Does your packaging company have a problem? Chances are, yes, even if you don’t realize it.
Lurking in the dark are unscrupulous characters waiting to pounce on an opportunity to make money at your company’s expense. It may sound like something right out of a crime novel or a movie that features a dark alley and unsuspecting victim.
While this scenario may not play out on the studio backstages in Hollywood, it is just as sinister.
It’s called the grey market … and all packaging companies have this problem. Here’s how to solve it.
Familiarize Yourself With The Grey Market
While thousands of goods hit the market everyday, packaging companies know first hand that some don’t always make it, whether it’s an issue with the product itself or the packaging that holds the product.
Packaging companies are often responsible for ensuring a faulty item has been destroyed due to a misprint, wrong formula or some kind of other mistake that makes the product no longer viable.
For companies that package products for manufacturers, their reputation is on the line. That means ensuring any products or packaging do not end up becoming grey market goods.
What is the grey market? A grey market situation exists when your products are being sold outside of your control. This does not necessarily mean your product is being sold illegally, but you won’t get a portion of the profits that are reaped. For example, if an item is bought low in one country, but is then sold in a country where a higher price tag can be demanded, this is considered a grey market good.
The grey market covers a grey area where one circumstance may be legal (such as the situation above) and another illegal. As a packaging company, you should be deeply concerned about the many different ways a product or manufacturer’s packaging can end up on the grey market.
For example, here are a few scenarios that spell bad news for a manufacturer and your packaging company:
- Knock-off alert: A manufacturer decides to update its packaging for a product. You are in possession of old packaging that you have been instructed to no longer use. You discard this outdated packaging, but someone comes along and digs it out of the dumpster. This unscrupulous character takes the packaging home, puts a knock-off inside, and sells the item at a cost less expensive than the one your manufacturer produces. The customer thinks she is getting a great deal. In reality, she’s not, and the reputation of your client is now at stake.
- Hazardous alert: A manufacturer has notified you that it has been court-ordered to destroy all of its product under a certain serial number. You possess some of these products since they were in the process of being packaged before heading to distribution. Now you are responsible for responsibly disposing of these products because they can cause harm to human or environmental health. You dump them at the local landfill, thinking you are following your client’s wishes. An untrustworthy worker at the landfill picks up the product and decides to sell it on eBay to make a few extra bucks. Now you and your client can be held liable for not ensuring that a dangerous product does not make it to market.
- Health alert: A food manufacturer discovers that its packaging is incorrect. Pre-printed labels contain the wrong information about ingredients found inside. This could be a life and death situation for consumers with allergies if the wrong nutritional information is on a label. If an individual gets a hold of the outdated packaging and decides to sell his own product inside under the guise of the national company, lives could be at risk.
Sound scary? It can be, which is why it’s important to familiarize yourself with the different ways the grey market can impact your operations.
Keep Excellent Records
Manufacturing companies that prioritize their brand know the importance of staying on top of their products. They keep careful records and threaten legal action if one of their products ends up on the gray market.
As a packaging company, it’s important to do the same to preserve your reputation and working relationship with manufacturers. Often, you should think of your clients’ products as your products, whether it’s the items themselves or the packaging.
Keep excellent records of any product or packaging that comes in your possession and that you must dispose of. You can keep a database that lists the serial or lot ID numbers of these items.
Any time an item must be disposed of, ensure that there is accountability the entire way. With products deemed hazardous, this is called cradle to grave, which means the generator is responsible for the waste from the moment it is generated to the moment it is disposed of. This can be applied to any product, however. As a packaging company, if you must dispose of a product or packaging, you want to ensure it safely makes it to its end destination and is properly disposed of before it ends up in the wrong hands.
Work With A Certified Product Disposal Company
An experienced certified product disposal company will ensure any unsellable products or unusable packaging WILL NOT fall into the wrong hands.
What is certified product disposal? Certified product disposal is the process by which the goods that a company produces are destroyed or disposed of legally. This can include anything from products that have expired to goods that have been replaced by a newer version or product line. This also includes any packaging that encases the product.
A certified product disposal company will maintain tracking and security throughout the disposal process so that you can have peace of mind. This chain of custody typically includes photographic and video evidence of the destruction and ensures the highest level of professionalism.
When evaluating certified product disposal companies, make sure the company:
- Offers proof of destruction
- Is properly certified, licensed and bonded
- Has experience disposing of product packaging
- Provides references from other companies that handle product packaging
The last thing you want to happen is for others to benefit from your good name and hard work, and in the process, damage your reputation. The best certified product disposal companies will dispose of defective, outdated or packaging that is no longer needed so that you AND your clients can have peace of mind.
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