What is Contract Packaging?

Simply stated, contract packagers package other companies’ products on their behalf. Specifically, contract packagers provide a resource of equipment, facilities and labor that enables the manufacturer or marketer of a product to outsource specialized packaging projects or an entire packaging process.

About Contract Packaging Services

Contract packaging services package and/or label products that are manufactured by other companies. They work on a contractual basis and often perform specialized applications. Some contract packaging services perform only basic assembly tasks. Others prepare and send products to customers, performing a range of activities such as taking orders, packaging items, shipping items, and reporting shipments. Package design services provide design support for packaging development throughout the entire design cycle, from project planning to presentation to final testing. Package testing services use equipment or other resources to subject assembled packaging to standard or custom testing. Contract packaging services are located acrossChinaand throughout the world. 

There are many ways to package and label products. Some contract packaging services place materials in bags, bottles, boxes, cans, cartons, or pouches. Others put products in blister or clamshell packages, or on a tape that is rolled into a reel. Shrink banding fits packages with plastic wrapping bands that are heated until they shrink to fit tightly. Shrink or skin wrapping encloses packages in protective plastic wrapping that is heated and shrunk. Stretch or over wrapping is used to package groups of products such as cans. Machinery is often used to form, fill, and seal products. Custom hand-assembly is performed when automated methods are not possible or cost-effective. Labeling techniques include bar coding and radio frequency identification (RFID) tagging. Repackaging methods include wrapping or inserting cello packaging.

Contract packaging services can provide specialty packaging and labeling for bulk and original equipment manufacturer (OEM) supply shipments, industrial equipment and machinery, and freightliner cargo holds. Some companies specialize in packaging warehouse club products, promotional or display assemblies, gift sets, kits, or sampler sets. Others are experienced with packaging materials that consist of granular or fine powder particles, or that consist of thick, flowing substances such as paste. Specialty packaging is often necessary for liquid goods that have a specific volume and are only slightly compressible.

Contract packaging services meet the needs of a wide variety of products, applications, and industries. Examples include military and aerospace equipment, medical and surgical devices, automotive parts, chemical and petrochemical products, electronic components and semiconductors, garments and clothing, stationery and paper goods, cigarettes and tobacco, health and beauty aids, and non-food household items such as soaps and cleansers. A variety of general industrial packaging types are available. Packaging for music, video, software and other consumer goods is often designed to maximize aesthetic appeal and minimize shelf space.

What To Know When Choosing A Contract Packaging Provider

When considering contract packaging solutions for your production needs, make sure your need is clearly stated and agreed upon inside your company. Be sure you can inform your prospective contract packaging partner with your needs and with your goals. If you foresee or have already encountered any problems in the process, be sure you talk about these with your contract packager before you commission the process.

You should consider “outsourcing” your packaging operations when. . .

1. Your product volume under or over employs your own manufacturing lines, either short or long term.

2. There's a specific, short-term requirement that may be better served by specific experience or packaging equipment you don't have.

3. There's a short run for a new product market test, gift pack or seasonal appeal which may require your company to invest in new packaging equipment.

4. Promoting your product with increasingly popular marketing weapons of non-standard packaging or promotional inserts requiring special machinery or labor intensive work.

5. The pressure of new business or deadlines creates a heavy, short-term workload for which you require experienced help to supplement the efforts of in-house staff.

6. A product may more economically be shipped in bulk to a distant market, then unit packed locally.

7. New packaging forms unfamiliar to your staff and equipment may be specified.

8. There is no available in-house packaging equipment or expertise for a particular job.

9. The plant is closing for maintenance or faced with a labor availability problem.

10. A new package form is to be market tested before general introduction.

11. There's a corporate down-sizing.

12. The company is faced with a high investment to meet regulatory and environmental compliances.

When considering a contract packaging service, you should use a wide range of selection criteria. And, depending on the personality of you and your company and the nature of the specific project, place more or less emphasis on each of those criteria.

Here are several considerations:

1. Location. Convenient location relative to your manufacturing and distribution facilities can save delivery time and lower freight charges, possibly impacting the total cost of your project. But keep in mind that the savings achieved by using most firms prepared to assist you can easily outweigh most freight considerations.

2. Experience. Make sure the contract packagers you consider are equipped to deliver the specific services your needs demand. Look for companies that have serviced other clients with similar product lines and needs

3. Strong ethics. There simply is no substitute. Click on “Standards. . .” for our guidelines.

4. Cost. All quotes you solicit should be thoroughly studied, analyzed, and considered in relation to the service that you expect to receive.

5. Good Communication. Brilliant thoughts and innovative solutions will do you no good if you don’t install adequate communication channels with your new partner.

6. Controls. Be sure that you see eye-to-eye on detailed paperwork or control requirements. Help your new partner put the proper procedures in place and have the analytical skills needed to help you develop a full and accurate picture of problems, solutions, and the various repercussions of those solutions.

7. Personality. A good match of personalities between key staff of both companies helps ensure a successful relationship.

8. Size. Is the company large enough or small enough to handle your project? Does the company have enough experienced personnel? A staff capable of solving problems and implementing solutions is very important.

9. Successful contract packaging relies on good management and manufacturing practices.

10. Financial strength. Does the new partner really have the financial strength you need?

11. Quality. Look for signs of innovation, unique approaches, and a different perspective. Ask about the in-house details of its quality controls.

12. Strong references. Ask for a list of other clients.

13. Conflicts? Is there a proprietary line which might compete with your product line?