In the e-commerce industry, labels are viewed as a necessary cost of doing business. For the most part, this is accurate – you can’t ship without a label. However, when material prices increase it can have a significant impact on your company’s bottom line. That’s why it’s essential to take steps to protect yourself and your business from the rising cost of labels.
The cost of labels is closely tied to the cost of paper. This year, paper prices are not expected to decrease – they will probably increase. This will certainly drive up the cost of labels, but that’s not the only factor to consider. The cost of labels is also impacted by other label components, transportation and inflationary factors.
Nevertheless, there are ways to help protect your company from feeling these increases.
Three Ways to Make the Most of Your Label Purchases
- Bulk Purchasing of Shipping Labels
When ordering labels, it’s important to buy in bulk. However, you should never order significantly more than you plan to use over the course of the next few quarters in your distribution center.
Stockpiling labels may sound like the perfect way to avoid the financial strain of another price increase – and to some extent, it is. When you order in bulk, you can gain a meaningful price advantage when compared to making several smaller orders. This is certainly a perk all companies should consider.
On the other hand, you never want to order more labels than your distribution center can reasonably use in the next 6 to 9 month window. What many people fail to realize is that labels can and will go bad over time. When stored improperly, this window of opportunity for use is reduced even further. This can lead to profit and savings being thrown away with yellowed and ruined shipping labels.
- Strategic Warehousing of Ecommerce Supplies
If you choose to order labels in bulk, you’ll need to strategically utilize warehouses to maximize your shipping efficiencies. You might not consider warehousing when thinking about label prices, but it can have a substantial impact.
When you place larger label orders, you can use your warehousing expertise to split pallets and strategically place product close to your distribution or fulfillment facilities – or you can choose to simply cover a specific region. The labels can then be shipped quickly and efficiently when the need arises.
This approach ensures you will have labels you need when you need them, and that you’ll save money on overall shipping costs. This savings alone can help offset any paper increases.
- Quality Control for Ecommerce Supplies
Strong quality control is critical to protecting yourself from the rising cost of labels. Every label issue that you keep off your floor and out of circulation is money saved. In an industry with tight margins, quality control can be critical to cost-savings.
This suggestion goes hand-in-hand with bulk purchasing. If you order excess labels, and then need to scrap them due to storage issues, you’ve actually cost yourself money. To maximize quality control, look at implementing a Six Sigma program in your distribution center, or ask a trusted supplier to work with you to set one up.
A Final Word on the Rising Cost of Labels
It can be difficult to predict when and by how much your label costs might increase. However, by using your buying power, warehousing resources and quality control initiatives, you can avoid significant pricing peaks.
Labels make up a large part of any ecommerce company’s balance sheet. These materials are certainly essential, but with a little foresight and the right supplier you can protect yourself and your customers from price volatility in ecommerce supplies.
Contact the experts at GO2 Partners if you have questions or would like to review how you can save money and increase efficiency with ecommerce supplies.