What they do: Pakible lets anyone create custom product packaging online. Using their online editor, customers can fully customize and brand their own retail packaging or shipping boxes in minutes. All they do is upload their artwork, choose from a variety of vetted packaging options that meet their needs, and then purchase the quantity they want. Pakible routes the order to the most qualified manufacturer from their network, and customers can receive samples in only 10 days.Why it's a big deal: Designing and purchasing custom packaging is an industry that has been left behind by technology. The design and purchasing process can take 3-4 months of phone calls with manufacturers and faxing specs back and forth. Pakible is bringing the industry into the 21st century by standardizing the design and manufacturing process. Customers can design their packaging in minutes, and Pakible automatically forwards the order to the best manufacturer in their network for that kind of packaging. Companies no longer need to deal with long negotiations with manufacturers or have in house packaging expertise. Pakible handles it all with a model that’s always less expensive than going direct. It’s no wonder they’re already profitable and shipped over 1,000,000 units last month.
Because they’re bringing software efficiencies to an incredibly large but forgotten industry. Package manufacturing is huge - $85 Billion huge - but there has been zero innovation to help customers and manufacturers communicate and manage production better. Sales guys still make house calls and communicate with customers via fax, and customers send manufacturers iPhone pictures instead of design specs. Every single company and e-commerce store that cares about their brand uses custom packaging, and Pakible is the first to leverage software to make designing and ordering easy.
These guys innovate quickly. They built the entire Pakible platform in January, launched in February, and already have 850 clients. They’ve also pioneered batch ordering to finally make custom packaging affordable in low numbers. It’s no wonder they have way more orders than they can handle and need funding to scale faster.
Pakible makes it easy for any business to create custom product packaging online. With Pakible, any company can fully customize and brand their own retail packaging, shipping boxes, or product containers. Brands design, order, and pay for their packaging all online, they never have to talk to any manufacturers, negotiate prices, or figure out how to send their artwork. We make the entire process easy - companies upload the art, pick the style and quantity, and we handle the rest.
How did you come up with the idea for Pakible?
Philip and I had trouble packaging our own products in our previous companies. I used to google “packaging manufacturers” and call around for weeks asking questions, negotiating, and explaining exactly what we wanted. Quotes took at least two weeks, and actual packaging always took at least 3-4 months to arrive. Philip and I used to stay up late lamenting how terrible the experience was, and decided Pakible would be our next project.
How do you understand the core problems of the industry, and how are you solving them?
Package manufacturing has come a long way recently, but the sales, design, and ordering process hasn’t changed in years.There is really great manufacturing infrastructure in place across the world. Once they have all of the specs and the art and the things that they need to actually understand what the customer wants, then the manufacturing of the packaging is pretty simple. But the rest of the industry is disorganized and slow, thousands of manufacturers still compete for small markets, all operations are run over the phone, email, and fax. Package manufacturers still send out sales guys in a 50 mile radius to make house calls, consult on package design and pricing. The communication network is horrible - it takes months to come to a conclusion about what the customer actually wants so they’re comfortable ordering thousands of pieces. This is why large companies like Apple have a team dedicated to packaging, but most companies still deal with this ancient system that is slow and imprecise.
No one has ever made a platform that helps customers design, and order online. We solve the headaches in two ways. One is we standardize the process and make it super easy for people to upload their artwork, describe the specs of the item and package, and pick a quantity. The second part is we communicate the design to the manufacturers in the exact format they need for production, and manage the entire production cycle. The manufacturers continue to do what they do best, which is manufacturing the packaging.
How do your prices compare with the old school manufacturing process?
We’ve pioneered a new batch model that allows us to beat any packaging order under 2,000 units. The real cost of manufacturing is setting up the machines and printers, once the machine is setup and running it doesn’t cost the manufacturer much for each additional package. So when a customer wants only 500 units they effectively get charged for 2,000. We have a standard set of package shapes and sizes to choose from so we can group 100 different clients that are all producing 100 boxes and get the prices reductions of a customer ordering 10,000 boxes. We get cost reduction for everybody by ordering for everyone together, it’s kind of like crowdsourced package production. Small orders would typically cost $5-$20 per package, we get that down to $1 to $3 a box and we absorb all the setup costs with our easy online design and ordering system.
Is it a problem that you don’t offer unlimited package choices?
Most retailers don’t know exactly what type of box they need, they have a product they want to ship and a brand they want to showcase. The actual package specifications are usually the last thing they think about, so we recommend package options that will be perfect for their product. Rather than require the customer to specify every angle, millimeter, and cut for their package - we take care of the package spec. details and present a few options we think will fit best. Limited options is actually a benefit for most customers because most don’t understand the nuances of actual package design and production, but they do care deeply about branding and colors which they can always customize.
Which types of package manufacturers do you work with?
We work with several different types of manufacturers, because all of them specialize. This has been the problem in industry in general, because some people are good with short-runs, other people are good with very large-runs, other people are good with only boxes and others do flexible packaging and bags and poly materials. We work with all of these specialists, so we can handle any type of packaging.
This is great for our customers. It used to be that if a package required the work of two different specialists, retailers had to source and coordinate with both manufacturers or pay one sourcing specialist to handle the whole process which is incredibly costly. We have a manufacturing network that we coordinate for our customers at the best price.
Can you walk through the entire process?
Let’s use a subscription service as an example, they want to send a box of goodies out every month to their customers. They need a package designed with their brand and logo so they come to our site, find their favorite box shape, design it with their brand, and select “500” for an initial order. The price appears right there, no waiting for a quote or a back-and-forth negotiation. Next they plug in a credit card, and press “Buy”. We take care of the rest and have the packages shipped to their door.
Can you order a sample first?
Yes we can definitely do samples. First customers can visualize a 3D rendering of their package online, then they can order a trial of ten packages which we manufacture for them at cost, 10 boxes at $10. We print these as fast as possible so customers can see a sample right away. If they then want a different color, we print another 10 at cost and send out the new color. We want to ensure the customer has exactly what they want before mass production.
Who are your customers? What’s your sweet spot?
We have many types of customers, but the majority of them come to the platform because of the package styles we offer. So we have tons of subscription services and apparel companies, Shopify and other Ecommerce sites are popular clients. But we also have some higher volume customers — we’ve been producing for Reddit and Soylent for example, and they’re ordering in super high quantities. As we offer more package designs our target customer base will widen even more.
Why do big customers like Reddit and Soylent come to you?
The smaller size companies want a simple list of different boxes they can choose from. But the higher volume customers already have a design they’ve customized, or they’ve produced before with other manufacturers. They come to us for our network, to bid down pricing, and utilize our manufacturing relationships and logistical expertise. Soylent might have four fulfillment centers around the country, so we’ll match them up with the four best package manufacturers close to those centers to save money on shipping. And manufacturers want to work with us so badly that they’ll gladly give us the best prices for these large volume customers, typically 10-20% less than our biggest customers are used to getting themselves.
Why do manufacturers like you so much?
Because we’re not just one client, sending them one order. We approach manufacturers with a list of potential orders, all prepped and ready for the factory floor. Normally they have to hold the customer’s hand, use resources to sell the customer, help them design everything, quote all possible combinations, provide samples, etc. We take care of all of that and send them a design ready for manufacturing. All they have to do is press ‘go’ on their machines.
What are your acquisition costs and how valuable is a customer over time?
I do not like making these predictions precisely because it is very early. We just shipped our first boxes several weeks ago, so we don’t have a lifetime customer value just yet. I expect our customers to come back for many months, if not years. Our ideal customer is one we can scale from 100 to 1 million packages with, we want to grow with our customers so we are both more valuable to each other over time.
What happens when customers go around you and work directly with the manufacturer?
If that happens our product isn’t easy enough. We won’t lock customers into a contract if they don’t want to, or prevent them from working with our manufacturers if they really want to. We believe we can be so easy, just one click to order 100,000 units, that our customers will want to stay with us as they scale. We’ll continue to get the best rates, the quickest turnaround times, and companies won’t ever have to hire a full-time packaging specialist. Plus we’ll offer cost savings to customers willing to sign short term contracts with us, they’ll commit to six months of orders in advance and we’ll cut their rate because we save money too. It’s a win-win situation for everybody.
When did you launch Pakible, and how has it gone so far?
We sold our first packaging in January, roughly 10,000 units. Then we launched the website in February, and have been growing 150% every week since then.
How is that 150% calculated?
150% more clients have ordered from Pakible since our launch. Attributing growth to number of packages ordered is difficult because it’s so skewed sometimes. For instance Soylent just ordered 780,000 units, which took our growth over 1000%. Using that number isn’t relevant. We started in January, in February launched the site; have grown 150% every week since then, and in the month of March we shipped one million units.
What do your margins and revenue growth look like?
The margins are pretty simple. We make on average 20% on every unit of packaging that goes out the door. From January to March, we did about $282,000 in revenue.
What types of customers will fuel more growth?
We are excited by both large and small companies. Large brands like Soylent are awesome from a volume standpoint, but they often take longer to close. But smaller brands are awesome too, we don’t have any sales process for them, they just find our site, design, and order.
We’re looking forward to the next three months. We want to plug into as many platforms as possible to expand the number of people that Pakible can reach. First we’ll integrate with Shopify, so as soon as a retailer opens their online store we’re there: “Do you need bags or boxes for shipping?” alongside an image of their package already branded with their logo and site colors. We want to integrate into all these sites that need shipping solutions, like IndieGoGo and Kickstarter. Finally we’ll keep our eye on startups raising money as a key indicator they’re about to expand. That is how it worked out for ‘Soylent’. They just raised a financing round to scale their operations. It made a lot of sense at that point; they had the money to spend to grow and we were there to help manage it and make it a lot easier.
How much have you spent on marketing so far?
The majority of our interest has been inbound, we only spent $5k on highly targeted Facebook ads to get the ball rolling.
How big is the market for this kind of packaging?
We aren’t a generic package manufacturing company, we don’t make the brown boxes and packing peanuts, we do custom packaging unique to our clients. $85 billion is spent on custom printing every year in the U.S. Roughly 3.5 billion of that is spent on digital printing, which is the fastest growing segment, and we make digital printing a whole lot easier.
Why did you start with digital printing?
We’ve started with digital printing because it allows the low volumes and the flexibility we need at this point. As we grow, and more large volume producers sign on we’ll need to expand to Flexography and Lithography printing processes which are better for the large orders. Our current digital printers are excellent, but we want to find partners that do Flexo and Litho really well, so that when a customer orders 1 million units— we have the right manufacturer in place that can just flip a switch and be right there ready to go.
What companies are you similar to in other industries? How do you fit in?
I compare Pakible to companies like Kickstarter, Shopify, and Teespring. Kickstarter makes it a lot easier for anyone to get started and find a following. Imagine life without Kickstarter, if you wanted to raise funds for some project, you would have to go contact people individually. We see packaging like that — before Pakible you had to go and contact all your manufacturers individually and figure it out yourself. Now it’s all handled online in one place. We also see it to be just like a Shopify site, before Shopify a retailer would have to contact ten developers and find someone to build a completely custom site. Teespring is also similar, they make t-shirt printing super easy online and handle everything else. All these companies have leveraged technology to reach the masses, set up an online store in a few minutes, or design and print a shirt in five minutes. We are bringing technology to packaging, simplifying the entire industry so anyone can design, buy, and ship their goods in just a few minutes online. Just like these companies before us, we’re making is so much easier for anyone to run an entire business right from their laptop
Tell us about the team.
We are a very mean team of three. I’m technical myself, I have a lot of experience in software and I’ve also done a lot of start-ups. Phillip, my co-founder is the other half of the core team. An industrial engineer with experience sourcing packaging, he leads all of the sales and manufacturing relationships. The third is Chase who leads creative direction and packaging design for the company. He is the perfect third person. He can figure out what packaging we are going to make next and what we can do to design it in a way that works for a lot of people.
How do you think about competition?
No individual manufacturers will jump into the space for a number of reasons. They won’t invest in software / web technology, they’re not good at it, and they’ve seen others in the industry fail so often. But there are other big packaging companies and technology companies that we think about. Uline is a big player, and would have a lot of interest in making something like this. Other companies like CafePress or Lob that are already doing similar things in similar spaces would be probably interested in adding this. This would also make sense for a company like Shyp who is already packaging and shipping for people. It would probably make sense for them to get involved in custom-branded stuff and provide an extra layer on top. These are all the types of companies that we think about.
What are you focused on that will ensure you win?
There are two things we’re focused on. One —we need to build up our manufacturing network. We cannot do the manufacturing on our own; there are too many specializations, the cost is too high and the machines are too troublesome for us to become a manufacturing company. But we want to build the best manufacturing network up out for sourcing packaging. The second is something that no one can do overnight — it’s the technology layer that sits on top of our manufacturing partners. This layer makes it really easy for people to create packaging online, with a great interface and well researched, designed, and tested package options. Just like Squarespace for web design we provide a number of options to start with, the customer can then customize and build exactly what they want with ease. Perfecting this software will be hard, but once we do it will all the more difficult for other companies to catch, us.
What if customers want custom packaging your platform doesn’t provide?
Large customers will have more complex needs, and we’ll work them to circumvent our typical options. They’ll furnish us with complex CAD or Adobe designs and we’ll optimize it for our manufacturers on their behalf.
Why is it so difficult for manufacturers to deal with clients and their packaging designs?
Manufacturers tell us horror stories all the time about customer requests and the extra work they have to do to to finish designs for production. Some clients even send iPhone pictures of boxes they’ve seen and expect manufacturers to guess all the dimensions, design the artwork, and recreate it. They deal with this sort of stuff all the time, and it’s part of the reason the process takes so long.
Our software makes it easier for both clients and manufacturers. Clients can design online, and then we can tailor the designs to each manufacturer and their preferences individually. We send preformatted files in the structure that the factories need with all of the settings they need ready to cut and print.
What’s next for Pakible?
The reason we are fundraising is not because we need the money, we are actually profitable today, but we want to scale faster. We want to partner with 15 manufacturers in the next six months — we have 4 today. We want to ship another 2.5 million units in the next three months. We want to add a new product style to the website every single week. Our next target market is the T-Shirt and Apparel companies - we want to pioneer the first digital packaging for poly-apparel bags.
We want to be the leaders of technology and software for manufacturing processes. The mantra has always been: “This is how packaging works, and will always work.” We don’t believe that for any business, especially manufacturing. We have automated a very manual process, we’ve aggregated and pre-selected the best package options and manufacturers, we are saving time and money for both vendors and customers. It’s only been three months and we’re already changing how it works.
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