Over 20% of all ecommerce returns are due to damaged products, and many of the reasons a product gets damaged are completely avoidable. As every ecommerce seller knows, returns can seriously hurt your profit margin, which is why ecommerce packaging is so important.
Ecommerce packaging is not just about keeping your products safe, it is an integral part of your brand identity.
I’ve tried all sorts of ecommerce packaging solutions over the years in my online business. After dealing with more than my fair share of product returns, I’ve learned what works and doesn’t.
In this article, I discuss what you need to consider when developing a packaging strategy for your ecommerce business.
What do we mean by product packaging?
Product packaging covers all the materials used to enclose and protect your product, from distribution to when the customer finally unboxes it.
- Shipping packaging used to store your products in a warehouse.
- The inside product packaging, like bags, boxes, and mailers.
- Internal packaging (infill), such as tissue paper, shredded paper, packing beans.
- Whatever you use to seal the packaging, such as stickers, tape, or ribbons.
Product packaging crosses many parts of an ecommerce business, including:
- Warehousing: You must ensure your products are protected during storage and throughout your ecommerce warehouse process.
- Distribution to the customer: You must ensure products get to the customer safely with minimal damage during the order fulfillment process.
- Marketing: Packaging is a key part of your overall ecommerce brand and sets the tone for how the customer perceives your products.
Why is ecommerce packaging important?
Product packaging is important for ecommerce brands because it’s usually the first physical interaction a customer will have with your brand, so you need to make it count.
It helps form their first impression of your business and will shape how the customer feels about your product. Packaging is a key driver behind impulse purchasing, something we ecommerce sellers want to encourage!
Ecommerce packaging has to work much harder than product packaging in brick-and-mortar stores. It needs to look good and keep your products safe from the warehouse to your customer’s door. If you’ve ever watched parcels being chucked in and out of delivery vans, you’ll know that’s not an easy feat!
Protecting the product during shipping
As we’ve discussed, your packaging is, first and foremost, about ensuring that your products are protected throughout the supply chain. Hence, they arrive with your customers in perfect condition.
Some products are easier to package than others. I used to sell a range of glass homeware products—they were packaged with tissue paper, bubble wrap, and reinforced cardboard corrugated boxes. Even then, we would get products arriving smashed.
Perishable and fragile products need special care and attention. If you’re selling cheese like the British brand Pong, you may need to add cool bags or frozen gel packs to your packaging, or your customers could end up with a very smelly box on their doorstep.
Over 10% of products arriving at distribution centers have some case damage. This can add up to a lot of money over a year, and damaged products usually can’t be returned to inventory, so you can’t claw back any of those expenses. Even worse, damaged products are likely to result in customer complaints which take time to resolve and impact customer loyalty.
Protecting your products in storage
Many ecommerce businesses will manage their inventory using an external warehouse or 3PL. Depending on your products and how quickly your stock sells, you could have products in storage for months. Your packaging needs to withstand being stacked up and moved around a lot.
Is your warehouse temperature controlled? If not, you need to think about how to protect your product in warm and cold temperatures—candles, chocolate, or makeup stored in a warm warehouse will need proper protection, for example.
Representing your brand
Just as important as protecting your product is the role your product packaging has in representing your brand. When a customer opens their package, they’re going to make immediate judgments about your brand and the product inside. This a great opportunity to communicate your brand values to a customer through the packaging design and materials you use.
Educating your customers
Packaging is also an effective way to educate your customers about using your product.
You can either add this information on the packaging directly or include inserts within the packaging. You can do this with virtually any product, but it’s particularly important for functional products. For example, if you sell moisturizer, you could give instructions about applying the cream.
You can also use your packaging or product inserts to educate customers about how you make your products, where you source your materials, and the individuals involved in creating the product—this can all help build a connection between the customer and your brand.
Letterbox snack delivery brand Graze does a great job of educating its customers about the provenance of its snacks.
Building the customer relationship
You can also use your packaging and inserts to encourage customers to provide feedback on the product. This is particularly important if you sell on Amazon, as you can’t communicate directly with your customers through the platform. Therefore, the packaging allows you to encourage customers to provide those vital product reviews.
By including your social media channels and contact details in a prominent position in the packaging, you can encourage customers to engage with you. This helps you to build customer relationships and quickly resolve issues if they arise.
Cross-selling other products
Packaging is a great way to introduce customers to complementary products in your range. For example, if you sell consumables like coffee, you could include a free sample of coffee papers within your packaging.
If you don’t sell consumables, you can still encourage customers to repeat purchases by including a voucher for other products or promotional materials within your packaging, thereby increasing your customer lifetime value.
What does good ecommerce packaging look like?
Ecommerce companies have upped their game in recent years when it comes to product packaging.
Thanks to companies like Apple, customers no longer simply expect to get their products in an unmarked cardboard box. Just look at the thousands of views on YouTube for Apple unboxing videos. People love sharing their enjoyment from opening up the stylish Apple packaging to reveal their beautiful new iPhone.
Apple has created iconic retail packaging which protects its valuable contents while also communicating the ingenuity and high-end design that customers expect from Apple.
Amazon is another company that has revolutionized packaging, specifically shipping packaging. It may not be the prettiest, but Amazon’s brown packaging with the black logo is unmistakable.
Amazon aims to offer customers "frustration-free packaging” (FFP), which protects the product inside while only taking seconds to open. This provides a far better customer experience and makes it easier for customers to return the item if needed.
Another important factor for Amazon is reducing packaging waste and using recyclable materials. Since 2015, Amazon has reduced shipping packaging by 38% to eliminate over 1.5 million tons of packaging.
Let’s look at sustainability more closely, as it’s an increasingly important area for customers and online retailers.
Sustainable ecommerce packaging
Sustainable packaging is becoming more and more important to consumers when online shopping. 42% of online shoppers would choose a brand based on its sustainable packaging.
Whether you’re an eco-friendly brand or not, your packaging sends an important message about how seriously you take your environmental footprint.
There are lots of different sustainable packaging solutions:
- Use eco-friendly packaging: This could involve using recycled paper, boxes, bags, or biodegradable or compostable packaging made from natural materials like hemp.
- Reduce unnecessary packaging: Many companies are redesigning their packaging to make it as slim as possible. This reduces the need for packaging infill and saves money on storage and delivery.
- Create packaging that can be reused: Companies can deliver an added bonus to customers while also reducing waste by creating custom packaging that can be reused—such as a sustainable tote bag or pouch.
How to choose the right packaging solutions for your business
When choosing the right packaging for your business, there's a lot to consider.
Before you shell out on custom-designed boxes and monogrammed tissue paper, you first need to determine how much you can allocate to packaging. Once you have considered your cost of goods and all the other expenses involved in running your business, you should know how much you can spend per product.
Just a few extra cents can make a big difference to your profit margin, so make sure you shop around to find the best packaging you can for the money.
Marketplace and warehouse requirements
If you sell on a marketplace like Amazon and use their fulfillment program (Amazon FBA), you need to make sure your shipping packaging complies with their requirements.
Amazon has strict guidelines around packaging. For example, if your product is in a box with perforated sides, then it must be able to pass a 125 cm drop test. They also have guidelines around applying your barcodes (also known as FNSKU labels).
The size of the shipping boxes is also important. Get your packaging size wrong, and you could end up paying extra FBA and storage fees, so it’s vitally important that you don’t make your packaging any bulkier than necessary.
If you’re using an external warehouse, chances are they will have their own guidelines about shipping packaging, so make sure you check this. Of course, you can have different packaging inside your shipping packaging, but the more packaging you have, the higher your costs.
Different types of packaging
Once you’ve checked the requirements for your shipping packaging, it’s time to consider what packaging options would be most suitable for your product.
The main things to think about are:
- Boxes: From plain cardboard boxes to custom-made gift boxes, boxes are the go-to option for any bulky items or anything that requires lots of protection with cushioning.
- Padded mailers: If you sell small items like jewelry, mailers or padded envelopes could be ideal. They tend to be lighter and more streamlined than boxes which will keep your shipping costs down.
- Bags: Soft items like clothes will often be shipped in bags. This keeps the packaging weight as light as possible which reduces delivery costs.
- Tape and stickers: Branded tape and stickers are a great way to add a bit of personalization to your packaging. I do this with many of my Amazon products as it’s often more cost-effective than getting custom-printed boxes.
- Packaging filler (such as tissue paper, kraft paper, packing peanuts, etc.): Sure, you could use brown shredded paper to fill your packaging, but if you’ve got the budget, there are so many other options out there. You could get your logo printed on your tissue infill or use brightly colored foam to keep your products in place.
How to brand your packaging
If you don’t brand your packaging, you’re missing out on a massive opportunity.
At the very least, you need to have your logo somewhere on your packaging, but there’s much more you can do. For example, you could create branded packaging using your brand colors, typography, or tagline.
It’s not just about logos; think about the materials you’re using.
If your brand is all about sustainability, that should be reflected in the type of packaging you use. Similarly, if you sell luxury makeup, you might consider using high-quality boxes, ribbons, or tissue paper to give customers a premium, unboxing experience.
Remember, if your packaging is beautiful, then your customers are more likely to hold on to it, which means your brand stays front of mind for much longer.
Is there anything else you can do to build customer engagement through your packaging materials? For example, could you include samples of other products or information about a new product range?
If your product is in a hobby niche, perhaps you could include a guide to help customers develop their new skills. I’ll often include a free guide within my product packaging—the customer is more likely to enjoy the product and engage with my brand website and social channels.
Anything you can do to improve customer experience will help drive future sales and boost customer retention.
Pack It, Ship It, and Improve Your Customer Experience
There are so many exciting options now when it comes to ecommerce packaging, so step away from the plain brown cardboard box and let your imagination run wild. Your customers will thank you for it.
Good ecommerce packaging is no good without a streamlined shipping process so make sure you familiarise yourself with our easy guide to ecommerce shipping.
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