CPGs on Deadline by Amazon to Overhaul Packaging
Some consumer packaged goods brands have been asked by Amazon in recent months to overhaul their product packaging to be greener, sturdier and cheaper to ship, according to Forbes.
From August 1, 2019, manufacturers with products identified for the packaging improvement program will be charged an additional surcharge on non-compliant items at $1.99 per item shipped. Brands that upgrade their packaging to meet the requirements ahead of the deadline will receive a credit of $1.00 for each item shipped.
“The idea is to reimburse brands for the cost of fixing their packaging,” says the founder of packaging consulting company Fuseneo, Brent Lindberg. “Brands that upgrade their packaging might even make substantial money from the effort before the August deadline, beyond just offsetting the cost of fixing their packaging.”
The Wall Street Journal first reported on this initiative in December, citing channel profitability as a driver of some broader changes rolled out to the company's suppliers. But Lindberg says that Amazon’s motives appear to be focused just as much on right-sizing packaging and reducing waste than it is about reducing shipping costs.
The issue is that brands often supply Amazon with the same inventory that they would put on a retailer shelf. Designing packaging that will stand up in a fast-moving warehouse environment is completely different to designing packaging that is primarily designed to catch a shopper’s eye while displayed on shelf.