Packaging costs are usually high for one of five reasons: too many formats, packs that are too big for the band they ship in, loose fill compensating for poor fit, short uneconomic order runs, and damage being paid for somewhere other than the packaging budget. Only the fourth is visible on a packaging invoice.
The invoice is the wrong place to look
If packaging spend has crept up, the natural response is to examine the packaging invoices. That shows you what you bought and almost nothing about why.
The causes of high packaging cost are mostly structural - how many formats you hold, how well they fit, and what that does to carriage and damage. None of that appears on the invoice you are staring at.
Cause one: too many formats
Box ladders grow. A product arrives, nothing quite fits, a size is added, and nobody removes one. Each extra size carries stock, occupies bench and racking space, and adds a decision to every order.
Count your formats and the annual volume through each. The ones carrying almost nothing are pure cost. See packaging for fulfilment.
Cause two: packs that are too big
An oversized pack costs three times on the same order - material you did not need, fill to take up the gap, and volumetric carriage on the air.
Calculate the fill ratio on your highest-volume formats. Below about two thirds and there is real money there. See bespoke carton manufacture.
Cause three: fill compensating for fit
Void fill is a recurring cost in both material and bench time, and it is frequently treating a structural problem as a protective one.
If packers are using a lot of fill, the usual explanation is not that the product is fragile - it is that the box is too big. See protective packaging.
| Where people look | Where the cost usually is |
|---|---|
| Price per carton | Number of formats held |
| Supplier margin | Fill ratio and volumetric carriage |
| Annual spend total | Cost per order by format |
| The packaging invoice | The carriage invoice and the credits ledger |
Where the cost usually is, versus where people look.
Cause four: short, uneconomic runs
Printed and bespoke lines carry a setup spread across the run. Ordering short - usually because there is nowhere to store a full run - means paying a premium on every unit, permanently.
That is a storage constraint masquerading as a packaging price. packaging stockholding removes it.
Cause five: damage charged elsewhere
Damage is a packaging cost that appears in credits, replacements, carriage and customer service. Because none of those are coded as packaging, the packaging budget can look controlled while the operation is expensive.
Protection specified against the real failure mode usually reduces both the damage and the component count - see protective packaging.
Finding your own answer in an afternoon
- Count formats and the volume through each.
- Calculate fill ratios on the top three formats.
- Measure those formats against carrier band thresholds.
- Check order quantities against the supplier's quantity breaks.
- Pull the credits and replacements for a month and attribute them to formats.
Those five numbers will usually point directly at the cause. The structured version across all six cost areas is a packaging review.
The short version
- The packaging invoice shows what you bought, not why it costs so much.
- Too many formats, poor fit, fill compensating for fit, short runs, hidden damage.
- Calculate fill ratios on your top three formats.
- Short uneconomic runs are a storage constraint in disguise.
- Damage appears in credits and carriage, never in the packaging budget.
Frequently asked questions
Our packaging price per unit is competitive. Why is the total so high?
Usually because of how many formats you hold and how well they fit. Unit price is the smallest lever; fill ratio and format count are larger.
Should we change supplier?
Not first. A better price against the wrong specification buys the wrong thing more cheaply. Measure and specify, then go to market.
How do we know if we are over-specified?
Compare board grade and film gauge against the weight, the stack and the journey. Over-specified board is common and costs on every unit.
Is packaging cost really connected to carriage?
Closely. Pack dimensions determine volumetric weight and which band each order falls into, which recurs on every despatch.
Can you work out where our money is going?
Yes - that is what a packaging review does, across materials, storage, transport, labour, damage and waste.