What’s the Difference Between Contract Packaging and Packaging In-House?

What’s the Difference Between Contract Packaging and Packaging In-House?

Whether you’re a new company bringing its first product to the market or a well-established company trying to make the packaging process more efficient, the way you package your product is crucial to your company’s success. There are two main types of packaging that you can use: contract packaging and in-house packaging.

Deciding between the two depends on certain important details, including available resources and expertise, short-term and long-term budget implications, and the overall efficiency of the facility.

When You Should Outsource with Contract Packaging

Typically, a contract packager is chosen when it’s less expensive and more efficient than packaging their product in-house. Contract packagers also bring specific expertise to packaging operations, because of their focus on packaging alone. A small business that’s growing quickly can scale packaging and production to a higher level than they would otherwise be able to on their own.

Some reasons a business may consider contract packaging include:

  • A lack of in-house equipment and expertise for packaging jobs
  • Geographically separated facilities
  • Non-standard packaging that requires the use of labor intensive work or special machinery
  • Product benefits from cost-effective economical bulk packaging
  • Short-term requirement better served by specific experience or equipment not currently available
  • Warehouse full of products that require re-working
  • Corporate downsizing

When to Package In-House

Many small and large businesses also choose to package products in-house. Generally, packaging your product on the premises entails a higher upfront cost, but once the machinery is paid off, the ROI can be worth it. Remaining expenses will include maintenance and labor, with some tax benefits that further lower costs.

Another benefit of in-house packaging is the fact that companies have direct control over the packaging and production of products, without anyone else interfering with these processes.

Other reasons a business may want to consider in-house packaging include:

  • Desire to integrate supply chains under a single roof with one management group
  • Wanting to directly oversee and control production processes
  • Staff are experienced and efficient enough
  • Lower freight costs
  • Strong product line that doesn’t require specialized machinery

Determine What’s Right for Your Business

Whether you need contract packaging or in-house packaging, both have their advantages and disadvantages. In any case, you should carefully consider the appropriate solution for your business and implement it before it becomes an issue. One way you can determine which one is best suited for your applications is to consult with a dependable packaging company, who can make the best recommendation based on your company’s needs.

Both in-house and contract packaging services continue to develop and become increasingly efficient. Depending on your company’s requirements, you’ll be able to find the best solution to maximize the efficiency and cost-effectiveness of your operations.

Whether its contract packaging, part kitting, or cold seal, Fapco Inc. will work to help your business grow. Get Started with Fapco Inc. today!

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