The consumer market is evolving and growing rapidly. The growth of the market is also leading to rising concerns of both buyers and producers. With the changing conditions and new trends within the consumer market, it is essential for the producers and packaging professionals to adapt accordingly.
Times have changed and now consumers take an interest in knowing the source of packaging of the product they are purchasing. Distribution networks are now displaying product versions in different regions with the goal to create cultural considerations for consumers around the world.
As regulations are different in various parts of the world, every business is responsible for the standard of its product and its packaging source.
Geopolitical instability, the pandemic, supply chain pressures, inflation, and surging energy costs have prompted more businesses to look much closer to home.
The trend of outsourcing packaging supplies to overseas contractors is slowly coming to an end. Many businesses these days are bringing it back home through “reshoring.” The Reshoring Initiative Data Report found that in 2020 alone, reshoring created a record 109,000 jobs and outpaced foreign direct investment for the first time since 2013. The figures surged still further last year to an estimated 220,000 jobs, with more than 1,800 companies announcing new reshoring initiatives – another record
Reshoring is a process that involves bringing back the production and manufacturing of items to a company’s country of origin. Sometimes, a company can move some of its processes overseas to reduce manufacturing costs.
This process is called “offshoring,” and reshoring is the process of bringing it back home.
Is your business trying to reach a wider audience or break into a new market? Or establish and maintain a global presence? Then, you need an experienced locally manufacturing packaging provider.
This article will cover six advantages of using locally manufactured packaging.
Local Packaging Complies With FTC Rules
The Federal Trade Commission (FTC) is a regulatory body that enforces consumer protection laws. Its primary function is to prevent deception and unfairness in the market.
It fights against unfair business practices. These business practices often result in higher prices and fewer choices for consumers.
The FTC investigates and sues companies that break the law and engage in these practices. Before claiming that your product is made in the USA, you must meet certain requirements.
First, significant parts of the production process must be of US origin. These include the processing and assembling of your products. Then, your products must not have foreign content.
So, under the law, you cannot advertise your product line as made in the US when only some of the products follow the standard. It is very important to obey consumer protection laws.
If you make false claims on your products, you may attract an FTC investigation. In the end, you will get bad publicity and attract enforcement actions.
You will also need to adjust your packaging to meet FTC regulations. This can be an extra expense you did not prepare for.
So, to avoid all the unnecessary drama it is best for your business to get a packaging company in the US that locally manufactures its packaging boxes to handle the entire process for you.
Local Manufacturing is Cheaper and Ships Reliably
As compared to some of the other developing countries, the United States has lower labor costs. Getting your product packaging from overseas is only cheaper if you are just calculating the cost per unit.
When you add the additional costs that come with shipping, inventory and the ever fluctuating exchange rate given the global economy, it becomes considerably expensive.
Many companies make the mistake of sourcing their decisions by looking at the price alone. Reliable and speedy shipping is the most crucial aspect of ensuring your products reach your customers in the shortest time and optimal condition.
Any delay or unforeseen damage to your goods means you lose your customer, and deal with negative reviews online. Worst case scenario, if your customer decides to switch to your competition, it is almost impossible to win them back because markets are getting increasingly competitive.
If you source your packaging from overseas, there are high chances that the speed of delivery will be affected. Some of the common delays come with bad weather conditions, foreign holidays, in some cases political unrest or government issues.
Furthermore, there is also the hassle associated with import fees and border checks. There are often delays at custom offices. On a good day, shipments can take about six to eight weeks to come into the country.
This can make you lose sales from valuable customers as this entire process is out of your control. Often it is hard to get hold of customer assistance due to time zone differences.
But if you use a local manufacturer in the US, your products can reach you in just a few days due to shorter distances.
The shorter lead times make it easy to respond to customer inquiries and demands. You also get to save money you would have spent on getting supplies into the country.
Lesser Risks and Higher Product Safety
Product safety is higher in certain industries as compared to others. For example for the food and beverage industry and the beauty industry, product safety comes first.
In the US the Food and Drug Administration has high-quality standards in place for things produced in the country. The chances of selling safer items are higher if you produce your packaging locally
The beauty industry has high customer scrutiny. The consumers like to know everything about their products be it skincare or makeup, down to their custom packaging. It is hard to get all the required information and documentation when products and packaging are manufactured internationally.
Contaminated plastics and other packaging items can cause serious harmful health hazards or even death. If you are in the food and beverage industry, you cannot afford to play with your customer’s well-being. Safe products give buyers peace of mind and protect you from lawsuits.
The last thing you need is a poor product resulting from contamination, which you cannot defend. You can only track the process if you source within the US.
The Environmental Protection Agency demands manufacturers follow strict environmental standards. So, you have nothing to worry about with local producers and packaging manufacturers. Local is the way to go!
Quality and Consistency Guarantee
In the US, packaging manufacturers use the best technology and skilled workers. It guarantees better quality and consistency in packaging.
America has some of the best workers globally because of its high labor standards. Also, there are effective labor laws that guarantee safe and high-quality work environments.
With packaging manufactured locally, you are guaranteed cutting-edge technology and better quality products.
On the off chance that you receive a product that is damaged or broken, the return process is easier as you don't have to deal with international shipping and it is quicker because you are using local delivery services.
One of the reasons people get low quality products is that the manufacturer was scrimping. Manufacturers sometimes like to save money by opting for products from overseas dealers.
This often results in a disaster because cheaper doesn’t always mean better. Other disadvantages of low-cost production are long delays, poor communication, and interruptions in the supply chain.
Therefore, it is better and safer to opt for locally manufactured packaging providers such as Arka. They offer premium custom packaging options for any niche: from custom cosmetic boxes to soap boxes. Contact the Arka team and design your top-notch shipping boxes today!
Risks of Offshoring
From higher costs and communication delays to security risks, offshoring can have some potential negative effects on your e-Commerce business.
- Increasing Manufacturing Costs in Developing Countries
Labor costs are going up in developing countries now. The shipping costs are also increasing given that the fuel prices have skyrocketed internationally
As more countries develop, it only makes sense for their labor costs to go up. Increasing costs of shipping is also another feature of a fast-developing world. Given all these, it makes less sense for local companies to depend on offshore production.
The price difference between getting smaller as the years go by, so producing locally makes the most sense.
- Risk of Vendor Failure
If the vendor goes out of business due to unforeseen circumstances it is a complete disaster for your business. As you not only have to find a new vendor but also make up for the lost orders and the cost associated with it.
- The US Has a Better Skilled Workforce
The United States is a technically advanced country, with the advantage of having a highly skilled workforce.
America’s workforce is populated with very educated workers compared to other countries. Since there is a large population, there are many people on the ground to do the job.
This way companies do not need to go overseas to find skilled workers who can handle an advanced manufacturing environment.
- Intellectual Property Concerns
Intellectual property concerns are an outcome of offshoring manufacturing jobs as sometimes designs get copied and Non-disclosure Agreements (NDAs), it is not always followed.
The US has better intellectual property protection laws and ensures that NDAs are followed.
Many businesses have realized that the benefits of reshoring outweigh the cost.
- Geopolitical Unrest
Geopolitical unrest due to an unstable political climate in an outsourcing country can cause huge risks for businesses.
If there is a government shutdown, military coup, riots over an election - these issues can halt the manufacturing process and cause major delays to the supply chain. This can cause huge losses to businesses.
Conclusion
As a business owner, your biggest priority is to meet your customer needs, maintain customer satisfaction and reach new buyers.
To optimize your business, we highly encourage you to consider reshoring and utilize the services of locally manufacturing packaging providers.
We have researched and compiled the advantages of using locally manufactured packaging. You should switch, if you haven’t already!
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