Everything you need to know about contract packing, why your business should use one and how to choose

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What is contract packing?

Rather than pack its products in-house, a manufacturer or retailer can outsource the job to a contract packing company (often called a contract packer).

The contract packer then packs the products for redistribution. Typically, the products go straight to market.

Contract packing, contract packaging and co-packing—what’s the difference?

There isn’t one—these are all different names for the same service.

What services does a contract packer offer?

Contract packers often provide a number of services, including the following:

Packing processes

Vertical form fill seal (VFFS)/Vertical bagging

Where the packing machine creates the bag as it packs the raw material.

Read more about vertical form fill seal

Flow wrapping

Sealing products in film as they run along a conveyor.

Read more about flow wrapping

Shrink wrapping

Using heat to seal products in tight plastic.

Read more about shrink wrapping

Sleeve wrapping

Wrapping a product (or group of products) in a thick, tight polythene sleeve.

Read more about sleeve wrapping

Overwrapping

Wrapping a finished product with an outer layer of film to provide extra protection and a luxury appearance.

Read more about overwrapping

Blister packaging

Packing products in a pre-formed plastic casing which is backed by plastic or cardboard.

Read more about blister packaging

Pouch and sachet packing

Packing the product in pouches or sachets.

Read more about pouches

Read more about sachet filling

Gas flushing

Injecting inert gas into the packaging to flush out oxygen and prolong shelf life.

Read more about gas flushing

Filling

Filling pre-made packaging with the product.

Read more about filling services

Contract bottling

Filling bottles with a liquid product and packing those bottles in bulk.

Read more about contract bottling

Labelling and coding

Adding labels and/or codes to packaging and containers using a range of methods.

Read more about labelling and coding services

Hand assembly

Assembling by hand products which are unusually shaped or too delicate or intricate for machinery.

Read more about hand assembly

Reworking

Work to repair, repackage, relabel or retag when there are problems with the original packaging.

Read more about reworking services

Other services

Order fulfilment

Holding stock in a secure storage facility and delivering products whenever a customer submits an order.

Read more about order fulfilment services

Delivery and distribution

Delivering packaged products, using their own fleet of vehicles, or haulers or delivery services they work with.

Read more about delivery services

Why should we use a contract packer?

Perhaps your business manufactures and ships items in bulk to keep costs down. You package the products for transportation only—meaning they aren’t yet ready for retail.

Rather than invest in machinery, staff and training to pack the products yourself, you can outsource this work to a contract packer.

Do use a contract packer if you:

  • lack the right equipment or expertise in-house
  • are working to full capacity but unable to meet demand
  • are soft-launching a product and don’t want to commit the finances needed to pack in-house
  • have a product which is available only temporarily, such as a promotion or a trial
  • have run into operations problems—for example, you’ve laid off staff or your current packing lines need maintenance
  • don’t have storage space, as normally you import products and send them straight to store
  • simply want to control your costs

Don’t use a contract packer if you:

  • lack the capacity or finances to put the contract packager’s suggestions or recommendations into practice
  • are working with small product runs
  • have the proper equipment in-house

How do we hire one?

Choose the ideal contract packaging company for your business by following the process below.

1. Work out exactly what you need

Clearly identify your needs or what specific problem you want the contract packaging company to solve.

Consider your budget honestly and carefully, as it’s easy to underestimate how much packaging can cost. If the contract packer has experience and provides a high-quality service, it should be able to assess how to adjust your project to keep it within your budget.

2. Find potential candidates

Compile a shortlist of options and contact each company. Ask the following kinds of questions:

  • Have you worked with products similar to ours?
  • What challenges have you faced, and how did you overcome them?
  • What general contract packing experience do you have?
  • Can you provide references?
  • How do you determine the cost of a project?
  • What quality control and production control processes do you use? Do you have any industry accreditations?

What size company you should use

Bigger isn’t always better, but at the same time the contract packer must have the capacity to deal with your product lines.

Smaller contract packers are often better at developing custom solutions with you and can pay you more attention. They may be more invested in your product.

However, if you have a very large production line, make sure the contract packer can prove it has the capacity to cope with it.

Where the company is located

Take account of where the contract packer is based, as you can save on the cost of transporting goods from your manufacturing base to the packing site.

However, often the money you’ll save on outsourcing your packing can outweigh the cost of getting the product to site.

Read more about what questions to ask co-packers

3. Meet in person

The packaging process is often complex and varies from job to job, so organise a face-to-face meeting with the company to discuss your project.

Be open to suggestions. Contract packagers are used to coming up with innovative solutions to problems.

4. Ask for proposals

Request a project proposal from each candidate on your shortlist. Make sure they explain:

  • the scope of work—a general description of what they will do for you
  • what services they will provide
  • what the project will cost (and provide a schedule for payment)

5. Finalise and sign a contract

Fine-tune the details of the proposal and sign a contract packing agreement with the packing company.

Read more about what should go in a contract packing agreement

6. Stay in touch

Make sure you remain in good communication with the contract packaging company. This will help them to get to know your business and operations quickly.

Does a contract packer pack any product?

It depends what specific production lines it operates. Generally, the machines a packing company uses don’t restrict it to one particular type of product (for example, just cosmetics or just food).

A contract packer will typically deal with a range of products, from toys to electronics, cosmetics to food, and even more specialist products like chemicals or ionised water.

WePack can pack both food and non-food items. Click the links below to find out more:

How does food contract packing work?

Food can be packed in lots of different types of packaging. Most food is packed using methods where the packaging is already made and then filled.

Food in sachets will be packed using a technique known as vertical form fill seal. Solid foods like chocolate bars can be pushed along a conveyor belt and packed using horizontal bagging techniques such as flow wrapping.

A customer can either supply the packaging themselves or have the contract packer source it for them.

Read more about contract packing for food

How much does contract packing cost?

Prices vary a lot from customer to customer, as every job is different. Here are some factors that affect the total cost of the job:

  • Quantity—small runs usually cost more than large ones
  • Type of packaging—some options are more expensive to make, and so have a higher price
  • Print options—printing designs onto packaging adds to the cost, although digital printing can bring the price down a little
  • Audits—customers often want to audit a contract packer’s service before hiring them, which also adds to the overall cost

Read more about cost considerations for contract packaging

Find out more

Packing projects: what do businesses need to know?

FAQs about packaging and contract packing

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