How To Start Paper Bag Business
A lot of business opportunities are available out there that anyone can start no matter which part of the world you may reside in. Teenagers nowadays, especially in the African continent want to be a millionaire overnight but most of them fail to realize that everything in life has a process before achieving reasonable results. One of the processes to riches is starting your own business, and indeed a paper bag business rather than wishful thinking or even keeping a white-collar job.
That does not mean that starting a paper bag business or any business for that matter is easy, indeed it is not and if one is not very careful, it is easy to fall by the wayside within the first few months of starting your paper bag business. To be successful though you need to be determined, focused, and apply due diligence in everything you do to start and run a successful business. You may build a successful paper bag making business from scratch to become a first-class international phenomenon. If you harbor the ambition to start your paper bag making business, you have the right choice. By the way, why should you go into a paper bag making business?
In the first place, the market for the paper bag is huge and in this age, the plastic bag is falling out of use because of its threat to the environment leading to its ban by some States in the US. The market for the paper bag is increasing because it is a substitute to the plastic bag which usage is no longer favored, but more importantly, is eco-friendly, convenient, and relatively durable.
A Paper bag is a commodity that is commonly used by everyone but mainly by retail businesses. It has better benefits than its plastic counterpart; it is recyclable and doesn’t have any known negative effect on the environment. Paper bags are essential for commercial usage in every sphere, but the following areas of endeavor are commonly found to use paper bags:
- General purposes, for documents, personal items, and other related items.
- Departmental stores as shopping bags
- Supermarkets as shopping bags
- Body and footwear stores as shopping bags.
- Food stores to package food items.
- Pharmacy, to package drugs
- Gift shops to package gifts items.
- Open market to package items sold.
- Wine shops to package wines and other drinks.
- Bookshops to package books
- Advertising agencies as an advertising medium.
Industry overview
Though nylon bags cum polythene bags are greatly used, the vast majority of the people today choose to use paper bags for some obvious reasons already mentioned, hence the increasing use of paper bags. For these reasons, lots of investors as well as intending newbie are pitching their tent in this lucrative and promising paper bag industry.
Paper bag and cardboard packaging producers craft paper bags in various designs and sizes aimed at carrying numerous items procured from various outlets such as supermarkets, shopping malls, open markets, pharmacy stores, etc.
Not quite long ago, the market situation of the paper bag industry became relatively volatile, with the result that the demand for folding cartons and paper bags being the derived demand for consumer goods were affected. It follows that the national demand for consumer goods went down, also adversely affecting the revenue generated in the paper bag industry which also declined in the past few years.
The cardboard packaging and paper bag industry is a significant sector of the national economy in the European, Asian countries, and the US, and indeed most of the world economy. In the UK alone, for example, the Paper Bag and Cardboard Packaging industry generate upward of 4 million dollars every year from more than 483 big players in the industry up and down the United Kingdom.
In the UK also, the industry which employs over 26,885 people is projected by experts to grow at the annual rate of 1.5 percent per annum. Some of the biggest players in the industry that commands greater part of the market share include; Kappa UK Ltd, DS Smith Packaging Ltd, and SAICA Pack UK Ltd
By and large, with the decline in the use of plastic carrier bags the world over, the paper bag industry has gained the upper hand and now very profitable. Aspiring entrepreneurs are encouraged to come forward and set up their small or large scale businesses in the US, in the Asian countries, or elsewhere where raw-material and labor can be obtained at a cheap rate.
Why use a paper bag? (Marketing opportunities)
The Paper bag business is a worthwhile business opportunity, besides the profit element; it is supported by the “Go Green” campaign movement. The use of paper bags is increasing for the following reasons, among others.
- It is fashionable
- It is eco-friendly
- It is biodegradable
- It can be produced from waste papers
- It is reusable
- Its use cuts across religious, ethnic, and cultural boundaries..
- It is widely used as packaging materials in shopping malls and other personal use.
- It is used for gifting purposes
How To Start Paper Bag Business
With the growing use of paper bags and the gradual decline in the use of plastic bags, the market for the paper bag continues to expand. Consequently, aspiring entrepreneurs have a great opportunity now to make hay while the sunshine to launch a paper bag business. There is every reason to make a success of the business and in this article, we have laid bare all you need to know before going into the business. So have a good read!
The need for an in-depth analysis
As each business is unique, our analysis is for general consumption, so if you decide to set up a paper bag business, it is expected that you carry out a detailed feasibility study and market research before dabbling into the business. You need to have a first-hand report about the condition of the paper bag industry, the competition within the industry, the level of demand, the market composition, and what the economy portends of the future for the paper bag industry before you begin to commit your scarce resources.
Target market:
Your target market is going to fall within the fast-moving consumer goods (FMCG) organizations such as the following since they use bags – plastics or paper to package sold items.
- Supermarkets
- Electronic stores
- Departmental Stores
- Groceries Stores
- Pharmaceutical Stores
- Jewelry stores
- Book shops
- Boutiques
- Mobile phones and accessories stores
- Vegetable shops
- Stationery shops
- Snacks stores
- Sweet shops
- Grocery shops
- Meat/fish shops
- Open markets
- Textile shops fancy shops
The list is not exhaustive, but any conceivable unit of business selling anything that can be packaged is a potential market for your paper bag business.
If you are bemused about making up your mind concerning going into paper bag making company, make sure you consider the following important dynamics before making a decision:
Advantages of using a paper bag.
- Paper bags are complete in biodegradable; it is recyclable and reusable.
- Young children are not prone to suffocation when playing with paper bags.
- Many paper bags when being pressurized stand to the pressure and put up more weight than plastic bags.
Disadvantages of using paper bags
- Water dissolves paper bags, unlike their plastic counterpart.
- Paper bags cost more than plastic bags
- Paper bags are heavier and take more storage space than plastic bags.
Varieties of products that can be made;
As a paper bag manufacturing company, you can decide to produce one or a variety of bags for different uses. The most important thing to consider is the demand for the different bags available. Therefore both formal and informal research on the more profitable bags can be conducted before a decision is made on the bags to manufacture. The following types of bags are possible contenders as the range of products to produce and sell or buy them in large quantities and sell in smaller quantities..
- Producing customized paper bags
- Producing paper bags for food storage bags
- Producing paper bags for grocery bags
- Producing paper bags for merchandise bags
- Producing paper bags for trash bags
- Producing paper bags for packaging
- Producing non-corrugated cardboard boxes, cartons, and cases
Cost of paper bag making business
The total cost of making a paper bag differs and cannot be estimated with a reasonable amount of certainty but we can attempt to break-down assets needed for a paper bag factory. The factory will consist of the following items listed below and broken down into fixed and variable costs.
Fixed costs – these consist of costs that do not change with the level of output.
- Cost of roll feeding machine – fully automated or semi-automated.
- Handle rope making machine
- Lace fitting machine
- Paper cutting machine
- Eyelet punching machine
- Printing machine (optional)
- Cost of land and building – if you decide to build your factory
- Cost of rent/lease, if you decide not to acquire the factory.
Other different types of machinery used in paper bag production include the following:
- Printing Machines
- Roll Slitter Motorized Machines
- Testing Scale Machine
- Creasing machine
- Stereo press and stereo grinder
Variable costs:- these are costs that change with the level of activity.
- Raw-material – paper sheets and rolls
- Cost of hiring people to operate machines and others
- Maintenance costs
- Transportation costs
- Cost of promotion
- Other miscellaneous expenses
Tips when buying raw-materials for paper bag production:
When buying materials for paper bag production it is crucial to consider the following:
- The end use of the paper bag – is it going to be supplied to the supermarket or to be used for gift items.
- Consider also the color – brown or white or both and in what quantity.
- Be mindful of the paper quality since there are low-quality papers in the market
- Find out about the vendor whether a continuous supply can be guaranteed.
- Compare prices before placing orders
- Consider also delivery lead-time
- Consider machine capacity.
Design Patterns for paper bag printing.
As an aspiring paper bag entrepreneur, it is essential to know various design patterns of paper making to enable you to start on a sound footing. If you don’t have the needed knowledge, it makes sense to outsource it to a freelancer. You can do this by turning to a freelancer website such as upwork.com, freelancer.com, fiverr.com, etc., you are likely to get your design done at much a lower price than hiring a paper bag designer. All you have to do is the following:
- Enter “paper bag design” at upwork.com, to search a paper bag pattern.
- Look for the one suitable for your needs and place an order
- Engage the freelancer online for an interview about your paper bag pattern
- Mail a copy of the sketch or your client’s business logo to the freelancer
- Make available to the freelancer all that is necessary for the work to be done (the finished drawing will be delivered in about 5 days)
- Make payment in due time or as necessary.
You must make sure you provide all relevant information to the freelancer based on the interview previously held. It is about your demand for the designing pattern and/or describe your client’s demand and the fields in great detail and make sure it is well understood by the freelancer.
Making paper bags.
Paper bags can be made by two different methods: by hand manually and automatically. The use of hand to make the paper bag is slow, as you can guess, it takes time to produce a reasonable quantity. But if you are starting as a small scale business with very low capital, it is advisable to start low and have a plan to grow over time. On the other hand, if capital is not a problem after you have acquired the relevant knowledge, invest in the automatic machine for your paper bag business. It saves you time and energy, and if demand for your finished product is there, you are going to recoup your investment within the estimated pay-back period.
How to make a paper bag, by hand manually?
Paper bags can be made by hand and also automatically. To make a paper bag manually, the following are the basic raw materials:
- Paper sheets to be used for the bag
- Paper rolls to be used for the bag
- Colors and paints for decorative purposes.
- Eyelets to be fixed on the bag
- Laces and threads to be used to make the bag
- Decorative accessories and others
For the sake of knowledge, if you are aspiring to go into the production of paper bags by manual method, it is a good idea to have some knowledge of how the paper bag is produced, if you don’t have prior knowledge.
The paper bag is made from paper pulp, either by pressing it into flat sheets or rolls of paper and then the rolls of paper are sliced into sizes which are twice the needed height of the final product. These sheets cut into sizes are folded with two similar sides open are glued together. The process of gumming it together could be by either pressing the gummed sides together or by heating and then pressing.
To make a more complex design such as a flat-bottom, you just have to follow the process outlined above but you must apply a more complex fold at the bottom of the bag to make an oblong or square bag with an open top.
How to make a paper bag, by machine automatically?
After you have everything ready about acquiring the relevant machinery, paper materials, and other accessories, decide on the sizes of paper you want to make. Then set the machine to start work by pressing the power button. This is the summary of the automatic paper bag making by the use of an an automatic machine:
- Decide on the paper sizes
- Cut the paper into the required sizes
- Press the paper and sticking gum on the paper
- Print the specific information concerning the needs of the customer
- Fold, paste and shear the paper into paper bags
- Punch the paper and attach eyelets and strings.
- Package the paper bags either to be stacked in the warehouse or to be transported to the customer.
However, these steps are not a blueprint, it can differ with different machines, but the above are the basic steps when being operated automatically. You can use the fully automatic or semi-automatic machines, but in each case, the budget for full automatic machinery is higher.
Establish and promote your brand
Creating your uniqueness can boost your customers’ recognition and eventually trusting your business. For this reason, set up your website that can generate traffic and bringing in orders. By creating an account with the social media platforms, you can use links to direct traffic to your site. A business account with Facebook is a good example; also you must maintain an active account with Instagram and Twitter.
Another way of creating your uniqueness is by making an attractive logo that represents the picture of your business. To produce an attractive and professional logo, you can outsource it to a skilled freelancer or better still, to a designing organization.
Have handbills and flyers printed, and make sure they are distributed at relevant and related places at the slightest opportunity. Also, make sure you get noticed through your community forum by making a presentation on related subjects or writing in the community newsletter. You can also belong to the industry paper bag association and the association of small businesses.
Use also target email to reach your target market. Start by collecting mail addresses of relevant businesses such as supermarkets, departmental stores, shopping malls, gift shops, etc.
You must also turn to your network; connect to them as well as getting at people you know to reach people you don’t. Use relevant clubs or religious houses to reach people related to your target market.
Don’t hesitate to organize related events in your community and get your paper bag making business in the limelight. Write for websites that are frequently visited by your potential clients.
Marketing handmade and automatic made paper bags
Once you have produced a small quantity of paper bags, you can test market your new paper bags to have a feel of market acceptance. If accepted, you should be ready to market it, otherwise, you should go back to the drawing board and make relevant modifications.
With the market acceptance of your new handmade paper bag products, you can begin selling them. You can reach your potential customers through various channels such as:
- Direct marketing – those at home using the paper bag for gift items, however, limited they might be.
- Local stores within your area of business.
- Trade shows and exhibitions
- WhatsApp group and forums
- Facebook and Instagram groups and forums
- Your website and other e-commerce sites
- Open markets – offer explanations and demonstrations.
- Engage on roadshows, if budget permits.
- Offer some incentives to encourage the use of word of mouth publicity from loyal customers
- Position your banners and billboards in strategic positions within your area of operations
- Contact corporate organizations and stores by calling them up on the phone, and informing them of your new paper bags.
- Advertise your paper bag business in your official website and employ strategies that will help you pull traffic to the site
- Brand your official cars and trucks and make sure that all your staff members and management staff wear your branded shirt or cap during official hours and other relevant times.
- List your business on both online and local directories such as yellow pages.
Conclusion:
It must be stressed that you shouldn’t be carried away by the elaborate details laid bare in this article about starting a paper bag business and forget the obvious things concerning setting up your paper bag making business. These obvious concerns include the following:
- Choosing a catchy business name.
- Registering your paper bag; either as a sole proprietorship or LLC.
- Opening of a business bank account
- Applying and obtaining Tax Payer’s ID:
- Applying for business license and permit:
- Purchasing of Insurance for the business:
- Writing of business plan
- Drafting of Employee’s Handbook:
- Drafting of Contract Documents and other relevant Legal Documents:
- Graphic Designs and Printing of Packaging and Promotional Materials:
- Purchase of the Needed furniture, racks, shelves, and computers.
- Setting up an official website for the company:
- Health and Fire Safety Arrangement (License):
- Arrangement for the paper bag launching party planning:
- Decision fon the list of products that will be manufacturing:
- Creating a business relationship with suppliers of cardboard packing and paper bag making raw materials, key suppliers of paper bags and cardboard packing materials: