Consumer packaged goods are the lifeblood of any retail establishment. The impact of key logistics on these retailers can mean the difference between profit and loss. Casepacking manufacturing and cartoning both play integral roles in a firm’s performance as well as its market share.
Quantity Impact
Evidence suggests that the number of units per container has an effect on a product’s rate of sale. Larger casepack quantities tend to increase the market share of faster selling SKUs, while having a negative impact on slower performing products due to stockouts at retail. Additionally, these larger quantities are often the cause of execution issues.
Cost Implications
Many retailers prefer smaller quantities due to the availability of shelf space. It is also more cost effective for store owners to buy fewer cases of product. Conversely, suppliers or distributors find that dealing with larger quantities results in lower overall shipping costs.
Supply Chain
Retail buyers and distributers understand the implications of casepack quantities for fast-movers and slow-movers. They use this information in product development, price calculations, negotiations, and analysis.
The quantity of product per casepack affects the supply chain and retail marketing in many ways. This will include box prices, handling costs, order quantity, delivery quantity, shelf inventory costs, shelf profitability, assortment costs, opportunity costs, and weight per case.
Larger casepack quantities improve cost efficiency for suppliers due to lower box-prices and handling costs. This is the main reason why distributers and suppliers deal with large quantities. As for retailers, handling costs decrease with higher quantities as well, in addition to lower ordering costs and shelf filling costs per item.
The result is retailers must insist on higher quantity casepacks for fast-moving items, while limiting slow-movers to small quantities. Large retailers generally accept bigger quantities because they generate a higher volume of sales per product per store.