If you are getting ready to create your next point-of-purchase display, be sure to consider the merits of making it a knock-down display. In this blog, we’ll show you how you can save nearly 50% on freight for some knock-down displays. Knock-down displays are not the right answer for every situation, but in many cases you can save money by designing a display to be knock-down or “KD” as we say in the industry.
The advantages of making a retail display knock-down are greater when the POP display is being manufactured overseas, but there can be meaningful savings associated with shipping and storage even for domestically manufactured displays. So when should you consider making a display knock-down and how will a knock-down design impact the economics of your display program?
There are a number of factors to consider in determining whether your display is a good candidate for a knock-down design, including:
- Is the display being manufactured overseas? If so, knock-down designs are worthy of greater consideration because the more displays you can fit in a container, the more money you will save. Ocean freight can be expensive so even a small reduction in your box size can add up to a decent chunk of change. Of course, you can also save money in shipping and storage if you make your display domestically, but if you know you will be making it overseas, it is definitely worth the time to consider the benefits of making the display knock-down.
- Will you be shipping a lot of air? If you were to make your display fully assembled, would there be a lot of open space in the box? Consider, for example, a 4-shelf floor display with 14” between each shelf or a wire dump bin. These are good candidates for knock-down designs because of there would be so much “air” or wasted space in the box if the displays were designed as assembled units.
- Will the display parts nest well? By nesting we mean fit together relatively tightly in a box. The more the parts lend themselves to efficient nesting, the stronger your argument is to consider a knock-down design and the more money you will save. There are a lot of tricks you can take advantage of to make the parts of your display nest more efficiently so make sure you are working with a display provider who has a lot of experience manufacturing overseas and knows how to make parts nest in the most efficient way possible.
- Can a knock-down design ensure stability? If you are thinking about a knock-down design, make sure it can be designed so that it meets your stability requirements. The last thing you want to do is save a few bucks on a knock-down design only to have it thrown out by the retailers because it is wobbly or unsafe.
- Can it be assembled relatively easily? If you have ever put together a piece of furniture you bought from IKEA, you’ll think carefully about the importance of simple assembly. Think about who will be assembling the unit in the field, how long it is likely to take, and what skill level is required for assembly. If a display takes longer than 15-20 minutes to assemble, you might want to consider making the design “partially assembled.” Be sure your display provider includes assembly instructions and the tools required for assembly in the box, and make assembly as intuitive as possible since most people don’t bother reading instructions.
So once you have evaluated the above questions, what can you expect in terms of bottom line savings from a knock-down display? Let’s assume you are a product manufacturer and you have convinced the retailer to assemble your display in the store at no cost to you. Let’s also assume that the manufacturing cost of a fully assembled display and a knock-down display are about the same, which we generally find to be the case for most displays. Then, the main savings you can expect will come from ocean freight and domestic ground shipping.
Let’s look at the freight savings for 2 simple examples in which RICH LTD. customers came to us with completely welded designs, and we redesigned the displays to be knock-down. The first example is the completely welded 2-tiered wire counter spinning incense rack pictured below.
We redesigned the rack as a knock-down display with 2 independently spinning tiers. As you can see from the pictures below, the new design is comparable after assembly (which takes about 30 seconds), and the display knocks down really efficiently.
The original box size of the completely welded unit was 25”x11”x11”, and it weighed 2 lbs. The box size of the redesigned knock-down unit was 12.5”x12.5”x2.5” and also weighed 2 lbs. What that means is the new box size only consumed 13% of the cubic volume as the original box size so the old box was almost 10 times as big. Rather than being able to fit 1113 units on a 40 ft. container with the completely welded design, we could fit 9445 units with the knock-down design. The cost of ocean freight went from $4.31 per unit to $.51 per unit which is a savings of $3.80.
In addition, the knock-down design saved money in domestic ground shipping. We did a 5-city shipping analysis that showed the average cost of shipping the completely welded display was $12.02 per unit compared to the average cost of shipping the knock-down version which was $7.77. This is an average shipping savings of $4.25 or more than $35%. Therefore, the combined savings of ocean freight and domestic freight were $8.05 per unit or 49% compared to the original design.
A second example is changing from a completed welded 2-shelf wire counter rack to a fold-out knock-down wire rack with removable shelves. The welded design is shown on the left below. The knock-down design with knock-down parts called out is shown on the right below.
The box size of the knock-down unit was only 20% as large as the box size of the welded unit. Since 5 times as many knock-down units can fit on a 40 ft. container, the per unit ocean freight savings is $2.80, a 78% savings. And, just like the example of the incense rack, the significant reduction in box size translates into meaning savings in domestic ground transportation, not to mention storage savings. Our freight analysis showed an average savings of $2.09 per unit or 19% on domestic ground transportation. Total ocean freight and domestic ground transportation amounted to $4.89 (a 33% savings) which was very significant relative to the cost of the unit.
Knock-down designs are not the right answer for every point-of-purchase display, but in cases where they make sense, the savings can have a sizable impact on a display program’s economics.
Jim Hollen is the owner and President of RICH LTD. (www.richltd.com), a 35+ year-old California-based point-of-purchase display, retail store fixture, and merchandising solutions firm which has been named among the Top 50 U.S. POP display companies for 9 consecutive years. A former management consultant with McKinsey & Co. and graduate of Stanford Business School, Jim Hollen has served more than 3000 brands and retailers over more than 20 years and has authored nearly 500 blogs and e-Books on a wide range of topics related to POP displays, store fixtures, and retail merchandising.
Jim has been to China more than 50 times and has worked directly with more than 30 factories in Asia across a broad range of material categories, including metal, wood, acrylic, injection molded and vacuum formed plastic, corrugated, glass, LED lighting, digital media player, and more. Jim Hollen also oversees RICH LTD.’s domestic manufacturing operation and has experience manufacturing, sourcing, and importing from numerous Asian countries as well as Vietnam and Mexico.
His experience working with brands and retailers spans more than 25 industries such as food and beverage, apparel, consumer electronics, cosmetics/beauty, sporting goods, automotive, pet, gifts and souvenirs, toys, wine and spirits, home improvement, jewelry, eyewear, footwear, consumer products, mass market retail, specialty retail, convenience stores, and numerous other product/retailer categories.