Sustainability and Pricing
Pricing is a hot topic; one we, like many businesses, get asked about frequently.
A common inquiry we receive is how the sustainability of our packaging solutions impacts our pricing; paired with a desire to better understand how our price points compare to other brands.
Taking a cue from the transparency in our packaging materials, we’ve created this comprehensive pricing guide to provide a clear insight into our pricing structure and what factors play into pricing models.
We love connecting with eco-minded companies aiming to make decisions that sustain both their business and the planet. We’re always available to connect or answer questions you may have. Connect with us here!
A question we receive is: “Are EcoEnclose products more expensive than non-sustainable options?” Great question! Albeit, a rather complex one to answer as we offer over 200 unique products and there is a myriad of companies to which we could compare our shipping solutions.
Our sustainable options are comparable to, and at times less expensive than, conventional packaging counterparts in certain product categories. In other categories, our products are more expensive. And, when you compare EcoEnclose to deep-discount packaging options, we can be significantly more expensive (think: Dollar Store sunglasses versus Proof Eyewear sunglasses).
We’ll use poly mailers as an example: EcoEnclose’s 100%% Recycled Mailers (10” x 13”) are offered for as low as 16.80 cents per unit. Uline’s comparable product (made with up to 30% recycled content) are offered for as low as 17.6 cents a unit; 5% higher than our price point. One thousand of Lumi’s 10” x 13” blank poly mailers (30% recycled content) costs 22.9 cents per mailer, which is about 50% the cost of our 100% Recycled Mailer (though Lumi's prices decline considerably when you purchase tens of thousands of mailers). To give a fair pricing analysis for the spectrum of available options, discount options like Packzon exist; one thousand of their 10” x 13” thin poly mailers (0% recycled content) clock in at 4.7 cents per unit, which is considerably less expensive than our sustainable option.
What Factors Go Into Pricing?
For a company like ours, pricing is largely driven by cost structure.
Perform a quick search on Amazon and you’ll discover that you can buy a t-shirt for as little as $1.96. Or you can opt for an Organics Basics t-shirt with a price point of $39. With the Organic Basics t-shirt being almost 20x more expensive than the cheap Amazon counterpart, the price difference may seem extreme to some but the price point is informed by several important factors. Organic Basics’ strategic, eco-conscious decisions across their supply chain add tremendous value to the earth conscious consumer. However, these decisions add to their cost structure (and therefore, their pricing).
The differences between the lowest cost t-shirt on Amazon and a sustainable, fairly made t-shirt run parallel to what exists in the packaging world. Organics Basics’ t-shirts, crafted with GOTS certified organic cotton, produced in Turkey, and manufactured in Europe by workers who receive fair treatment and pay; made in a way that requires less frequent and less harmful washes.
Discount t-shirts are a blend of polyester and conventional cotton, and have no transparent, audited supply chain; meaning that the environmental impact and human rights implications of how they are manufactured aren’t known. Tragedies like the Rana Plaza collapse in Bangladesh, that killed 1,134 people, make it clear how important supply chain transparency and auditing are. In addition to the human rights implications, discount t-shirts release micro poly fibers in the washing machine; these fibers end up in our waterways and, our oceans, amplifying the damaging impact of micro plastics on the planet.
EcoEnclose has made informed decisions we believe are essential to living out our commitment to sustainability and offering our customers value and transparency in the form of true eco-friendly packaging. These decisions impact our cost structure, and therefore, our pricing.
Source Verified and Consistent Recycled Content: We can always tell you exactly how much recycled content is in our packaging. Some packaging products contain 100% recycled content and 95% post-consumer waste, while others have 88% recycled content and 15% post-consumer waste. These data points are available for every single product we carry. We don’t provide general ranges or use phrases like “up to 30% recycled”.
EcoEnclose sources verified materials that are consistent in their recycled content. We have a transparent, US-based supply chain and can trace our material back to its origins. Many packaging options are made with a variable amount of recycled content; often made from whatever material is available on the manufacturing floor. Many packaging providers are unable to verify the origins of their material because they work with overseas manufacturers and rely on their manufacturers’ own supply chain. This lack of transparency makes it difficult to audit and verify the authenticity of recycled content claims.
Impact of Manufacturing with Recycled Content: Converting recycled content into functional, quality packaging is still more expensive than using “clean” virgin content. The cost of raw, recycled material ebbs and flows in how it compares with virgin counterparts. Recycled plastic, for example, is sometimes cheaper than virgin and other times, more expensive; in step with the fluctuation of oil prices.
Beyond the cost structure of the raw material itself, it is important to understand that manufacturing with recycled material can be tricky and more expensive. It is more labor intensive, fickle (i.e. recycled plastic may respond differently to extruding, heating and sealing than a 100% virgin material), and sometimes requires specialized equipment.
As the demand for recycled content increases, and more consumers and businesses responsibly recycle their own waste, more material is available to go into recycled content. As these eco-conscious behaviors become more widely adopted, manufacturers will invest more in the processes, expertise and equipment to work with recycled material, allowing a gradual decline in the pricing structure. EcoEnclose plays a small role in this trend through our staunch commitment to maximizing the amount of recycled content in our packaging. In this way, we serve as a reliable and growing source for recycled paper and plastic.
Where Items Are Manufactured: All but one of our products is manufactured in the USA. Why? We’ve made this strategic supply chain decision for a few key reasons. Primarily, it allows us to audit and verify our supply chain and manufacturing partners. Second, it minimizes the carbon footprint of shipping and logistics across our operations compared to shipping into the US from overseas manufacturers. Third, while regulations aren’t perfect here in the US, companies are typically held to stricter environmental standards and have more favorable wages, working conditions and benefits for their laborers than many factories in developing countries. Fourth, with China instituting a ban on imported recycled plastic, an increased focus on domestic manufacturing with recycled plastic will help ensure our ability to recycle plastic in the US.
Lastly, we value the impact we can have on economic prosperity within our own country, as many of our plants are located in communities where historic industrial activity is diminishing (and along with it, jobs and economic security). We recognize that many exceptional companies have built responsible, transparent and impactful supply chains working with overseas factories. However, we have chosen to utilize a US-based supply chain based on principles core to our own vision.
The vast majority of packaging is manufactured overseas in developing countries as they have cheaper labor rates, cheaper cost of raw materials, and overall cheaper overhead (e.g. real estate costs, cost of adherence to regulations, etc).
For example, raw materials costs for poly and recycled poly vary worldwide. The Chinese government has a variety of policies in place to subsidize domestic poly manufacturers, allowing their manufacturers to enjoy significantly lower raw materials costs than the rest of the globe. In Malaysia, the cost of polyethylene trends 15-20% below the US, and in Mexico the cost is around 10% lower than in the US market.
Now, let’s look at differentials in labor rates; here’s how US factory wages compare to other countries: US factory wages are 80x higher than Bangladesh’s wages; 8x higher than China’s wages; 15x higher than Mexico’s wages; 8x higher than Malaysia’s wages These wage gaps exist not just for the workers involved in manufacturing packaging, but across the entire supply chain; from sorting through contamination of recycled content to the truck drivers transporting material.
These differentials are based on national minimum wages and do not account for the added cost structure of HR policies. Here at EcoEnclose, we believe minimum wage (currently $7.25 nationally and $10.20 in Colorado) is not an adequate living wage. We work hard to invest in and support the stability and growth of our employees and pay every member of our team above Colorado’s minimum wage. EcoEnclose believes that stability is made possible with paid time off and benefits, which are offered to all of our full-time team members. These decisions factor into our cost structure.
Size of Business and the Type of Operations: EcoEnclose is an independent, family-owned business (as are several other packaging providers). We don’t have the economies of scale of a multinational company with warehouses across the globe, each staffed with thousands of workers. Because we don’t move hundreds of millions of packaging items each year, we can’t survive on the same tiny margin structure of companies that rely on massive volumes to make their business models work.
Our independent nature and smaller size directly translate into an increased commitment to customer service and our ability to support companies of any size as they search for the right eco-friendly packaging solution for their business. If you have questions about a product or issues with an order, we welcome you to call or email us; we’ll work to provide a solution within 24 hours.
Our size also allows us to maintain a laser focus on our mission of environmental stewardship. We answer to ourselves and our customers; not profit-driven investors.
As a result of our deep commitment to both our customers and the planet, we’ve experienced rapid growth. With this exciting and rapid trajectory comes efficiencies that have enabled us to maintain or only slightly increase pricing, even as the cost of recycled material has gone up. For example, the cost of recycled corrugated has increased 35% in the last two years, but we have only increased our pricing ~18%. The cost of recycled poly has increased considerably, and we have been able to maintain our pricing structure on our poly-based products.
EcoEnclose has a particularly unique corrugated shipping box operation that impacts our cost structure and pricing in different ways. Our entire shipping box offering is engineered around custom boxes. We hold zero inventory of pre-cut boxes, and every box we ship is manufactured to customer specifications. We have implemented this strategy for a few reasons. First, holding a large inventory of stock boxes in multiple sizes takes up A LOT of space and the associated impact of this additional space, along with the utilities required to manage that space, are not in line with our mission. Second, we love encouraging e-commerce businesses to build boxes designed for their product offerings. This ensures that their shipping boxes make for a great customer experience and, more importantly, minimizes excess material being used and air shipped unnecessarily (no more #wastefulpackaging).
If you’re looking for a 100% recycled custom shipping box, and if you are looking for a relatively low number of custom boxes (under 5,000), we are a price competitive source. If you’re looking for a standard stock box, we recognize that discount options exist from companies that have pallets upon pallets of pre-cut and ready-to-shop box inventory. You may also find that with some specific boxes (such as very large RSC boxes), we’re unable to provide a competitive price.
Our website provides real time, immediate input on price per box based on box style and dimensions, so you can quickly discover whether our eco-friendly boxes are the right fit for your budget.
Innovation and R&D: We’re not just offering sustainable packaging; our goal is to spark innovation across the industry. It took years of discussion and iteration to release a 100% recycled poly mailer. Recently, we launched a 32.6% recycled bubble mailer; the result of almost two years of research and testing. Presently, we’re working with Living Ink Technology™ to bring the world’s first algae-based ink to market.
Some packaging companies are simply providers of product. They see what happens in the market and then copy and sell the technology of other companies. Therefore, they’re able to operate off of a lower cost structure as they do not bear the weight of investing in innovation.
Features and Functionality: Who would have imagined that shipping solutions could have so many nuanced features? To be honest, we wouldn’t have believed it before we got into this niche. But we now realize that when you compare two same-sized shipping solutions, there is a myriad of differences in their features and functionality that impact their cost structure.
Corrugated shipping boxes are made with different variations of sheets that have unique strengths and thicknesses. A 32ECT E flute is a thin, sleek corrugated sheet style that can withstand 32 pounds on its edge. A 23ECT B is a thicker corrugated that can withstand 23 pounds on its edge. A (specific size) literature mailer can be made with either of these sheet types and may have a different pricing structure. Two different rigid paper mailers will have varying levels of thickness and rigidity, and some may have a self-seal while others require tape to shut.
EcoEnclose poly mailers feature two tear strip and dual peel and seals for easy reuse for returns or exchanges; a feature that is not standard in the industry. Our poly mailers are 2.5 mil while some are 2 mil and others are a bit thicker at 3 mil.
Additionally, we brand EcoEnclose shipping products for a few reasons: The EcoEnclose brand signals to the recipient that the packaging is verified eco-friendly Recipients are encouraged to recycle and reuse the product and to explore our resources in order to learn more about sustainable packaging and what eco-friendly truly means.
Packaging, Your Brand and the Customer Experience
Packaging offers a certain je ne sais quoi to online shops. Not only does thoughtful, sustainable e-commerce packaging allow your company to ship products in alignment with your values, packaging also serves as the first tangible impression a company will make on their customers.
Consumers are more cognizant of e-commerce packaging than ever before; a mountain of boxes on their doorstep after a weekend of online binge shopping is a stark reminder of how much packaging we go through! Packaging that is not only recycled and recyclable, but that is branded as such, makes a powerful first impression.
It shows that a company is living its values well beyond a catchy phrase on a website. This brand impression influences their future behavior. Did you know 52% of consumers are more likely to repurchase from a company that uses eco-friendly packaging? 40% are more likely to share that packaging on social media and 14% are more likely to switch to a brand that uses eco-friendly packaging. This impact is huge.
When you opt for an eco-friendly cleaning service for your warehouse, it’s important and supports your values, but is not the investment that will directly result in customer loyalty and sales. Packaging serves as both a functional purpose (delivering your product) AND a marketing opportunity.
What may be a few extra nickels per bag (and as we’ve seen above, is often an equally or lower priced option), could be a low cost way to improve and strengthen your brand.
Do You Offer A Price Match?
EcoEnclose does not offer a price match because of the variables that play into packaging; two products can vary significantly. However, should you find a packaging option you feel meets or exceeds our offering with respect to functional features and sustainability, and is less expensive than our product, please reach out to our team at [email protected].
We can’t guarantee a price match but will work hard to understand price differentials and see what compromise we can offer.
Do You Offer Volume Discounts or Wholesale Pricing?
Yes, we offer volume discounts! Our volume discounts start at minimums as low as 2 units. Through our website, you can see a discount of up to 15% based on quantities ordered.
If you are a large and/or rapidly growing brand, that’s looking to order 15,000+ mailers or 5,000+ boxes at any given time, please reach out to set up a quick call so we can discuss your unique packaging needs. Within 24 hours, we’ll have an update on our capabilities and pricing ready for your review.
Do You Offer A Satisfaction Guarantee?
Yes! If you order from us and the packaging you receive does not meet your expectations and the standards we’ve set, please contact us immediately. We will work hard to remedy the situation, either by providing you with an alternative and/or processing a return; whichever solution best suits your needs.