What should I ask about a packaging supplier’s minimum order and custom die inventory?

Custom dies are tooling, and tooling is often paid for by one party and held by another. Ask for a list of every die tied to the business, which customer it serves, who paid for it and where it sits. If the supplier holds it, find out whether you can retrieve it and what the supplier would ask to hand it over.

Condition matters. Ask when each die was last used, whether it needs repair, and who bears the cost. An old die that no longer cuts cleanly is an expense waiting to happen. On minimums, ask how the supplier arrived at them and how often they move. A supplier that raises minimums when your volumes dip can squeeze a small business. Ask whether smaller runs are possible at a different price, and whether a second supplier could make the same box. Photograph or sketch the layout of the storage area and note which jobs each die serves. A buyer should be able to find any tool within minutes and know which customer will be affected if it is damaged or goes missing.

Check how much cash is tied up in boxes ordered to meet a minimum and still sitting on shelves. Your accountant can tell you how that stock is carried in the books, and your lawyer can read the supplier terms.

Key takeaways

• Get a die list showing owner, location, condition and who pays for storage.
• Ask how minimum orders are set and how often they have changed.
• Find out whether a second supplier could make the same boxes.