SUMMARY

Margins on folding carton printing tend to be 30% – 40% range, higher than typical commercial print work. It’s no wonder that owners of print shops are adding packaging to their product mix. If you intend to add folding cartons to the mix, the first consideration is to implement an end-to-end automated workflow with an MIS/ERP system as the system of record and the heartbeat of the operation.

Are you among the sheetfed commercial printers looking for new products you can offer your customers to fill the gap caused by declining commercial print revenues? One area that is attractive is packaging – it’s a growth area, with research firm Markets and Markets projecting that the global packaging printing market, which was valued at US$352.1 billion in 2021, is projected to reach US$433.4 billion by 2026, a CAGR of 4.2%.  

Looking specifically at folding carton, which is likely the most logical entry point to the market for a commercial printer, margins can run in the 30% to 40% range, substantially higher than typical commercial print work. 

Yet entering the packaging market can be intimidating for many. In most cases, the customer contacts are different. And larger brands are relatively inaccessible to newcomers – packaging is mission critical, and they are loathe to change anything unless there is a compelling reason to do so!

But entering the folding carton market on a smaller scale may be easier than you think. One of the critical issues many smaller businesses face – and there are thousands of them out there –is the need to order high minimum order quantities for traditionally manufactured folding cartons. Maybe they only need 2,000 cartons, but they have to buy 20,000. Then what happens when regulations change or they want to change their messaging? For a small business, having a warehouse full of unusable folding cartons is not a winning situation! And the good news is that, as of the 2020 U.S. Census data, the most recent available, there are more than 5 million businesses in the United States with less than 20 employees. You can bet that these businesses are going to need folding cartons in small quantities and on demand, with the ability to customize them as needs change.

If you already have digital presses – sheetfed or wide format – you’ve got the first piece of the puzzle in place. This allows you to cost effectively print small MOQs for these small businesses, and give them many other options such as variation by season, geography, special events, etc. Other equipment you will need includes die cutters, creasers/scorers and folders/gluers to start. Some folding carton manufacturers ship the cartons flat for assembly upon arrival. That reduces the amount of equipment you need to get started and the overall shipping costs as well.

The other aspect that is quite different from commercial print is design. Here you need CAD software and an operator that understands computer aided structural design. Some customers may already have design files you can use, but others will need the CAD design services. Like many of you already do in commercial print, a vertical marketing strategy is also a good approach – choose industry verticals that are most likely to need short run, customizable, fast turn folding cartons.

• A modular system that can be customized to your needs and can grow with you as your business grows. There is no one-size-fits-all system; every company has different needs and requirements. However, there are some elements that are critical, such as an estimating/quoting/order entry system to quickly get accurate quotes out, and jobs in the door.
• With a wide range of products, short delivery times, and continuing supply chain issues, a solid inventory system is also important. There is nothing worse than accepting a rush job and finding out that the material you thought you had in inventory is not there.
• The ability to integrate with third-party systems. For example, if you are happy with your accounting system, you should be able to integrate that with a new MIS/ERP solution, minimizing the amount of change the organization needs to go through to modernize itself.
• A vendor partner that is knowledgeable, reliable and available to help you work through the pre-sale decision process, implementation and post-sale support, including advising on adding modules moving forward. Implementing an MIS/ERP is not trivial, but it is much less painful if you have a reliable partner to help you through the process.
• The partner should also have available a broad base of online and in-person training materials. This is especially important during the implementation process – the goal should be to have your team be as self-sufficient as possible when the system goes live. But it is also important to have easy access to bite-size training modules to refresh a worker’s knowledge or to on-board a new employee.
• Especially if you are looking to add folding carton or other packaging solutions, your partner should be knowledge about that sector of the industry as well, and have proven installs the demonstrate both the knowledge base and functionality of the system.