I love my original packaging. Stitch Design Co. created it with my initial direction and totally exceeded my expectations. I wanted the box to be very high end – something you would keep. My mom likes to keep ribbon and wrapping paper in old retail boxes and I had visions of Alesya Bags clients using their boxes again and again as well.
The packaging was VERY well received. People raved about it to me…they even Pinned it. It was exactly the response I wanted.
At the beginning of 2012 my father (who handles my accounting) and I closed out the books for 2011. It was an interesting exercise because it was my first year in business and we’d just had a flurry of sales from the holiday season. While I came close to breaking even, I most certainly did not. I’m still operating this business in the red.
My dad looked at my major expenses and started reciting them off to me. “Cost of Goods Sold (the bags themselves), Marketing (logo creation, design, photography, etc.), Internet Expenses (website creation, upkeep, online sales platform) and hmmm…Packaging.”
Crap. Packaging. I knew it was expensive, but had no idea it would make my top five line items. That wasn’t good.
A lot of companies add the cost of packaging into their final retail price. I had not. The price of the bag is only related to the actual cost of the bag. Looking back, perhaps this was a mistake. Or perhaps I just wanted the high end packaging so badly that I didn’t care.
But I have to care. I can’t run this business in the red! And now that I have the start-up costs behind me it is really obvious what my ongoing costs will be.
The boxes are purchased in quantities of 500. Each box is $8.50. Once you add on the tissue paper, card and shipping box the cost goes over $10. Plus the cost to actually package the bag which is around $5.
I couldn’t stomach the thought of changing the packaging. The box was part of my vision for the brand. My marketing ego was getting the best of me.
But then then I got some hints. A client in New York City said she saw another Alesya Bags box when she was going to throw hers out. (She thought it was a good thing – “You are taking over the city!”) I had one of my own boxes rip and had to get rid of it. And one of my best friends Charlotte said “I kept the box for several months and finally had to throw it away because I just didn’t have room for it. But it made me sad!” (I know, she’s too kind.)
The evidence was clear. As much as people liked my boxes, they ultimately had to throw them away. Sigh. That’s not good for a Top 5 expense.
This time around the box will be different. As you might have guessed, that is the rendering above. This will be strong enough to ship the bag so I won’t need two boxes. Tissue will still be included, along with a dust bag.
My overall packaging costs will be cut by more than 50%. This is a VERY good thing for a new business. Cutting costs means you can stay in business!
But what do you think? Will you miss the high end boxes? Should they return for Christmas? Do you think clients would be willing to pay more for gift boxes? I’d love to hear your thoughts on my packaging saga.