Packaging that arrives on your customer’s doorstep with damaged products inside could be doing serious damage to your bottom line—and costing you customers.
Let’s put the problem in perspective. UPS and FedEx ship about 8.6 billion packages annually, with a damage rate of about 10%. That means for just those two shippers, 860 million packages are reshipped annually because of damaged packaging or products.
Consider:
- More than one-third of all packaging-related returns are due to damaged products, and consumers expect full refunds.
- As The Atlantic put it about the returns of undamaged products, “Add up the labor to pick, pack, and dispatch the item; the freight both coming and going; the labor to receive and sort the now-returned item; the cardboard and plastic for packaging; and the sorting facility’s overhead, and the seller has already lost money.” For damaged or defective items, the costs can be even greater. Shopify estimated that giving customers refunds or shipping them replacements for damaged products costs the average business $10 to $20 per item.
- Replacing a damaged item also has a huge sustainability cost, due to duplicated manufacturing processes and transit miles. You’re basically doubling the carbon footprint of the product your customer bought. According to one study, 5 billion pounds of returned e-commerce items (mostly due to damaged or open boxes) end up in landfills annually.
But the biggest cost of damaged packages and products is to your business’ reputation. If a shipment is damaged, delayed, or lost, 41% of consumers say it has a negative impact on their perception of your brand. Even worse, 51% of consumers are unlikely to repurchase from you if their product arrives damaged (Flowspace).
Why Customer Retention Matters
Loyal customers are worth up to 10 times as much as their first purchase, according to the White House Office of Consumer Affairs. That same study also found that acquiring a new customer is six to seven times more expensive than keeping a current one.
Likewise, the probability of selling to a new prospect is only between 5-20%, according to Marketing Metrics. But if you are selling to an existing customer, the probability rises to 60-70%.
Hold on to your current customers! One important way to do that is making sure their packages and products arrive undamaged—and that’s where Premier comes in.
We offer package design to make you stand out from your competitors, protect your product, and minimize freight costs. Once you’ve settled on a package design, our certified ISTA (International Safe Transit Association) test lab will put your package through a series of tests to ensure its package integrity throughout the shipping process.
These tests with state-of-the-art equipment simulate the vibrations, potential drops, and temperature changes a product may experience during distribution and transportation. Our testing ensures your package and product will arrive safely—and keep your customers happy.
Find out more about Premier’s design and testing services.