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Ultimate Guide On How To Start Profitable Labels And Packaging Business Online

purity muriuki

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How to start label business

The demand and supply fundamentals of the Labels and Packaging Industry:

Let’s start with a simple question, when did you last buy a loose product from an unknown convenience store? Or, what is the ratio of you buying a non-branded product in comparison to a well-packaged and labelled product from a credible brand with all the essential information printed on it?

With the rising maturity and per capita income of the cosmopolitan markets, the demand for labels and packaging has increased substantially and it will keep growing! According to a recent survey, it was found that the volume of labels printed by the global labels market was nearly 60.3 billion square metres in the year 2020!

It was also found that the volume of labels is expected to grow steadily from 2021 to 2026 at a CAGR of 4.5%. The survey suggested that the industry is expected to reach a volume of almost 78.5 billion square metres by 2026. (Source)

So, if we are to put things in perspective, as long as people keep buying products, there will be a demand for labels and packaging. Now that you know of a business that will have formidable demand for a long time, who do you think can start the labels and packaging printing business?

Well, the answer might have been different a few years back, but with the growing infusion of digitalization in the labels and printing industry, the ease of doing business increased. Thus, anyone with the right target market, right platform, right technology and equipment and resources can start a profitable labels and printing business.

But, how will you find the right market, right technology and equipment? Well, to help you make an informed decision, here are a few trends that you must look out for in different geographic markets across the world and their various demands.

Steps to start a profitable labels and packaging business online:

  1. Find your target market:

The first step is to identify the target market that you wish to tap with your packaging and labelling business. If you wish to start locally; you can try and conduct competitor analysis in your area to understand what your competition is offering and why. If you are looking to cover the global market, try and start with a few high-demand products and then move towards a niche.

Consider this when you’re deciding your target market:

The maturity of the market in Europe and the US is higher compared to the world and thus, there are high demands for sustainable packaging designs, linerless labels and advanced digital printing technologies.

Also, there is an increased demand for exclusive packaging designs and the inclusion of technologies such as NFC technology for provenance and loyalty tracking in the beverages and luxury packaging market. The use of RFID and barcode labels are also increasing in the retail industries. Lastly, the Food, Beverages and pharmaceutical packaging markets have a higher demand for products with more design areas as FDA compels them to put detailed information on their products for customers.

Talking about the Asia Pacific market, while the European and the US market have higher maturity, the Asia Pacific market has medium maturity but it still holds the biggest market share of 40% when it comes to labels and packaging demand. With the increasing demand from end-sectors such as food, beverages, pharmaceuticals and other FMCG markets, the demand for labels and packaging will rise even further in the near future.

While the new sustainable product packaging and designs, customized packaging and labels as well as digitally printed packaging are being increasingly adopted in the Asia Pacific markets, there is still a huge demand for conventional plastic and pressure-sensitive label and packaging materials in these markets.

The four major types of labelling materials used in the global markets are pressure sensitive, glue applied, stretch and shrink sleeve and in-mould labelling. Now that we have covered the demands, trends and use of materials in various markets, let’s move towards how you can start an online label and packaging business.

  1. Get your personalized eCommerce platform:

The next essential step is to develop your personalized eCommerce platform with all the required functions and processes to create a brand-centric platform. Try and create unique user experiences and navigational journeys as they can help you create a distinct image in the minds of your customers and help your brand stay on top of the minds of your customers.

  1. Integrate a packaging and label design software:

To ensure that you could design your label and packaging products easily and to provide your customers with the ability to design their own products, you must integrate packaging and online label design software into your eCommerce platform.

An ideal label and packaging design tool will not only provide customization capabilities, it will also help you make your business processes seamless and also help automate business workflows for faster approval and turnaround time.

  1. Create a strategic business plan:

Once you have figured out which segment to target and why, it is then time to figure out how and when you will enter the business and with what inventory. This will require a detailed strategic plan of launch, reach and expansion. You must also plan the budget meticulously with contingencies to ensure that you have long-term survival reserves.

A pro tip: create only digital inventory using your label and packaging design tool and integrate the print-on-demand supply model to ensure that you do not have to bare the preliminary inventory investments.

5. Finalise the packaging materials that you would deal in:

Once you have your entire blueprint and design portfolio ready on your e-commerce platform, it is now time to focus on printing materials. If you are planning to outsource printing, make sure that you create a list of materials based on the available printing vendors that you are planning to collaborate with.

  1. Choose your material supplier:

The next is to source your raw materials. This decision will be a conscious one because of the rising need or provenance in the labelling and packaging market. For instance, if you are dealing in sustainable packaging materials, ensure that your supplier has a clean production process without any blood money to prove a sustainable provenance to your end-sector brands.

  1. Choose your industry end-sectors:

While you might have finalised the general target market, with the sorted vendors, materials and suppliers, you could finally create a list of all the brands that you could target with your inventory. Try and gather information not just on the brands, but also on the decision-making roles of the brand and a credible reference for initial contact.

  1. Create a brand:

After all the meticulous planning, it is now time to give an identity to your business. Register your business with a brand name and create a local presence with a business location. Since you would be majorly dealing online, you could also make your print facility or your warehouse your registered business address.

  1. Investments/ Capital:

Once you have your business registered, it is now time to start creating partnerships, procure inventory and plan your marketing and branding budget. For these, you would need capital and thus, you must sort that out too.

  1. Delivery strategy:

After all the internal procedures are done, the last thing you have to figure out is the supply chain partners. Find reliable vendors that can help you implement your business supply model which can be printed on demand or other in your target market.

  1. Conduct branding and marketing activities:

Lastly when you have the entire required arsenal ready; it is now time to get into the market and conquer it. Create a detailed digital and conventional marketing plan that would help you get noticed in the eyes of your target customers.

The trick is to evolve to sustain:

If we look at the history of the label and packaging industry, the industry has thrived over the years but it is also faced turmoil with the changing market demands and evolving technology solutions. To ensure that you stay relevant in the business, you must stay ahead of the market and create a flexible business model with the right technology solutions on your side.

I'm a passionate full-time blogger. I love writing about startups, how they can access key resources, avoid legal mistakes, respond to questions from angel investors as well as the reality check for startups. Continue reading my articles for more insight.

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