How to Build Customer Loyalty & Brand Awareness with Custom Packaging | #213 Phillip Akhzar

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Claus Lauter: Hello and welcome to another episode of the e commerce coffee break podcast. There's this old saying, there's no second chance for a first impression. And that also applies to this packaging that arrives with your goods, with your order to your customers. So a packaging is basically the billboard of what you do.

And again, it's the first impression. So you want to make sure [00:01:00] that this is point on, and this is a topic that we want to talk about today with me on the show. I have. Philip Akasa here, , he is the founder of aka. com and they are focusing on packaging. And we want to find out how customer packaging leads to customer loyalty.

Philip is not only the founder and CEO, but he also has a decade of experience in packaging. He is a San Francisco native and attended Cal Poly SLO as an industrial engineer before graduating from both Y Combinator and 500 Starts Up batch. So he has been in the industry for quite some time and we want to dive right into it.

Hi, Philip. How are you today? 

Phillip Akhzar: Oh, it's great. Great introduction. I'm doing well. How about yourself? 

Claus Lauter: Very well. Thank you. Packaging. A lot of merchants do not really think about it. They just buy some packages from UPS and ship the goods out and then they're wondering. So you can do this definitely much, much better.

What got you into the world of packaging and shipping? 

Phillip Akhzar: They definitely can't do much better. What got me into it is as an IE, I was running into packaging from a supply chain standpoint, [00:02:00] and it always ended up being this, a bottleneck and also a forgotten piece.

Of the puzzle, which is interesting because every physical product you buy needs packaging, but it's not thought of as well as much as the other aspects of supply chain, even though getting it wrong can have negative rippling effects across the rest of your supply chain. And it doesn't seem to be governed very well, either governed or tracked.

 tends to be a bit of an afterthought. So with that, I saw an opportunity not to mention. It's one of the biggest portions of the supply chain industry. It's close to a trillion dollars. It's not slowing down anytime soon. for me and my team, like what we're looking at is opportunities to capitalize on that because If you do get it right, if you're the type of business that sees it as a marketing spend, which you should, then you will get rewarded with the dividends of what you invested into packaging.

Claus Lauter: I agree. There's a lot of different aspects that a lot of listeners and versions might not think about when it comes to packaging. So it's not just what's around the goods. And when you're sending it out, there is things, as you said, there's marketing in there. There is [00:03:00] a saving on shipping in there. The branding perspective, sustainability is a part of it.

And all of that altogether basically contributes to your brands, to what you are, what you stand for. Give me a bit of an idea on these different aspects that go into really. To make packaging the way it should be. 

Phillip Akhzar: I think it's not to get too woowoo on you, but I think it's a very, it's personal, right?

 It's as personal as what your logo is, as what your branding is. And it's an extension of your branding. Like you had mentioned, it's like the billboard of your company. It depends and if you're the type of business that sells. This is an extreme case, but if you're selling, something that's on par with a Rolex watch, but it shows up in a brown box, that's conflicting information that you're sending to your client.

They would assume that it's fake and that it's not real on the contrary. There are many companies out there that make a modest product that comes in a package that's well executed and it brings up the status of the brand and also the product. They feel less.

This has actually been [00:04:00] studied through, data collection of dot com distribution surveys that they've done. But, they'll have less of a sense of buyer's remorse. Even if it comes in a package, that's positively reflecting of the brand because it makes them feel safe in their purchase, meaning that, oh, this was worth it.

Claus Lauter: 100% agree bias remorse, definitely a big thing. if you get something and from the first moment you love it, probably also it will limit the chance that people do a return because just the buyer's experience, the customer experience is on a different level now going through the process of creating your packaging that might be new for specifically small and medium enterprises.

We don't have a bigger marketing department. How does that look like? Which things do you need to go into? What do you think about it to get the packaging right? 

Phillip Akhzar: Sometimes you might save up for A seasonal like either like a, there's a few ways you can do it. You could save up for some sort of seasonal brand push.

, and what I mean by that is perhaps year round, you do send it in a brown box or a UPS box or USPS box, but [00:05:00] Black Friday, Cyber Monday. You're able to go to a company that provides low M. O. Q. So minimum order quantities that are lower than what's expected of buying packaging at your typical packaging provider.

So at Arca, we leverage what's called batch technology, which is essentially we take all our orders, we aggregate them, we push them as one order, and leveraging a print process called digital printing. we'll be able to print as few as one fully branded Box for you. If you're an online merchant it's the holiday season and you want to do something special.

 For your customers, you can come to us and you can buy 10 boxes fully branded if you want. there's no tooling involved, which means there's no commitment. Not to bore the listeners and get overly technical, but tooling is typically required for high volume purchasing of packaging and tooling is essentially that stamp that's used to be rolled in ink.

And then rolled onto the flat piece of cardboard, which then becomes constructed into your box. That's [00:06:00] expensive, like that tooling can cost thousands of dollars. And then you're stuck with that design because if you want to change your design, you have to change the stamp. With us, you're able to do, first of all, you are able to do that with us as well.

If you're doing tens of thousands of boxes a month, sure, come to us and we'll give you the tooling. But if you're doing smaller runs, and if you're a smaller merchant, And you don't have the money to dish out to tooling quite yet. You're not ready here yet. You have not graduated to that level. There's no tooling involved in digital prank.

You can pop out one box with whatever brand you want. And next week you can prop out another box with completely different branding, because there's nothing tying you to that initial brand. So that's one way where you can do it. Something seasonal. Another thing that some companies do is maybe just for the first purchase, they have a very.

Extravagant welcome experience for that package saying, thank you for joining our subscription. thank you for becoming a patron or a business of our brand. And then from there on out, every follow on package might just come in a basic polymailer. That's fine. , nobody's asking you to come in and [00:07:00] drain your bank account on custom branded packaging.

We're just asking that you treat it as a marketing tool and that you leverage it for the timing that makes sense for your business. And for many of the businesses that we see, it is non negotiable that during the holiday season, you should have something branded and for a first time experience for your merchants, you have something branded.

I don't think anyone can come up with that excuse to do otherwise when it comes to trying to build a following. And like you mentioned, brand loyalty for your business, it's a missed opportunity if you're not doing love the 

Claus Lauter: idea with really having a wow effect for the very first delivery and then have a fallback for everything that follows with other orders coming after that one.

Let's dive a little bit more into sustainability. Obviously, that's a big topic and a lot of brands want to be sustainable. And not only for their product, we can go all the way into the packaging. How does that work from your side? 

Phillip Akhzar: I would request that. We have this certification from.

Amazon it's a series of acronyms. It's called PFP [00:08:00] and FFP certification. So that stands for frustration, free packaging prep, free packaging. And then this one's key. It's ships in its own container. S. I. O. C. One thing that we might see many merchants do is they will ship their product in a package that comes in another package that needs to be eliminated first and foremost, before you change the material before you, you look at something sustainable from a construction of the package standpoint.

Make sure that you're using less material in the first place, whether that material is sustainable or not, use less of it, starting with that. So with SIOC, what we're able to do is construct a package that has a tray that holds your product safely in place so that it's not rattling around, so that you're not worried about the protection, and so that it's a nice presentation when you open the package, it's sitting, your product is sitting in a tray.

So. First and foremost, I would ask that people strive for ships in its own container [00:09:00] packaging from there. You can focus on the materials. Our paper materials are considered FSC forestry service certification, which means that you are sustainably sourced. You're getting your paper from sustainably sourced.

 Locations, meaning like you're using a paper that is certified to be sustainable. In addition to the fact that the production of the paper itself was done in a sustainable manner. So those are the 2 things I would look at 1st is how is this box? How is this package configured? And then 2nd, look at the material.

Some people rush straight to the material. When you could save a lot of money paying for less material of whatever you were choosing in the 1st place. Okay. No, 

Claus Lauter: makes perfect sense. I learned a couple of things here that I didn't know before that. Thank you for that. Now, you also have a course on Shopify that just shows you how close you are to e commerce and I will put the links in the show notes, but tell me what's the process of working with archive.

com as a Shopify merchant. 

Phillip Akhzar: Sure. It's very easy. If anyone has designed a business card or a t shirt online before, it's not so different. [00:10:00] You go to arca. com, you select your package, you brand it with your logo and you check out. It's that simple. Within a day or two, we'll have someone on our team, show you a preview and say, Hey, is this good to go?

We want to make sure that everything is a hundred percent to your satisfaction before going and printing it. So the process is very straightforward. Our turnaround times are as low as 10, 10 days to get your packages shipped out the door. And if you pay for rush, it'll only take a few days up to five days for a production.

We try to make it easy because we're living in a time where people are expecting it to be easy. We try to make it as simple as possible and continue to innovate to make it even easier. 

Claus Lauter: Okay. Tell me a little bit about the pricing. How does the pricing work for a small medium enterprise merchant?

Phillip Akhzar: It's all provided in real time. So if you go to arca. com, you pick your size. You want inside print. Do you want outside print? Do you want both? However many you choose. It's a sliding scale. So the higher the volume of packages that you order, the more affordable the packages may be. One important thing on [00:11:00] price that I want to mention that I think we don't advertise enough is samples.

So you could get a sample of a fully branded box for 20 bucks. Thanks. That's a fraction of the cost of what it's like in my early days when I was working in supply chain and ordering sample packages. You're looking at 250 up to a few thousand dollars, for a branded sample.

And it takes. Weeks, if not months, and it's probably coming from overseas, whereas if you can get a 20 sample produced here in the United States for a fully branded box, and then you can and make changes based on what you want to modify on the experience of receiving that package and that sample, then that's something I'm actually very, very proud of for the company.

And best part is if you go on and place a full order after that, we refund that cost. I'm a huge advocate. Thank you. Of that, I tell my support team to actually encourage sampling so that nobody just runs through the website and orders a thousand boxes right away. We say, well, that's fine.

We're [00:12:00] happy to, we're happy to take your business. Like, we're happy to have your business, but I recommend getting a sample first because sampling can also turn into having the confidence of ordering more as well. So this isn't us being altruistic. It's actually a business decision where we say, Yeah.

The more confident you are, the more you're willing to actually invest in something like this. That's exactly the type of relationship we want. 

Claus Lauter: I like the idea. I think sampling is very important because you want to have a really like a feel having the product in the hand playing around with that.

And as you said, you don't want to order a thousand of them and then you stuck with them and you don't like them, knowing that your customers possibly might not like it. So the sampling idea is really, really great. Give me a bit of a golden nugget from merchants on how should they calculate going forward over the year, over the seasons on how much they should order.

For packaging, is there some guideline or is like order 100 or 1000 or how does that work? 

Phillip Akhzar: With volumes Again, it's very personal. It's gonna depend on what type of following they have as a business. It depends on what sort of for example, I'm a big proponent of [00:13:00] pre sales and there's so many ways to get the word out now whether it's through social media or marketing campaigns to say, Hey would you be interested in signing up for our pre sale services?

, some of the best products out there have some sort of line, out the door , for purchases before the products even made Kickstarter being a huge example of that, right? And you have a bunch of people committing to the product. So that it gets created before it's actually even created. They buy it, right?

, but then with respect to you being a ongoing merchant and you've already had business and you want to be able to forecast, , look, there's nothing wrong with running out of inventory and creating a sense of scarcity. I would actually under order versus over order. But one thing that's interesting, , if you were.

If you're more of a mature business and you're running into this problem with respect to forecasting, , something that I'll touch on briefly is that, , we actually have an API that connects to any warehouse management system. , so that if you are a merchant. That uses a warehouse. So a 3rd party logistics provider, 3 P.

1. [00:14:00] If you send, let's say, your coffee mugs to this 3 P. L. And you say, Hey, I have 500 orders coming. Please pick pack and ship them on our behalf. We're going to send you 500 boxes and we're going to send you 500 products. , what our API does is it'll read the order data from the W. M. S. and figure out when you're running out of packaging.

And when you need to order more and how many more you should order, the merchant can set these values manually if they want, or they can rely on us to say, well, you've been selling incrementally 10% month over month. You should likely order 10% on top of that previous batch of packaging that we ordered because you're growing.

Or similarly, it was just a holiday season. Your normal numbers year over year for, , Q1 is actually only, 5% more from the previous year, not even close to the numbers that you have in Q4. So that's just an [00:15:00] interesting tool. That's for that's a message less for the startups of the world and more for the mature businesses that are interested in having some sort of, , forecasting and technology to help leverage making those decisions.

Claus Lauter: That's an awesome feature. I think that will keep a lot of versions away from sleepless nights. , before we come to the end of our coffee break today, , tell me in a few words about the packaging course on Shopify, what's in there. 

Phillip Akhzar: , it really is the basics. I'd say if you're a more, again, if you're a more mature business, I'm sure there's some things in there that you'll learn that you didn't know before.

, if you're in the first. That 1st or 2nd year of business, or if you're just starting your business, I definitely encourage you to take a look because there's so many. Mistakes that you might be able to avoid, some of which we already discussed today from PFP, FFP and, , SIOC packaging, , that it would just benefit you.

, it's less than 30 minutes long, , even though it took me an entire day to film that this was actually an interesting story. We got [00:16:00] the invitation from Shopify to create this course. And we were going to spend two weeks filming it and we had the camera crew ready and Shopify was generous enough to hire the camera crew and give us a budget for production and filming and everything.

 We have it scheduled for what was a Saturday. And this film crew was busy on Sunday. And that's not a problem because we thought we had two weeks. However, we filmed this back when my fiance and I, we lived in San Francisco, we now live in Austin, Texas, but in San Francisco, there was going to be a full city ordinance around closing up shop come Monday morning.

So what was supposed to be a casual every Saturday, or it was supposed to be Saturday, Wednesday, Friday, Saturday, Wednesday, Friday for two weeks, so like six days of shooting. Was packed into one day of shooting and, listeners, if you're watching the video , on my Shopify, , course, and that I have bloodshot red eyes, it's because we started at eight in the morning and we finished at three in the morning, , to most, I [00:17:00] feel like for most, , people in the entertainment industry, that's just an average Tuesday for me personally , to go over lines over and be filmed over and over, , for what felt like an eternity.

That was probably one of the most difficult days that I've had at the company and one of the few days that I've had an entire pot of coffee to myself that I can remember. So it was quite the experience. So with all the labor that went into it, I hope. Everyone listening that watches the course appreciates the hard work that went into it because we were committed to getting it done because we didn't know what was happening in the world.

And when we get an opportunity to film again, we didn't want to just film a piece of it and say, Oh, everything's fine. We'll probably the city will open up in 3 weeks, which they said it would. And it definitely didn't. We were indoors. From March to July of that year without leaving our apartment. It was crazy apocalyptic in San Francisco.

Let me tell you. Awesome 

Claus Lauter: story, I watched the course and I can tell you it was definitely worse. Therefore, than the coffee. , the outcome is really good. So I will put the link to the course in the show notes. [00:18:00] Where can people find out more about arca. com? 

Phillip Akhzar: Thanks class. , they can find out more about arca.

com by going to ARKA. com. We're we have a chat feature that you can come in. Say hello. Mentioned that you saw us on classes podcast. We'd love to hear it. I know we didn't mention this, but I would love to actually extend a discount code. Klaus 10. If you do come to Arca dot com, you're welcome to use that discount code for being a listener to your podcast club class.

. We have a chat feature. You can also message support at a r k a dot com. , our team responds within 12 hours at most. So we have a very responsive team and I think it is the support that my team provides, which sets us apart from those providers out there and would be happy to talk to you about your business.

Claus Lauter: Excellent. I appreciate that. All the links I said in the show notes, just to summarize, I have been in my own merchant story through a long, painful process on getting the packaging right. You can do a full shortcut by checking out the course and getting in touch with Phillip and be just [00:19:00] more successful in a shorter time.

Thanks so much for your time today. 

Phillip Akhzar: Thanks, Klaus. I appreciate it.