What I Learned Sourcing Packaging for My Nutraceutical Brand {Million Dollar Idea Project}
As you know, I’ve been working what I’m calling the Million Dollar Idea Project, a side project I am doing in my spare time to turn $5,000 into $1,000,000 using only the tools I have available to me. I’ve pulled cash out from my bank account, and will be keeping track of everything I spend that money on and keep you abreast of my progress.
The idea is to build a customized nutraceutical company, and in my research of competing brands, I’ve found one player whose aesthetic I am most interested in learning from, Care/of, who ultimately sells a similar product, but doesn’t use machine learning to adjust the stack.
Their packaging looks a lot like tea sachets in a tea box (and they’ve got some killer photography, which is something raising 16 million can get you):
I’ve never had to produce a physical product like this, but I’ve gone ahead and placed an order to see what I can learn from that. I’ve also signed up for PillPack to understand the same thing.
Let’s start by saying, they’ve nailed the aesthetic. We will be lucky to replicate it to some degree.
Let’s also go out and say it, the package printing industry is fragmented, difficult-to-navigate, and sketchy.
I want to do two things with my packaging: first, experiment with various permutation of packaging to identify packaging that makes our customers happy, and then ensure that this packaging can scale.
For the first phase, we are okay spending more money, since we are looking to do smaller runs and test many variations. We need to understand what the second phase looks like, so that we can make cashflow predictions, but we don’t need to dive too deeply on that just yet.
So our primary goal is to find packaging that looks great, stores the nutraceuticals safely and securely, and is easy to open.
At first, I was obsessed with the packaging that PillPack uses, which appears to consist of a large plastic dispenser with a roll of perforated plastic packages that are pulled off for use (I will report back after I receive mine).
Using hard plastic feels like a losing battle if you’re shipping it every time, but I assume it’s some kind of refillable situation. That’s not a terrible idea, but probably too costly for our skeletal budgets.
I set out some feelers, but couldn’t find any custom print-shops that have this format ready for digital or low-volume printing. I then waded my toes into the murky waters of AliBaba, the (in)famous provider of cheap Chinese goods.
Just a Small List of My AliBaba Discoveries
- It is an incredibly noisy website. Things are very poorly organized, everybody’s page is wildly different, prices are very uncertain, and as a scared outsider, it’s incredibly difficult to know how not to get scammed.
- Everything is ultimately custom and up to negotiation. Sales appear to occur primarily through chats, in which details are discussed.
- The language barrier is a bit of an obstacle. It’s hard to tell if you are effectively communicating the specs you need to.
- These manufacturers will never say “no” to you about whether or not they can accomplish something. While I don’t know whether or not they can, I got suspicious by the level of flexibility with which they claimed they could operate.
- They are relentless with follow-up messages, even after it becomes clear you won’t be working together.
- It’s probably best to find a supplier that offers something very close to what you want to achieve, with photos of completed products.
- For custom work, it is clearly a scale player. The setup costs for print runs are relatively high and the minimum order quantities are also quite high. While unit costs are very low, it’s ultimately too expensive for this early experimental phase. We will likely want to return here when we have volume proof.
As part of this process, after numerous messages back and forth, and falling in love with Care/of’s packaging, I abandoned my dream of getting perforated strips of packets, and came around to the idea of getting something more standard: tea sachets.
High-quality tea sachets are strong and moisture-proof. You want to find packaging that has aluminum foil sandwiched between layers of polyethylene to ensure the optimal protective packaging.
There are two possible broad classes of printing processes we can choose from:
- Gravure Printing, which requires the manufacture of printing plates (high setup costs), but can print at much higher volumes with lower unit costs. When we go for volume, this is the likely process we will be using. We can use CMYK halftones for a washed-out, full-color experience, or we can use stick to a limited palette for a more vibrant end-product.
- Digital Printing uses a digital printer to do smaller, more custom print runs in full color, with a slightly washed out effect (since it is CMYK). Modern digital printers can do pretty high volumes and pretty small halftones, but still won’t get close to Gravure for volume. We will likely be using this for the initial print run, but we will be ensuring our designs work in Gravure.
We found a digital printer that does flat pouches designed to be used for coffee (and Cannabis!), Roastar, which is U.S.-based and can handle volumes under 10k units with quick turnarounds (allegedly).
Additionally, while they have a minimum order quantity of 1,000 units, each design only needs to have 100 units, so we can experiment with lots of different designs.
As for costs, we can get digitally printed sachets at a quantity of 1,000 for $0.41 each. At 10,000 units, we’d be down to $0.15 each.
For gravure printing, through AliBaba, most suppliers quoted me at around $0.042 for 10,000 units, and $0.027 for 100,000. 10,000 units is a pretty common minimum order quantity. Setup costs are also around $75-$100 for each printing plate, which is one per color per design. Shipping is also a doozey, and there are some unknowns from an importing standpoint…
To put all of these prices in context of the end-product, if we do a morning and night packet on a 28-day schedule, that’s 56 packets. On the high end, that’s $22.96/month, down to $1.51 on the low-end. We won’t expect to be turning a profit during the experimental phase. Ideally, we’d break even, and as long as we know it can be done profitably at scale. At these prices, that’s definitely doable.
We also need boxes for dispensing the packets, and shipping boxes as well. At first I wanted these to be the same box, but my initial research has not led to many good solutions. We’ll get back to this in the future… one thing at a time!
