, try to offer it for specific products or at certain times. Here are a few options to explore:
Domestic vs. International – Free shipping for domestic orders and paid shipping for international orders
Threshold – Free shipping for orders over a certain price
Items – Free shipping for a minimum amount of items bought
Seasonal – Free shipping for holidays like Christmas or Black Friday
Membership Programs – Amazon uses a loyalty program technique to offer free shipping. Members can pay for Amazon Prime, and in return, Amazon offers them free shipping.
Free shipping is a huge deciding factor when consumers are shopping online, so it is more beneficial to offer free shipping, even if you have to raise the prices of your products to accommodate for it.
Negotiate Rates with your Carriers
E-commerce companies should look to negotiate with their carriers because even they hate to lose customers. Most carriers are willing to negotiate as long as you make a case that is compelling enough.
Shopping around for different rates will help to make sure you are getting the best price possible. When you figure out who is giving you the best rates for the services that you need, this is when you ask another carrier if they can give you a better price.
Batch processing is a great way to make your shipping operations more efficient. Instead of printing out orders and labels individually, a company should process all of the orders in a batch to save money and time. This is also essential if your company drops off your packages to the post office, UPS, or FedEx. Going multiple times a day instead of once a day is a real efficiency killer.
Many e-commerce operations make use of software, like ShipWorks, which helps to automate the batch processing of orders.
Use Google Analytics to Identify What Marketing Channels are Bringing in Revenue
A properly installed Google Analytics tracking script gives e-commerce store owners all of the proper information to make intelligent and data-driven decisions. If your organization is engaging in any paid advertising, such as Google Adwords, Email Marketing, or Search Engine Optimization, it is very easy to determine the effectiveness of your campaigns.
Once you know which marketing channels are profitable and which aren’t, it’s easy to decide to cull the bad campaigns or make some drastic changes to improve performance.
One channel that we were able to reduce bad spend significantly was our Google Adwords Advertising. We detailed a couple of strategies that we used to do that below.
PPC- Optimize Google Adwords Campaigns
Negative Keywords – Proper use of negative keywords is the easiest way to trim bad spending from your ad budget. This can be especially true if your organization is utilizing any broad match keyword-targeted campaigns. For a great breakdown on negative keywords, check out PPC Hero’s guide here.
An e-commerce company should make better use of negative keywords match types.
Using bid modifiers for device types and days of the week or hours of the day
Focus on ad budgeting on top performance ad campaigns and ad groups
Bid Modifiers – Another way to reduce your ad spending is knowing the proper utilization of bid modifiers. Bid modifiers give the advertiser (you) the ability to reduce (or increase) how much you are willing to spend based upon specific criteria. These criteria could include hours of the day, days of the week, location, and device type.
For example, if your company sells business to business, you most likely don’t want to be spending as much on a particular keyword on a Saturday evening as you would want to pay for that same keyword on a Tuesday afternoon. Through bid modifiers, you can specify a specific percentage of your normal bid that you would want to spend when an auction meets those specific criteria.