Balancing the Numbers - Contract Packaging V. In-house Packaging
Balancing the Numbers - Contract Packaging Versus In-House Packaging
A subject that seems to reappear repeatedly for Liquid Packaging Solutions representatives is the wisdom of using a contract packager versus packaging your own product in-house. As packaging machine manufacturers, we would love to tell our customers - and potential customers - that it is always better to purchase your own packaging equipment and do your packaging in-house. While there may be some truth to this in the long term, the honest answer is that the best process will be chosen on a case-by-case basis, and on occasion, a company is simply not ready to run their own packaging production line.
Of course, packaging machinery, from rinsers to filling machines, capping equipment to labelers, come in many different levels of automation, so that packaging machinery exists for just about any level of production. However, there are more factors than simple production levels to take into account when choosing packaging machinery or contract packagers.
First and foremost, using a contract packager will save the a business owner much time and stress. Shipping a product to another company to handle the packaging removes several considerations. Fewer employees are necessary, operating expenses are lessened, lower numbers of employees means lower wages. All in all, contract packaging can, in the right situation, lower overhead and increase cash flow.
Of course, over the long run, running your own packaging line can also save money and increase cash flow. Once machinery has been paid off, payments are reduced to include employees, maintenance, possible upgrades, parts and other occasional payments. These need to be weighed against the consistent payments of extra shipping costs and the repeated payment to the contract packager.
In the end, the decision on whether to purchase conveyors, liquid fillers, capping machines and other packaging machinery, or to let a contract packager handle the work for you, comes down to a simple math equation. Keep in mind that financing and tax breaks are available for those that purchase new packaging machinery, and do your homework up front! Learn all of the costs of using a contract packager and all of the costs associated with the purchase of new packaging equipment.
If you would like to learn more about the different packaging machinery manufactured by Liquid Packaging Solutions, Inc., call our representatives toll free today at 1-888-393-3693.