Think Out of the Box: Starting a Business in Packaging

mini parcels

Coming up with the right product to sell to the masses can be difficult, so why not cater to the people coming up with the ideas? Every good product needs packaging, and there will always be a demand for boxes.

No Lack of Clients

A box or package business caters to almost every entrepreneur, business, and corporation. Every decent product comes in its own branded box, and you can be the one making the boxes. Even small businesses will require packaging, whether it’s a small honey production venture or a sizable brewery. Proper packaging also serves as advertising, so almost every business is open to it.

Of course, you’ll have an easier time if you run your business in an urban center or big city. Smaller towns might not have enough businesses, so take a measure of what’s being sold and see if it’s worth the gamble. Packaging is no fleeting fad, so your client base will constantly grow through the years. You might need to upgrade your printers and switch to industrial die-cutters once you get three to four big clients (sometimes just one will do), so be prepared to expand your operations. Of course, you’ll need to cultivate your relationship with them by providing timely and satisfactory service. Otherwise, there shouldn’t be any complex problems.

Bulk Orders

Packaging companies usually have thin profit margins. A $1 box will earn you $0.20 to $0.30, but you won’t be selling just a few boxes. Local businesses might send an order for hundreds or thousands of boxes, but more prominent companies can require 50,000 boxes or more per month. That’s just for one product. A cosmetics company can have dozens of brands, with multiple products under each brand, and every item will need its own unique packaging.

A clothing brand will want clothing tags on all their products, and the turnover can be seasonal or monthly. You’ll be up to your neck in orders, and the sheer number of boxes you sell will more than make up for thin margins. Although your packages come out of machines flat and unfolded, you’ll eventually need a lot of space for storage. You can make do with your house for a little while, but consider renting a small warehouse or a studio for storage.

parcel ready to be shipped

Start at Home

You can start creating boxes and packaging at home. You’ll need a good printer and a small die-cut machine that can cost $2,000 to $3,000 (smaller ones can go for $200 to $300, but they are more suitable for smaller projects and plain printouts). While you won’t be making large boxes (shoebox size and bigger) with a $2,000 machine, it’ll be enough to make 3 to 4-inch boxes for smaller items. You can also use your die-cut machine to make business cards, wedding invitations, etc. Smaller containers can be used for cosmetics, honey products, baking goods, and many other options.

You can even set-up shop by solely making unmarked boxes for cakes and cupcakes. With the surge of bakers in the past year, you’ll never run out of clients if you cover that market in your community. Of course, the goal is still to go big, and you’ll need an industrial die-cut machine if you want to handle packaging for established brands. A big brand can demand thousands of boxes in a week, going up to six to seven digits if they want to cover packaging for a year (season for the bigger brands).

Machines Do All the Work

Operating a packaging business requires minimal manpower. The die-cut machine does the cutting and scoring. All that’s left is collecting the unfolded boxes, storing them, and then delivering them to the client. Die-cutters are very versatile; they can shape various materials into almost any shape, particularly boxes. Using commercial and industrial die-cutters will require a bit of learning and familiarization. A predetermined pattern is necessary before cutting, and learning to make one can take two to four hours of learning and practice.

Once a pattern is made, the die-cutter will cut and score with precision, regardless of the amount, whether hundreds or thousands. Of course, make sure to get in a few trial runs, so you won’t spoil large batches because of small errors. Die-cut machines can turn in thousands of patterned cut-outs in an hour, so most of your time will be spent sorting, counting, and packing for delivery.

A packaging business will require significant investments, both of your time and money. However, it is a business that can be sustained for decades. One significant investment can set your family, not for life but for generations to come.

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