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For as long as people has sold things, sellers have struggled to figure out how much inventory to keep on hand. When it comes to packaging, the question is a bit different. It’s not related to how many products you need to keep in inventory, but what quantity of packaging supplies must be at-the-ready for incoming orders.

There are all sorts of complex math equations that attempt to deal with this age-old dilemma. They’re a good start, but all fall short in certain areas. Few can be applied directly to the packaging question with consistently good results. The fact is that packaging is of paramount importance for any company’s long-term financial success.

It’s important to know about the most common ways that large and small businesses deal with the question of how much packaging inventory to keep on hand.

How To Deal With Fluctuating Selling Trends

One of the essential rules of business success is having enough product, and product packaging ready to go whenever a customer orders something. This is perhaps the essential core mission of every for-profit company: delivering ordered goods to buyers. It’s how your business survives.

Unfortunately, there are several challenges in having the right amount of packaging supplies on hand for orders. The primary reason for this dilemma is the fact that consumers don’t purchase goods and services in a linear fashion. And while there are seasonal and regular selling cycles, there are exceptions to every rule. Here are some of the techniques and concepts your business can use to avoid having too much or too little packaging supplies on hand.

• Strive For JIT: What is JIT? In the early 1960s, Japanese manufacturers came up with a system the named “just-in-time” inventory control. By definition, it attempts to perfectly match production schedules with arrival of raw materials orders from a company’s main suppliers.

  For everyday sellers, JIT can be a way of viewing the ideal inventory level. In other words, what would be the perfect amount of packaging inventory to have on hand, exactly when you needed it? Ideally, you could order just the right amount of product packaging from your supplier and have it arrive “just in time” for outgoing orders.

• Avoid Shortfalls: In the real world, it’s nearly impossible to know in advance how many customer orders your company will get for products. That’s why most merchants keep a specified amount of packaging supplies on hand, either stored at a company facility or with their packaging supplier.

  The main thing to remember is the principle of “Better to have more than needed than less than needed.” If you’re going to err on one side or the other, it makes more sense to have extra stock on hand. If you have too little, your customers will receive delayed shipments, or none at all if they cancel due to slow delivery.

• Use the Supplier’s Knowledge: Many of the best and most experienced packaging supply companies know very well how to deal with the problem of inventory. They can show you how to estimate the ideal amount to keep on hand. The common math involved is related to the EOQ, or economic ordering quantity. That’s the ideal amount of packaging supplies you want to order on a regular basis.
• Use a Computer Software Program: There are some freeware and proprietary software products out there that can help even the smallest of companies figure out when to order packaging supplies and how to set precise quantities with each order. Some of the proprietary programs do come with a fee and can be tricky to set up. It’s usually wise to hire an IT pro to implement the software for you if you don’t have someone in house to do so.
• Communicate With Your Supplier: Always let your packaging supplier know how much inventory you have on hand. That way, they will be able to calibrate your order based on the age of what you have, what specific additional items you need, and other factors. You can even set up an inventory link with your packaging supplier so that they always know what you have in your possession, how many orders you have on the board, and when you are likely to run low on any given packaging item.
• Work With a Fast Supplier: One of the easiest work-arounds for inventory challenges is to work with a supplier who can create the packaging materials you need quickly and get them to your business location as rapidly as possible. When you build a long-term relationship with a top supplier in the packaging industry, this is an achievable goal.

The Many Kinds of Inventory Expenses

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It’s easy to overlook the cost of maintaining inventory. The expenses are subtle and often quite hard to track. Fortunately, some of the biggest costs associated with inventory are easy to see and measure.

If your company keeps large quantities of packaging supplies on hand, attempt to examine how much you might be spending just to hold the inventory. Those expenses include the following categories:

• Risk of loss: Everything you own and store on-site or off faces the risk of loss through theft, fire, flood, damage, or other factors. Every year, billions of dollars in inventory losses are reported to insurance companies. When you store packaging supplies far in excess of what you need, the risk of loss can be a considerable monetary expense.
• Insurance: Whatever you own must be covered by insurance, and that includes everything in your company’s inventory storage facility, offices, and on any property owned by the business.
• Rent: You’re paying rent of a precise number of square feet of business space. When any of that area is taken up by large quantities of packaging materials, you’re losing out on the use of that space, no matter how small it is.
• Potential for obsolescence It might feel good to purchase an entire year’s worth of packaging materials, but what happens if you change product designs or sizes? Additionally, what if your company decides to stop selling that particular product line? You’re out whatever you paid for the packaging materials, which could be a significant amount of capital.
• Personnel Costs: No one leaves doors unlocked and inventory unattended. Whenever you have quantities of packaging materials on hand, you need to pay for hourly wages of security personnel to watch over them. The bottom-line fact about unnecessary is that it costs money to maintain, even if it’s sitting in the corner of an otherwise unused warehouse.

Avoid These Costly Packaging Order Mistakes

Human error is a fact of life. Fortunately, we can avoid many mistakes if we know what they are and plan for them. When it comes to placing orders for packaging materials, several errors are quite common. They include filling out the online order form incorrectly and requesting either the wrong quantity of materials or the wrong packaging materials altogether.

Additional frequent errors include forgetting to have an authorized manager sign the order, not communicating as quickly as possible with the supplier when a mistake is discovered, purchasing too many (or too few) packaging supplies, not double-checking the math on every order with respect to price, quantity, and dates, and not using a software program to plan for upcoming order quantities.

Getting the Inventory Question Right

There’s no reason to fret over the perennial question packaging inventory. That’s because it’s possible to work with a supplier that has the experience and flexible policies to make sure your needs are met at the right time.

At Mid-Atlantic Packaging, we work with businesses of all sizes and have been helping owners and managers stock the ideal amount of packaging supplies without having to worry about stock-outs or holding far too many supplies in-house.

If you have questions about inventory and how much you should have on hand at any given time, give us a call on our toll-free line, 800) 284-1332, and one of our experts will be glad to answer your concerns. Or, check out or website for additional information. We’ve been helping businesses just like yours for nearly 40 years, so we’ve learned to deal with every challenge the packaging supplies industry can come up with. We look forward to hearing from you.