Lately it seems like "the pinch" is just getting more and more painful. It can feel like you're being asked to spend more and more for smaller and smaller returns. With so much pressure to reduce expenses, how can you trim costs on your custom product labels, without risking their quality (or your supply)?
There's nothing wrong with trying to save money, but there are wrong ways to go about it. Taking a broad-strokes approach could even lead you down a path that costs you more in the long run. As you look for ways to save money on your custom labels, you'll want to avoid these two common mistakes.
There's a reason stores like Costco and Sam's Club are popular with small businesses: More often than not, buying in bulk is one of the best ways to save money. So, if it works for ingredients and office supplies, why not apply the same principle to the way you purchase your labels?
The answer boils down to risk. If you have a label line of products that frequently changes or is subject to the whims of a volatile market, purchasing your labels in bulk may ultimately leave you with a large inventory of custom labels you won't need. Any cost savings go right out the window when you're left with packaging you can't use.
The best price is the lowest price to get a label that does what you need it to do consistently order after order after order. Fortunately, there is a way you can purchase in cost-saving quantities while minimizing your risk. A good custom label manufacturer can show you the math to identify the sweet spot for your business.
One way companies seek to save money on labels is by making quick, reactionary changes to the label itself. That might mean changing the design of the label, opting for a cheaper material, or even shrinking the size of the label in a bid to reduce the overall cost.
While there can be good reasons to change your labels, it's not a decision to make in haste. Here's a detailed look at why rushed changes can be costly:
Material Changes and Performance Impact: Switching to cheaper materials can significantly affect how well your labels perform in real-world conditions. A label that peels off prematurely or degrades quickly under normal usage conditions can damage your brand reputation and require costly replacements. Additionally, cheaper materials may not stand up to environmental factors like moisture, temperature changes, or UV exposure, leading to faded or damaged labels that reflect poorly on your products.
Brand Recognition and Customer Experience: Sudden design changes can disrupt the visual consistency that customers have come to associate with your brand. Even subtle modifications in color, finish, or overall appearance can make your products harder to recognize on store shelves or create doubt about authenticity in customers' minds. This is particularly crucial for established brands where label recognition plays a key role in purchasing decisions.
Information Integrity and Compliance: Reducing label size might seem like a simple cost-cutting measure, but it can have serious implications. Smaller labels might force you to reduce font sizes, making important information harder to read. This can be particularly problematic for products that require specific warning labels, ingredient lists, or usage instructions. In some cases, size reductions might even put you at risk of non-compliance with labeling regulations in your industry.
Working with your custom label manufacturer to optimize order quantities involves more than simply buying in larger volumes. It requires a sophisticated approach to inventory management and production planning:
Production Efficiency Analysis: Your custom label manufacturer can analyze their production capabilities alongside your needs to determine the most cost-effective run sizes. This might involve identifying opportunities to combine similar labels into single production runs.
Inventory Management Solutions: Modern inventory management programs can help you maintain optimal stock levels without tying up excessive capital in inventory. This might include implementing automated reorder points, establishing min/max inventory levels, or setting up vendor-managed inventory programs where your custom label manufacturer takes responsibility for maintaining appropriate stock levels.
Seasonal Planning Strategies: For products with seasonal variations in demand, your custom label manufacturer can help develop a production schedule that accounts for these fluctuations while maintaining cost efficiency. This might involve building inventory during slower periods to prepare for peak seasons, or scheduling production runs to align with your historical demand patterns.
Storage Cost Consideration: A comprehensive analysis of storage costs versus production savings can help determine the most economical order quantities. This includes evaluating warehouse space costs, handling expenses, and the opportunity cost of capital tied up in inventory.
Working with your custom label manufacturer to optimize materials and design can yield significant savings without compromising quality:
Material and Adhesive Selection Process: Begin with a thorough analysis of your label's requirements, including environmental exposure, application surface, and expected lifespan. Your custom label manufacturer can then recommend materials that meet these requirements while avoiding over-engineering that drives up costs unnecessarily.
Size and Layout Efficiency: Custom label manufacturers can often suggest minor adjustments to label sizes or layouts that significantly improve production efficiency. This might include adjusting dimensions to better fit standard production equipment or organizing multiple labels on a single sheet to reduce waste.
Color and Printing Specifications: A careful review of your color requirements can often reveal opportunities for cost savings. This might involve consolidating spot colors and/or optimizing the use of process colors.
The way your labels are formatted and packaged can have a significant impact on both costs and efficiency:
Roll Format Optimization: For machine-applied labels, your custom label manufacturer can optimize roll dimensions, core sizes, and wind direction to maximize efficiency on your application equipment. This includes considering factors like roll diameter limitations, label spacing, and liner requirements.
Manual Application Efficiency: If your labels are applied by hand, your custom label manufacturer can recommend formats that improve worker efficiency while reducing waste. This might include specially designed sheets, easy-peel configurations, or optimized roll sizes that reduce handling time.
Distribution Solutions: Your custom label manufacturer can develop packaging and shipping configurations that protect your labels during transit while minimizing freight costs. This might include using space-efficient packaging, consolidating shipments, or establishing regional distribution points for multi-location operations.
A successful partnership with your custom label manufacturer goes far beyond simple transaction-based relationships. Make sure your partnership entails:
Your custom label manufacturer should take time to understand your production processes, distribution channels, seasonal patterns, and growth plans. This comprehensive understanding allows them to suggest solutions that align with your business objectives and constraints.
They should also review your historical order patterns to identify opportunities for optimization. This might include consolidating orders, adjusting order timing to align with production schedules, or implementing automated reorder systems to reduce administrative costs.
Your custom label manufacturer can also work with your company to develop long-term volume projections to help optimize production planning and material purchasing. This includes considering market growth, new product launches, and potential changes in demand patterns.
When it comes to cutting costs on your custom product labels, success requires a strategic approach that considers all aspects of label production, usage, and management. Working with a knowledgeable custom label manufacturer who understands your business and can provide comprehensive solutions is key to achieving sustainable cost savings while maintaining quality.
Ready to create the perfect label for your product? Download our Custom Label Buying Guide and get tips to make smarter label decisions.