Yes and no. The difference is that this is not a blanket set of charges which everybody pays. It provides specific, standardized charges only when the package is required to change. In addition, the true benefit comes from the tracking of specific workflows resulting in discreet charges that pay for that workflow, rather than a series of disconnected, untracked packaging tasks.
Charges are deducted directly from product supplier’s invoices which are already being paid by your organization. These charges are accumulated in a special accounting bucket for use to pay for the tasks required by the Private Label organization
Our team has over 50 years’ experience structuring outsourcing relationships… and not just for IT. When you apply the discipline to different kinds of tasks, such as Private Label, the synergies become apparent. In effect, many private label operations are “outsourced” already as a myriad of “art suppliers” who provide photography, illustration, creative work, printing, packaging design, color compliance, and software… to name a few. Problem is, these are often disjointed and do not gain economies of scale and standardization. When you roll them together with standards, “suppliers” become “outsourcers”.
Most suppliers are used to vendor charges already. In this particular case however, it actually can save them money. When one supplier for candy needs to rework 7 packages, it costs them more money then when a retailer does it as part of a managed program such as this. The charges which are kicked back are usually only 75% of the cost for the supplier to do it themselves, and a managed program provides better quality over all the Retailer’s SKUs.
It can be set up in less than 6 months, but the financial benefits usually reveal themselves over the course of the following 12 months, depending on how many PL creative suppliers are impacted.
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