Why do we have minimum order sizes?

We often get quote requests that don’t cross our production threshold, and we unfortunately need to turn these requests down. But why do such a thing? Surely you want to get every sale that you can? Let’s unpack this production threshold and talk about why we have minimum order sizes.

Sourcing and stocking

As a lean flexible packaging manufacturer, we keep a stock of materials, especially paper and plastic rolls, either in our warehouse or on order to meet our production requirements.

Individual rolls can weigh as much as 1.5 tons which in turn are used to make tens of thousands of bags.

However, these materials are bought and sold in bulk, frequently by the truckload, to ensure that all players in the value chain remain cost competitive. This can present a challenge if a customer asks for material that isn’t in stock, doubly so if it’s a small order.

Current supply chain configurations mean that sourcing small quantities and niche materials are more expensive and time-consuming, ultimately driving up the price of the finished product and extending delivery dates.

Costing and manufacturing

When calculating a quote for a production run, several factors are considered including anticipated material costs, labor costs, and overheads. To understand how a quote is affected by this, let’s take a look at the manufacturing process.

At the higher end our presses can run as much as 1960 ft/min. With a bag width of 20”, the press running at full capacity can print the equivalent of ~1170 bags in one minute!

Our machines are engineered to only do a couple of things, but they do them very quickly and very efficiently. So before we start a production run we calibrate the machines for the job. This involves an initial test run to make sure the finished goods will pass quality assessment and meet the expected technical specification. The so-called setup material is recycled, but still incurs a cost that gets factored into the quote. Due to the operating speeds of our machines, these test runs can represent a significant amount of material for small orders.

Labor is also charged on an hourly rate, so even if an order is expected to take less than an hour, the quote would be for the full hour. Additionally, for printing jobs there are sunk costs like flexographic plates, inks, and solvents. These plates are custom-made for each design and stored for future use.

Sunk cost, setup cost and equipment designed for large scale production mean small orders will carry a proportionally higher per unit cost than similar orders for larger production runs.

 

Palletizing orders is crucial for efficient storage and shipping. Sharing pallets creates logistical challenges both at our warehouse and when unloading trucks and are avoided at all costs.

So, why minimum orders?

Our experience has taught us that smaller order sizes have punishingly high per unit costs and associated resource waste in both the manufacturing process and supply chains. In keeping with our core values and focus on sustainability, we strongly advise considering these financial and environmental costs when embarking on your flexible packaging journey.

Recommendations

Before submitting a request for a quote consider your facility(ies), equipment, and inventory turnover. We have as many minimum order sizes as we have products, but our rule of thumb is to at least fill up a pallet.

  • Ask how often you anticipate placing this order and if it’s an order that you’ll be scaling over time?
  • Do you have enough room for a 48″ x 40″ pallet on premises?
  • Do you have the equipment to unload and move a fully loaded pallet?

For businesses that have limited storage, or limited bulk handling equipment (think forklifts or pallet jacks) we’d recommend working with a distributor that provides inventory and warehousing services, order processing, and batch delivery. Bulldog Bag Ltd. already supplies most large distributors on the North American West coast and we would be happy to recommend one to suit your needs.

Asking for Bulldog Bag by name helps strengthen our relationship with distributors and ensure you get packaging that’s made Bulldog tough.

For businesses that require custom printing but can’t place large orders, don’t fret. Bulldog Bag Ltd. is constantly reviewing the feasibility of smaller minimums and can coordinate with distributors on long-hold bulk orders. Businesses with lower inventory turnover could also consider alternatives that may offer a better per unit price. For example, unbranded stock bags can be purchased from distributors in smaller quantities closer to the price point of large orders.

Alternatively, if working through a pallet of bags in a year still seems like a stretch, consider ordering from hot stamp or digital print facilities. These suppliers are set-up specifically for small print runs and may even use our products to print on.