Should End Users Buy Their Packaging from a Factory, Converter or Distributor? Part 2

Service – In terms of personal and delivery. Your mid to large size business is important to them and their response usually confirms it. They too look for that sweet spot where their equipment matches up to a customer’s requirements and they are usually quicker and more flexible when it comes to a rush order or unusual request.

Pricing – as I stated in part one, when the equipment fits the job, they can be incredibly competitive because even though they may buy their raw substrate or materials from a manufacturer, the large converter buys at a very good price. Corrugated manufacturers appreciate sheet business because it adds up to quick and relatively easy tonnage which quickly fills a truck.

Lower Operational Cost – yet another reason why a converter can regularly offer better pricing than a manufacturer. Converters are typically smaller operations with lower overhead and labor costs.

Resources – many converters have fully staffed design labs and are more than willing to work through the sometimes painful design stage on a project. Here is another key – the resources they have are usually more accessible than at a manufacturer where you may have to stand in line behind a long list of huge CPG customers.

Multiple product lines – you will rarely see a single product or single product line distributor because providing customers with choices and a variety of product is what we do. A multi product distributor is also able to provide valuable assistance in vendor rationalization and consolidation programs. Recently Kraft announced they were reducing their vendor base by 40%, to help control and reduce costs. That told me that low volume vendors, especially single product, small volume vendors will soon appear on Kraft’s “former vendors” list.

Technical and packaging systems expertise – Sometimes the best solution is not a product but a system. Speaking as someone who has spent his entire adult life as a distributor, selling equipment to end users, packaging materials are not the greatest cost to an operation, labor is. I have seen thousands of times when the material cost was relatively insignificant because the distributor was able to dramatically reduce labor cost.

Equipment Support - distributors tend to be local companies and they are always looking for ways to endear themselves to their customers. Providing them with equipment and post installation service is one of the ways they maintain the relationship. Many vendors are able to supply a customer boxes, bags or pallet stretch film but who supplies them with equipment and service for their carton erectors, tapers, bagging systems and pallet wrappers? Usually it is NOT the manufacturer or the converter.