Too Many SKUs? How Co-Packaging Can Simplify Product Bundling and Distribution
Adding another product variation sounds simple enough. Then come the different package sizes, multi-packs, promotional bundles, retailer-specific configurations, and seasonal versions. Before long, a growing product line can turn into a growing inventory headache.
For brands managing a large number of SKUs, the challenge isn't necessarily having too many products. It's managing everything that needs to happen to those products before they're ready to ship.
Co-packaging can simplify that process by handling bundling, kitting, labeling, packaging, and other finishing work outside of your primary production operation.
Why Do More SKUs Create More Complexity?
A SKU, or stock keeping unit, is used to identify a specific product or product variation for inventory purposes. One core product can potentially generate several SKUs based on its size, packaging, quantity, or configuration.
Consider a product that's sold as:
- A single unit
- A three-pack
- Part of a variety pack
- A seasonal promotional bundle
- A retailer-exclusive configuration
The product itself hasn't necessarily changed, but the operation behind it has.
Each configuration needs to be assembled correctly, tracked, packaged, stored, and ultimately shipped to the right destination. As SKU counts increase, businesses may need more labor, storage space, packaging materials, and processes to keep everything organized.
How Can Co-Packaging Simplify SKU Management?
Co-packaging moves many of those secondary packaging tasks to a specialized partner.
Instead of building a separate internal process every time you introduce a new bundle or packaging configuration, products can be sent to a co-packaging facility where the required finishing work is completed.
At Speedway Packaging & Distribution, co-packaging services include kitting, bundling, labeling, shrink wrapping, multi-packs, display builds, and retail-ready packaging.
This can give businesses more flexibility to introduce different product configurations without continually expanding their own packaging operations.
How Does Co-Packaging Make Product Bundling Easier?
A bundle that looks simple on a store shelf may require quite a bit of work behind the scenes.
Imagine you're creating 10,000 promotional packs containing three different products. Each pack requires the correct items to be picked, grouped, packaged, labeled, and prepared for distribution.
Doing that manually with your existing production staff can quickly pull people and resources away from other work.
A co-packaging partner can establish a repeatable process for assembling those bundles at scale. That makes co-packaging particularly useful for:
- Variety packs
- Multi-packs
- Promotional kits
- Seasonal bundles
- Retail displays
- Special product configurations
Once completed, the new configurations can be treated as finished SKUs and prepared for storage or distribution.
Can Co-Packaging Help With Seasonal and Retail Promotions?
Not every SKU needs to become a permanent addition to your operation.
Holiday bundles, limited promotions, club-store packages, and retailer-specific configurations may only be needed for a few weeks or months.
Creating permanent internal packaging capacity for a temporary project can leave businesses with equipment, labor, or space they don't need once the promotion ends.
Co-packaging provides a more flexible option. A company can create the configuration it needs for a specific campaign or customer without permanently changing its primary production process.
That flexibility can also make it easier to respond when a new retail opportunity arrives with packaging requirements your current operation wasn't designed to handle.
How Can Co-Packaging and Distribution Work Together?
Creating the SKU is only half the job. It still has to get where it's going.
When co-packaging, warehousing, and distribution are handled by separate companies, inventory may need to travel from the manufacturer to a packager, then to a warehouse, and eventually to its next destination.
Every transfer creates another handoff to coordinate.
Working with a provider that combines these services can create a shorter path. Products can arrive at a facility, be assembled into the appropriate configuration, stored, and prepared for distribution within the same operation.
Speedway Packaging & Distribution combines co-packaging with warehousing and distribution capabilities across its network of facilities, allowing businesses to manage more of the post-production process through one partner.
When Should a Business Consider Outsourcing Co-Packaging?
There isn't a specific number of SKUs that automatically means you've outgrown your current process.
Instead, watch for the friction those SKUs are creating.
If your team is constantly switching packaging configurations, assembling promotional bundles, applying labels, managing temporary workers, or moving inventory between multiple vendors, outsourcing may be worth considering.
Co-packaging can also be useful when you're:
- Launching new SKUs
- Preparing for seasonal demand
- Entering a new retailer
- Creating promotional bundles
- Experiencing sudden volume increases
- Running short on internal labor or packaging space
The question isn't simply, "How many SKUs do we have?" It's, "How much operational complexity are those SKUs creating?"
Frequently Asked Questions About Co-Packaging and SKUs
1. What is the difference between a product and a SKU?
A product can have multiple SKUs. Different sizes, quantities, bundles, or packaging configurations may each receive their own SKU so they can be tracked separately within inventory.
2. Can a co-packager create multi-packs from individual products?
Yes. Individual products can be combined into multi-packs or other configurations based on the requirements of the project.
3. Can co-packaging be used for short-term promotions?
Yes. Seasonal packages, promotional bundles, and retailer-specific configurations are well suited to outsourced co-packaging because businesses don't necessarily need to create permanent internal processes for temporary projects.
4. What's the difference between kitting and bundling?
Kitting generally involves assembling multiple products or components into a single kit. Bundling typically combines finished products into one sellable or promotional package. Depending on the project, the processes can overlap.
5. Can products be stored after they're co-packaged?
When your co-packaging partner also provides warehousing, completed products can potentially move directly into storage before distribution instead of being transported to another facility.
Turn More SKUs Into More Opportunity, Not More Complexity
Expanding your product catalog can open the door to new retailers, customers, and promotions. The operational work behind those SKUs shouldn't become the thing that holds growth back.
Speedway Packaging & Distribution provides co-packaging, warehousing, and distribution capabilities to help businesses manage everything from product bundling and multi-packs to retail-ready packaging and fulfillment.
By bringing more of the post-production process together, businesses can spend less time untangling packaging logistics and more time deciding where their products go next.
Learn more about Speedway Packaging & Distribution