How to Decide Packing Sizes & Options Per Fulfillment Center

Why package sizes matter

Much like printing a label, carton sizes for shipping purchased goods is an essential requirement to every order. Outside of a few edge cases where products might be shipped in their manufacturer packaging (e.g. appliances), you physically can’t ship an order without a box. Functional packaging is existential, in a sense.

Here’s how packaging typically works:

  1. Fulfillment Centers (FCs) structure their pick-and-pack processes around someone, usually an associate, deciding which type and size of packaging to select for a given order. Rarely is the entire process fully automated or owned entirely by robots.
  2. That person receives an order consisting of one or more SKUs. She then goes and gets those SKUs from storage in the FC.
  3. With the SKUs in hand, the associate needs to decide which packaging will fit your product. Certain categories might use softpacks or envelopes, but for the vast majority of companies, it’s boxes.

Sometimes, selecting the right shipping box size is a straightforward decision:

But more commonly, the associate is dealing with multiple SKUs and hard geometrical puzzles. The greater the complexity, the slower the decision making, the greater the chance of the least efficient choice being made, and in general just worse throughput performance. Operations can make her life easier with a combination of standard sizing and even better software.

Understanding your order and shipping profiles

The first step towards optimizing your cartonization is getting a handle on the profile of your orders and shipments.

Orders

Orders in this case means the properties and attributes of goods included in an order. Your profile is highly contextual to your business. What matters are the physics around the order: shape, dimensions, weight, vulnerability, and the variability amongst each.

The goal is to get a handle on the physical properties and variability of what you sell.

Shipments

While linked, the profile of orders is different than the profile of shipments.

Shipping analysis depends on understanding the performance and attributes of your fulfillment network, primarily the carriers.

Fulfillment centers

You need to know what you typically ship (orders), and how they typically ship (shipments).

If you have one FC, then orders usually equal shipments in the sense that there is little variability between how the what is shipped, so to speak.

But if you have two or more FCs, then additional variability is injected.

You are likely to have more splits, which can be an efficiency drag if unmanaged.

Packaging materials

With a comprehensive understanding of customers and shipping in hand, the first decision is to pick the packaging type.

Branding

Branding on the outside of boxes can be a savvy marketing play, an expensive distraction, or both.

A typical cost/benefit calculus determines if it’s a good idea for your business. For example, an additional $0.05/box might be worth it for some businesses but not for others.

The mistake is computing the calculation purely based on hard costs like ink. The pitfall to avoid is found in complexity added to process.

Inserts and promotions

Raise your hand if you saw a 20% Door Dash coupon when opening your Blue Apron subscription box.

Inserts and promotions are increasingly becoming common, but they are extremely divisive throughout the industry.

They are indicative of how a box is packed, so let’s recap a typical packing strategy.

Dunnage is first. Associates will include materials to ensure safe and efficient transit of goods. It serves a purely functional purpose.

Second is a packing slip, or a list of all items included in the package. This is helpful in most cases, but critical if your fulfillment process takes advance of split shipments. Packing slips are potentially the cheapest and best impact on toppling promotions, however. If slips are a longer sheet of paper, it is straight forward to advertise a new product line to customers on the slip itself. Customers are usually in the midst of a positive experience, unboxing something they have been eagerly waiting for, so a promotion at that moment works well.

The trick is to ensure the generic nature of the promotion on the packing slip: Make it universal to all customers to keep variability and engineering costs to a minimum.

The plays

The following plays are for companies who must use boxes and can’t simply anchor on simpler packaging like softpacks for all orders.

Historical analysis

Look at all orders (not shipments) that left each FC last year on the same day. It will be the closest approximation of anticipated order profile and volume. (People don’t tend to order winter jackets in June, for example.)

Right-sizing your box sizes

With this analysis in hand, figure out the maximum number of boxes to support each FC. This is an answer that is part art and part science.

How Shipium helps manage your packaging strategy

The Shipium platform offers a Carrier Selection product which integrates at a given FC.

The product helps determine the cheapest/fastest shipping method available per-order based on probable performance, not based on the generic carrier SLA.