The Best Packaging is None At All

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Lush is one of the hottest retailers in London, a hip cosmetics company with an environmentally friendly repuation. So how does a company with that kind of reputation package its products without seeming wasteful? The answer is, it simply doesn't. So reports Marketplace, the public radio program. "Constantine has waged a long campaign to persuade other manufacturers to eliminate their packaging as far as possible," reporter Stephen Beard says.

Of course, there are many perfectly good reasons to package a product like cosmetics, as the radio report notes. Companies rely on packaging to keep products in good condition and free from tampering at every point along the supply chain. They also use packaging design to make their goods stand out on the retail shelf.

But Lush founder Mark Constantine says you can give up those benefits and gain new ones. Namely: you save money. In cosmetics, packaging can account for up to 75 percent of a company's unit costs. By doing without, Lush can spend more on raw materials and still charge affordable prices.

What trade-offs must Lush make for this to work? First, it sells its products only though its own stores. To date, it has 500 of them across the U.K. Constantine argues that the scent created by unpackaged cosmetics is so pleasant that it draws in customers. The company also maintains very short supply chains to ensure that its unpackaged goods are not damaged in transit. Short supply chains are, Constantine notes, good for the environment as well.

Lush's packaging asceticism is not for everybody, but as more and more companies look for ways to establish and tout their green credentials, the cosmetics maker provides an interesting model.

Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman