Smart Packaging: Why is It Important for E-commerce?

In the past shipping used to be based only on the weight of the merchandise it takes into the truck, aircraft, or ship. However, charging light-weight merchandise based on weight became unprofitable and environmentally demanding quickly, as the merchandise took too much space in proportion to its actual weight.

Dimensional shipping is the right tactic to help you increase the accuracy of your shipping rates, and reduce shipping costs. One major key factor influencing dimensional shipping is the product dimensions. The product dimensions are as follows- weight, length, width, and volume. Dimensional shipping can also be called dimensional packaging. All the terms are used in combinations but mean the same thing usually. If you are not new to shipping, the chances are you already heard about this shipping feature for your e-commerce. There are specific algorithms and software that can automate dimensional shipping. Meet Smart Packaging which is one of them.

What is Smart Packaging?

Smart Packaging, also known as dimensional packaging, is the algorithm based on product and package dimensions that “pre-packs” an order into given packages in an optimal way in real-time. Afterward, the carrier shipping rates (from UPS, FedEx, USPS, DHL, and others) are requested together with the dimensions of selected packages. This helps to increase the accuracy of shipping rates displayed at the checkout significantly and therefore to make shipping cost-effective.

Why Use Smart Packaging and How It Improves Business?

The better question is why aren’t you using smart packaging already? There are many reasons why companies switch to using Smart Packaging. Let’s have a look at some of the reasons here:

Accurate Shipping Rates

Smart Packaging helps you to obtain more accurate shipping rates from your carriers. The accuracy of the shipping rates based only on the weight parameter is very low. Merchandise based only on weight is like paying for air in the box to be shipped. Shipping rate accuracy increases with the calculated dimensional (also known as volumetric) weight compared to regular weight. However, the highest accuracy of shipping rates is only achieved if you provide the carrier with the actual package dimensions and its weight that the order will be shipped with. With Smart Packaging, you can obtain the highest accuracy of your shipping rates.

Waste Reduction 

Now that you stopped shipping empty air and started using algorithms that optimize your packaging, you saved space and reduced the waste coming from all the filling materials used in the packages as well as from transportation of ineffectively packed orders. Smart Packaging makes shipping eco-friendly and reduces the harmful impact it has on the environment. This is also a very good branding line to use for your e-commerce.

Cost Reduction 

Smart Packaging reduces your shipping costs significantly. How is that? If you ship a small item in a bigger box than necessary, you pay more than you should have, because the parameters of the box are big and the package takes too much space in the carrier’s truck. Carriers charge more for larger boxes, so using Smart Packaging helps. 

Customer Satisfaction

Smart Packaging diminishes the shipping costs on the side of both the retailer and customer. Costs inquired using custom Smart Packaging are much lower than those of standard shipping based on weight parameter only. Thus the gap between what both parties need to pay for shipping and delivery is smaller. Displaying the amount of money a customer saved on shipping at the checkout, definitely increases customer satisfaction which ultimately leads to a loyal customer base.

Branding

Also, your customers will be happy to see the orders that are effectively packed instead of air traveling in your boxes. Therefore by choosing smart packaging you also ensure that you are showing your customers that you care about the environment through packaging. The right branding gives your e-commerce a competitive advantage and sets you apart from all your competitors.

How Does Smart Packaging Work?

The process of Smart Packaging is really simple and mostly depends on the merchandise that is being shipped. See the steps below to see how Smart Packaging works.

1. Set the dimensions of your product (its length, height, and width) in your e-commerce platform. 
2. Add all the packages you ship with, their dimensions, tare weight, and weight capacity;
3. The algorithm will choose the best packaging configuration for each order in real-time;
4. Get the most accurate real-time shipping rates from carriers for all your smart packed shipments. All the information is sent to the carriers automatically.

You can also read about the mistakes in packaging and learn how to avoid them.

Turn on Smart Packaging for Your E-commerce

There are many shipping extensions available to help your e-commerce with real-time rates and dimensional shipping. However, not many of them offer reliable Smart Packaging algorithms. Calcurates multi-carrier and multi-platform shipping solution helps you to set up shipping methods, rate calculations based on conditions, and delivery dates displayed at the checkout. In order to solve dimensional shipping tasks, the Calculates team has recently added a Smart Packaging feature that is already available for e-commerce.

Conclusion

Now that you understand what Smart Packaging is, why it is important, and how it works, you can take the next step and apply it to your e-commerce as well. Even if it might sound overwhelming at first, dimensional shipping automotive algorithms are in demand more and more, as it rapidly decreases shipping costs and reduces packaging waste. Sometimes you might need to partner with professional shipping software to achieve your company’s specific goals, whether it is waste reduction or cost-effective and sales-stimulating shipping.

Arka helps brands increase sales with our eco-friendly and sustainable packaging. You can get top-quality custom shipper boxes and custom mailer boxes that ensure a memorable unboxing experience for customers.

About the author

Nikolay Pasholok, product owner and founder of Calcurates by Amasty shipping SaaS for e-commerce.