Why Packaging Is Ecommerce’s Most Underrated Marketing Channel—and How Brands Can Use It

Table of Contents

1. Key Highlights
2. Introduction
3. Packaging as a Marketing Asset: The Argument for 100% Open Rate
4. The Procurement Problem: Why Packaging Remains "Stone Age"
5. Turning Unboxing into a Repeatable Growth Lever
6. Real-World Examples: From Independent Makers to Category Leaders
7. Building with Customer Feedback: How Early Outreach Shapes Product-Market Fit
8. Reframing Packaging as Marketing Spend, Not Overhead
9. Overcoming Minimum Orders: Sampling and Modular Solutions
10. Protecting the Product While Promoting the Brand
11. Automation, AI, and the Future of Packaging Procurement
12. Aligning Incentives: A Business That Benefits When Customers Grow
13. Sustainability: Reconciling Branding with Environmental Responsibility
14. Practical Roadmap: How Brands Should Start Upgrading Packaging Today
15. Common Pitfalls and How to Avoid Them
16. Measuring Impact: What to Track Beyond Subjective Praise
17. Pricing Strategies and Budgeting Packaging as Marketing
18. How Design Choices Affect Perception
19. The Role of Inserts: Small Touches, Big Returns
20. Scaling Packaging Without Losing Brand Intimacy
21. Competitive Advantage: Why Startups Should Chase "Unsexy" Problems
22. Legal and Regulatory Considerations
23. Preparing for the Next Wave: Integration with Fulfillment and Commerce Platforms
24. Final Thought on Opportunity Cost

Key Highlights

• Packaging offers a guaranteed 100% open rate and functions as a high-ROI marketing touchpoint that drives repeat purchases, social sharing, and brand differentiation.
• Modernizing procurement, lowering minimums, and treating packaging as marketing (not an operational cost) unlock growth for businesses of all sizes; automation and AI will further personalize recommendations.
• Founders should pursue "unsexy" but universal problems—packaging is one such opportunity where intention and simple systems yield measurable returns.

Introduction

Every product that ships provides a single, unavoidable marketing moment: the unboxing. While hundreds of startups chase flashy channels, countless brands still send goods in plain, functional boxes that vanish without a trace. That squandered impression represents both a lost revenue lever and a missed chance to deepen customer relationships.

Phillip Akhzar built Arka by recognizing packaging as this overlooked opportunity. His experience at Boeing and at a small startup revealed an antiquated procurement process and a blind spot in merchants’ marketing strategies. Arka’s approach reframes packaging from a line item on the operations sheet into a deliberate piece of brand communication. The result: improved customer retention, more social word-of-mouth, and a channel that scales as businesses grow.

The following analysis explains why packaging matters, how to treat it strategically, and practical steps brands can take to turn every shipment into a repeatable marketing win.

Packaging as a Marketing Asset: The Argument for 100% Open Rate

Email open rates, social impressions, and ad click-throughs fluctuate and compete for attention. Packaging stands apart because it reaches customers when they’re actively receiving their purchase. That moment carries unique psychological power.

First impressions shape perception. The tactile experience—weight, texture, color, printed messaging—signals whether the product was worth the purchase. Customers use packaging to validate their choice and often share visually striking packages on social channels. A memorable box can extend the brand experience beyond the product and into the customer’s broader social network.

Second, packaging affects retention. Merchants who switch from unbranded to custom packaging frequently observe higher repeat purchase rates. The unboxing ritual becomes a brand touchpoint that reinforces identity and creates habit. Brands that make this investment are more likely to show up in customers’ memory at the moment they consider repurchasing.

Third, packaging reduces friction in the customer journey. Thoughtful inserts—clear return instructions, care tips, and discount codes—can reduce support calls and nudge buyers toward referral behaviors. A single well-designed insert can convert a transactional buyer into a repeat customer.

Treating packaging as marketing changes procurement decisions. Rather than buying the cheapest box that fits the product, brands design packaging to achieve measurable outcomes: lower churn, higher lifetime value, and organic social reach.

The Procurement Problem: Why Packaging Remains "Stone Age"

Procurement for packaging often mirrors a relic of older supply chains. Warehouses still rely on manual counts and static catalogs. Large buyers may have dedicated procurement teams, but smaller merchants face opaque suppliers, high minimum order quantities, and limited design feedback.

This mismatch costs brands in two ways. Operationally, it creates inefficiencies and inventory risk. Strategically, it discourages experimentation. When the smallest viable order is hundreds or thousands of units, a nascent beauty brand or subscription maker cannot test how a branded box moves the needle.

Phillip observed this firsthand. At Boeing, procurement processes prioritized scale and reliability. At iCracked, resource constraints demanded quick, cost-effective solutions. Both contexts underscored the same truth: packaging procurement had not kept pace with the needs of modern commerce.

Solving procurement involves three things:

• Lowering the friction to try custom packaging (samples, low minimums).
• Making lead times and inventory transparent.
• Integrating packaging decisions with marketing analytics so results are tracked, not assumed.

Arka’s model—offering free samples and the ability to order as few as ten units—addresses these frictions and encourages brands to experiment.

Turning Unboxing into a Repeatable Growth Lever

A package can be more than protection for goods; it can be a conversion engine. The transformation requires treating packaging like any other marketing channel: set hypotheses, run tests, measure outcomes.

Hypotheses to test

• Does branded packaging increase repeat purchase rate within 90 days?
• Does a specific insert improve referral codes used during checkout?
• Do customers who receive premium packaging share more on social platforms?

Test design and tactics

• A/B testing: Ship half of orders in plain packaging and half in custom packaging for a controlled period. Monitor repeat purchases, customer reviews, and social mentions.
• Inclusion of trackable incentives: Use unique discount codes or QR codes on inserts to trace behavior back to the unboxing moment.
• Social hooks: Add prompts that encourage customers to share (e.g., “Share your unboxing with #BrandMoment for a chance to be featured”).

KPIs to monitor

• Repeat purchase rate and time-to-second-purchase.
• Social mentions and hashtag use.
• Customer satisfaction and NPS related to packaging.
• Support ticket volume for damage and returns (packaging should protect as well as promote).

Brands that approach packaging like a channel—testing small, measuring rigorously—avoid costly rollouts that underperform and scale what demonstrably works.

Real-World Examples: From Independent Makers to Category Leaders

Arka’s customer examples illustrate practical gains. Small brands that previously shipped in nondescript boxes began seeing consistent increases in repeat orders when they switched to branded packaging. The combination of lower minimums and sample programs removed the entry barriers.

Other well-known brands demonstrate packaging’s power at scale. Companies such as Apple and Glossier made packaging part of the product experience, helping to cement brand identity and encourage social sharing. Unboxing videos for carefully designed packages become free advertising. While these companies invest heavily in design, the principle applies at every scale: packaging that reflects the product’s promise closes the gap between expectation and experience.

A local bakery or niche apparel brand can achieve similar effects with a thoughtful box and a personalized insert—no million-dollar design budget required. The design brief should answer: how do I feel after opening this box? If the answer aligns with the brand promise, the packaging is doing its job.

Building with Customer Feedback: How Early Outreach Shapes Product-Market Fit

“Build it and they will come” does not apply to most tangible product solutions. Early, direct customer outreach gives founders the rapid, actionable intelligence necessary to refine product offerings.

Arka’s early growth relied on door-to-door outreach and a willingness to waive fees for initial customers. Those first conversations revealed real pain points: high minimum orders, long lead times, and the inability to get a true sense of materials without samples. Addressing those problems created an offering that resonated.

Startups should prioritize a similar path:

• Talk to the buyer, the fulfillment manager, and the end-customer where possible.
• Ship prototypes and incorporate feedback into production tolerances, graphic design specs, and structural engineering (for protective inserts).
• Offer trial programs that remove the financial risk of testing.

These steps accelerate product-market fit and generate early advocates who spread the word organically.

Reframing Packaging as Marketing Spend, Not Overhead

Accounts often categorize packaging as an operational line item. That framing obscures its multi-dimensional return. When a company channels a portion of marketing budget into packaging, the outcome can be threefold: increased retention, organic word-of-mouth, and higher perceived product value, which can justify price premiums.

How to make the case internally:

• Present packaging test results alongside traditional marketing campaigns. Compare cost-per-acquisition (CPA) and lifetime value (LTV) metrics.
• Use incremental lift analysis to estimate additional revenue driven by packaging changes.
• Highlight qualitative outcomes such as better unboxing videos, improved unboxing-related reviews, and stronger brand consistency across touchpoints.

Brands that shift budgeting accordingly free themselves to invest in higher-quality materials, printed messaging, and premium inserts that amplify the post-purchase experience.

Overcoming Minimum Orders: Sampling and Modular Solutions

Historically, the smallest unit of purchase for custom boxes deterred small merchants. Modern manufacturers and platforms have created pragmatic solutions to this problem.

Sample programs

• Free or subsidized samples let merchants feel the substrates and print quality before committing.
• Sample kits can include multiple dielines and material swatches to compare rigid boxes, corrugated options, and padded mailers.

Modular designs and inserts

• Designing boxes with modular inserts allows the same outer box to be used for multiple SKUs, lowering inventory burden.
• Use of adjustable or foldable inserts simplifies fulfillment while maintaining a premium feel.

On-demand printing and digital proofs reduce lead times, enabling smaller runs at reasonable cost. When brands combine modular design with analytics, they can iterate quickly without large capital outlays.

Protecting the Product While Promoting the Brand

Marketing-focused packaging must still do its primary job: protecting the product. Damage in transit undermines all brand-building efforts. Packagers need to balance aesthetics with protective engineering.

Key considerations for protective packaging:

• Choose the right grade of corrugation for weight and stacking needs.
• Use inserts designed to absorb shock or immobilize items during transit.
• Test packages under simulated transit conditions to understand failure modes.

Brands that ignore protection risk negative reviews and returns that outweigh any marketing upside. The packaging brief should specify margins for protection as clearly as it specifies branding goals.

Automation, AI, and the Future of Packaging Procurement

Procurement and discovery are moving from catalogs toward intelligent recommendations. Phillip envisions a future where a simple chat lets a merchant describe what they ship and receive a tailored packaging solution. AI will accelerate discovery, design, and sourcing in several ways:

• Recommendation engines: Based on SKU dimensions, fragility, and brand voice, systems can recommend substrates, dielines, and insert designs.
• Automated quoting: Real-time cost comparisons from multiple vendors reduce lead time and increase transparency.
• Design automation: Generative tools can present mockups with branding applied to dielines, accelerating creative signoff.
• Inventory optimization: Predictive models forecast packaging needs based on sales trends, reducing overstock.

These advances reduce friction, enabling more brands to treat packaging as an intentional growth tool rather than a procurement headache.

Aligning Incentives: A Business That Benefits When Customers Grow

Arka’s approach aligns its revenue with customer success. If customers ship more, they purchase more packaging. This alignment shapes product recommendations and long-term partnerships.

Practical tactics that align incentives:

• Tiered pricing aligned to growth: offer incentives that reward increased volume, fostering loyalty.
• Educational content: recommend packaging changes that reduce damage or packaging waste, increasing customer satisfaction and thus order cadence.
• Honest recommendations: for new businesses, suggest cost-effective solutions that protect margins. Recommending a free USPS box initially builds trust for future upsells.

This model works because it treats the customer’s success as a direct driver of the supplier’s revenue. Brands that adopt similar practices—whether software, services, or physical goods—create durable relationships and predictable expansion.

Sustainability: Reconciling Branding with Environmental Responsibility

Consumers increasingly evaluate packaging on sustainability as well as aesthetics. Designers must balance brand expression with material choice and circularity.

Options and practices that reduce environmental impact:

• Use recycled and recyclable materials for outer cartons and inserts.
• Reduce air by right-sizing packages or using void-fill alternatives that are compostable or recyclable.
• Communicate sustainably: include clear recycling instructions and explain material choices on an insert.

Be careful with greenwashing. Claims must be specific and actionable—“made with 30% post-consumer content” is more credible than vague language. Sustainable choices often require upfront investment but can drive loyalty among environmentally conscious consumers.

Practical Roadmap: How Brands Should Start Upgrading Packaging Today

For merchants ready to act, here is a pragmatic step-by-step plan.

1. Audit the current experience
   • Order your own product and document the full unboxing journey.
   • Track touchpoints: protection, first impression, messaging, returns information.
2. Set measurable goals
   • Choose two KPIs: repeat purchase rate and social mentions, for example.
   • Define a test period and sample size.
3. Design low-risk experiments
   • Create a sample kit and run a controlled A/B test between plain and branded packaging.
   • Use unique codes and UTM parameters to track attribution.
4. Prioritize protection and cost
   • Verify that new packaging protects the product under transit conditions.
   • Model the cost per order and the impact on gross margin.
5. Use minimal viable customization
   • Start with branded tape, tissue paper, or a single printed insert before committing to full custom boxes.
   • Iterate based on feedback.
6. Monitor results and scale
   • If the branded cohort shows uplift, scale across SKUs with modular designs.
   • Adjust procurement to balance inventory and lead times.
7. Communicate sustainability
   • If you change materials, explain the reasons to customers and include recycling instructions.

This sequence minimizes early risk while enabling brands to learn what resonates with their audience.

Common Pitfalls and How to Avoid Them

• Treating packaging as an afterthought: Integrate packaging decisions into product launches and marketing planning.
• Obsessing over aesthetics at the expense of protection: Test packages under real-world conditions.
• Ignoring measurement: Without metrics, packaging investments are faith-based.
• Over-design: Excessive packaging can increase costs and waste; strike a balance that reflects brand value.

Avoid these errors by combining design intent with operational rigor and clear measurement.

Measuring Impact: What to Track Beyond Subjective Praise

Empirical measurement legitimizes packaging investments. The following metrics will help you attribute outcome to the packaging change:

Primary metrics

• Repeat purchase rate (30/60/90 day windows).
• Time to next purchase.
• Average order value among returning customers.

Secondary metrics

• Redemption rates for unboxing-specific promo codes.
• Volume of user-generated content and traffic from shared posts.
• Decrease in support tickets related to confusion about returns or usage.

Operational metrics

• Cost per order for packaging, including inserts and protective materials.
• Damage and return rates.
• Inventory turnover for packaging SKUs.

Collect both quantitative and qualitative feedback. Customer comments and reviews often reveal emotional responses that numbers alone do not capture.

Pricing Strategies and Budgeting Packaging as Marketing

Approach packaging budgets the way marketing budgets get allocated: with hypotheses and scale. Allocate a test budget, measure returns, then reallocate based on outcomes.

Some budgeting tips:

• Start by reallocating a small percentage of your digital marketing budget to packaging experiments.
• Model LTV improvements required to break even on packaging spend.
• Consider packaging as a long-term investment; benefits compound as repeat purchases increase.

If a modest increase in packaging cost produces a disproportionate lift in repeat purchase behavior, the investment scales well across the business.

How Design Choices Affect Perception

Design is not merely decoration; it signals value, care, and brand personality. Key elements that influence perception include:

• Material quality: Thick cardstock and textured papers convey luxury; kraft and minimalist design suggest sustainability and craft.
• Color and typography: Colors and fonts must align with brand persona and legibility.
• Structural design: A well-engineered opening ritual enhances anticipation, while awkward flaps or difficult-to-open seals detract.
• Messaging: A short welcome note or simple care instructions humanize the brand.

Design decisions should align with target customer expectations. Premium consumers expect refinement; practical buyers prioritize usability and clear instructions.

The Role of Inserts: Small Touches, Big Returns

Inserts are inexpensive relative to the revenue they can drive. They serve multiple roles:

• Educational (care instructions, sizing guidance).
• Promotional (referral codes, discount for next purchase).
• Emotional (handwritten thank-you or story about the founder).

Best practices for inserts:

• Keep copy concise and actionable.
• Use a clear call-to-action with trackable codes.
• Design for scanning: include QR codes that lead to landing pages, review forms, or community pages.

A single well-crafted insert often yields a measurable uplift in customer engagement.

Scaling Packaging Without Losing Brand Intimacy

As brands grow, maintaining the personal feel of packaging requires systems. Automation and templates help preserve consistency.

Tactics to scale with fidelity:

• Create a brand packaging playbook with dielines, material specs, tone of voice, and messaging templates.
• Use modular elements that work across multiple SKUs.
• Automate customer emails tied to shipment status and post-delivery feedback that capture unboxing experiences.

Scale should not mean generic. Consistency and attention to small details keep the feeling of care intact.

Competitive Advantage: Why Startups Should Chase "Unsexy" Problems

Phillip framed the opportunity as an argument for unsexy categories. Founders who pursue overlooked, essential problems face less competition and build businesses with durable demand.

Packaging is universal—every physical product needs it. That universality produces stable, ongoing revenue for companies that solve procurement, design, and fulfillment problems for merchants. For founders seeking product-market fit with reliable TAM (total addressable market), targeting an infrastructure problem like packaging often yields faster traction than chasing the next hyped vertical.

Investors may initially undervalue such companies, but financials show steady returns when the product reduces friction and improves measurable merchant outcomes.

Legal and Regulatory Considerations

Packaging interacts with regulations around labeling, safety, and sustainability claims. Brands must ensure compliance where relevant.

Key considerations:

• Include required product information (ingredients, country of origin, safety warnings).
• Ensure recyclable or compostable claims meet established standards to avoid deceptive practices.
• For international shipments, verify customs and import labeling requirements.

Consult legal counsel or compliance experts for products in regulated categories (food, cosmetics, hazardous goods). Mistakes in labeling can produce fines, delays, or reputational damage.

Preparing for the Next Wave: Integration with Fulfillment and Commerce Platforms

Packaging choices intersect with fulfillment operations and commerce platforms. Integration matters for efficiency.

Integration points:

• SKU-based packaging selection in fulfillment software to reduce picking errors.
• Real-time inventory sync between packaging stock and order volumes to avoid stockouts.
• Analytics integration to attribute customer behavior to packaging cohorts.

Platforms that combine commerce data with packaging analytics create a closed loop: purchase insights inform packaging choices, and packaging outcomes inform inventory planning.

Final Thought on Opportunity Cost

Every shipment is either a wasted touchpoint or a brand-building opportunity. The difference lies in intention. A modest reallocation of focus and budget from traditional channels toward better packaging often produces outsized returns. The companies that act now will differentiate themselves by controlling the moment that follows purchase—the moment when customers validate their decision and decide whether to come back.

FAQ

Q: How expensive is it to test custom packaging for a small brand? A: Costs vary by size, materials, and print complexity. Start with low-cost tests: branded tissue paper, custom tape, or small-order inserts. Sample programs and short runs (as few as 10–50 units) are increasingly available. Model per-order cost versus expected lift in repeat purchases to evaluate ROI.

Q: What metrics prove packaging is working? A: Primary metrics include repeat purchase rate, time-to-second-purchase, and AOV among returning customers. Track secondary metrics like promo code redemptions tied to inserts, social mentions, and customer feedback specifically referencing packaging. Monitor damage rates and returns to ensure protective function.

Q: Won’t investing in packaging make products more expensive? A: Packaging can raise per-order cost, but it can increase perceived value and retention, which improves lifetime value and can offset initial expense. Use incremental testing to measure whether the uplift justifies the investment before committing to larger runs.

Q: How do you balance sustainability with premium presentation? A: Choose recycled or recyclable materials, right-size packaging to avoid air, and use compostable void-fill where needed. Communicate material choices transparently on an insert. Often, sustainable choices can be positioned as a brand value without sacrificing aesthetics.

Q: How quickly should a brand expect to see results from packaging changes? A: Expect early signals within one to three months: social mentions, customer comments, and immediate effects on repeat purchases may appear rapidly. Statistically significant changes to repeat purchase rates may require larger sample sizes and longer windows, so plan experiments with enough scale to detect meaningful differences.

Q: Are there regulatory risks with packaging claims? A: Yes. Avoid vague sustainability claims and ensure required labeling for regulated products is included. Verify compliance for international shipments. When in doubt, consult legal or compliance professionals.

Q: Can automation and AI really recommend the right packaging? A: AI can accelerate discovery by mapping product attributes to packaging options, suggesting dielines, and automating quotes. It reduces friction but should be combined with human validation for protective engineering and brand fit.

Q: What should founders consider if they want to build a packaging-focused business? A: Focus on solving procurement friction: offer low minimums, samples, clear lead times, and integrate measurement so customers can see ROI. Align incentives with customer growth and prioritize reliability in protection. Unsexy problems with universal demand often lead to stable, scalable businesses.

Q: How important is the unboxing ritual versus the product itself? A: The product quality must deliver on the experience. Packaging enhances perceived value and can accelerate retention, but it cannot substitute for a poor product. Packaging should complement a strong product offering to convert first-time buyers into loyal customers.