Use This Packaging Cost Calculator to Save on Shipping Costs

How to use our packaging cost calculator

Use the packaging cost calculator below to estimate costs for product packaging, including the following fixed and variable costs:

• Design
• Construction and labor
• Materials
• Packing components
• Shipping
• Storage  

The cost calculator is flexible enough to estimate the cost of different package materials and components of the total packaging cost. It can also show packaging costs for different configurations and review packaging as a percentage of product pricing. It allows you to see at-a-glance totals for each packaging type.

To download the packaging cost calculator: 

1. Click here to access the Google Sheets template.
2. Save a copy of the template to create your own product configurations and cost tracking.
3. Fill in the columns with estimates or quotes. Calculations will appear in the totals columns. 

Download the free tool: Packaging Cost Calculator

Do you need custom packaging?

Suppliers offer a lot of options for creating custom packaging. But before you begin making branding decisions on an expensive custom design, it’s important to know whether custom is the right move for your needs.

The first step to estimating and controlling packaging costs is knowing whether off-the-shelf packaging could work for your project. Understanding product sizes, specifications, value, categories, and markets can help you choose between prefab options and custom work. A cost calculator makes it easy to see how custom versus standardized varieties affect package presentation, quality, and shipment protection.

Answer the questions below to determine if custom packaging is the best choice for your needs:

What product type are you packaging? Packaging for different types and categories of products varies widely. Certain categories of products, such as cosmetics, foods, or age-restricted substances, may require packaging that meets regulations for tamper-proofing (such as a freshness seal), access restriction (such as child-proof lid systems), or food-grade presentation. Depending on the type of product and its shelf life, durability, sensitivity, or cost, there may not be an off-the-shelf packaging solution available. 

What are the product dimensions? Knowing the precise size of shipped items can help determine if standard packaging options are suitable or if custom sizing is necessary. Items that don’t fit into standard packaging sizes will need customization. Sizing considerations can also help streamline packaging into fewer types to avoid needing a separate package (and its associated design costs) for every product or purpose. Shippers will also want to account for display needs, such as hang-tag packaging for hanging presentations.

How much product protection do you need? Delicate items or products prone to damage may require customized protective packaging like thermal shrink wrap to maintain their condition in transit. Other protective options include waterproofing, insulation, or security seals for perishable or temperature-sensitive items. 

Do you need custom graphic design? Custom packaging offers opportunities for unique branding, which can elevate customer experience and brand recognition. If the packaged product is of high value, a custom design will enhance the product’s presentation quality and improve customer experience. 

What is your product volume for each packaging type? Volume pricing makes custom packaging more cost-effective by providing volume-based discounts. If you ship a high quantity of items in a specific package type, custom packaging might be a more affordable option.

What shipping requirements do you have? Some packaging (for instance, a display box for a bespoke snack subscription) can double as a shipping container for certain products. In these cases, the design must meet dimensional requirements for the shipping service used. If shipping internationally, remember different countries have various regulations and standards that call for custom packaging. Understanding how (and where) packaging will be used can determine the level of packaging needs.

What are your sustainability concerns? Many customers prefer using brands with sustainable practices. Custom designs can incorporate eco-friendly materials and processes if sustainability is a priority. In some cases, eco-friendly packaging may lower the cost of packing materials.

What is your design and materials budget? Understanding financial constraints can help you tailor a custom packaging solution to meet your needs and spending requirements. With a clear understanding of packaging project requirements and budgets, you can seek high-quality suppliers to balance presentation standards, regulations, and costs.

By answering the above questions, product manufacturers, retailers, and shippers can better assess the need for custom packaging solutions that meet product needs and enhance the brand.

Tool

Packaging Cost Calculator

Shipping and materials purchases can make your indirect procurement costs creep up. Plan your packaging costs better with our Packaging Cost Calculator.

Download the tool

How to quickly estimate your cost for packaging

If you’re trying to get a feel for the cost of packaging an item, this formula will give you a basic idea: 

Packaging Cost per Unit = (Cost of Packaging Materials) / (Number of Units)

This simple formula doesn’t factor in considerations like design fees or volume discounting, but it can provide a good starting point for understanding how much packaging could cost for a set number of units. It provides a place to start when establishing a budget or working on product marketing.

Fixed and variable costs for packaging

Packaging quotes have several fixed and variable costs for the total price per packaging unit. For a more detailed cost assessment, you must look at the factors that make up bottom-line per-unit pricing. Some of these, like design services, stay the same regardless of order value, print run size, or purchase volume. 

Variable costs, like materials selection, labor, shipping, and assembly, are directly tied to order levels. Both types of costs influence the overall expense of packaging products. Understanding the balance between fixed and variable costs helps businesses optimize their packaging strategies while maintaining efficiency and sustainability.

Fixed Costs

Structural design and prototyping: Physical package design involves creating the package's physical layout and producing initial models for testing. These costs remain constant regardless of the number of units ordered. They represent essential investments in developing a full packaging design solution tailored to specific product needs.

Graphic design and branding: Graphic design and branding are fixed costs when creating a new package type or configuration. The design lays out the visual elements of packaging, like logos and color schemes, as they appear on the package. These aspects are essential for creating a brand identity. They are considered a fixed, upfront investment.

Setup costs for printing and tooling: Printers must set up printing and tooling equipment for each custom print job. Setup costs defray the expenses associated with preparing machines and creating tools necessary for producing custom work. These upfront investments are fixed, meaning they do not fluctuate with the quantity produced. Accounting for setup costs helps ensure each unit maintains uniform quality and appearance. 

Variable Costs

Cost of raw materials: Construction components of packaging, including cardboard, plastic, and ink, are necessary for packaging development. These materials represent a significant variable expense. Material costs fluctuate based on market prices and the quantity of materials required for production, making budgeting for them unpredictable.

Labor costs for assembly and packaging: These are wages paid to workers for assembling and packaging products. This variable cost is influenced by the complexity of the packaging process, the amount of labor required, and prevailing wage rates. Labor can significantly affect the total cost and varies with the scale of operations.

Shipping and handling charges for materials: Depending on supplier agreements and volume, transporting materials for packaging production, you may have to pay to transport materials to your warehouse or location for use. These expenses vary with distance, shipment volume, and speed, directly impacting costs. Efficient logistics planning can mitigate these variable costs. Lead times and processing speed may also figure into the total cost of purchasing package components.

Volume discounts: Many suppliers offer price reductions when purchasing large quantities. For packaging, this means the cost per unit decreases as the quantity ordered increases, allowing businesses to save money on bulk orders. This pricing strategy can significantly lower the overall cost for companies requiring large-scale packaging solutions.Packaging delivery costs: These are expenses linked to transporting finished goods from facilities to their final destination. Delivery costs vary based on distance, volume, and transportation method, making them less predictable than fixed costs.

How much should small to midsize businesses spend on packaging?

Many industry sources say businesses should estimate packaging costs as a percentage of the item's per-unit cost. While some general sources reference percentages between one and 10 percent, this general guideline doesn’t accurately account for factors like item value, industry, and special protection requirements (such as waterproofing, spoilage control, or temperature protection). The packaging cost calculator helps you consider all these factors when planning a packaging project or design.

Obviously, the more you save on packaging costs and product shipping, the higher your profit margins. Managing the total cost of packaging and shipping can help maximize returns and fund critical growth.

There are a few cost-effective ways to reduce the cost of materials when designing packaging, including choosing standardized packaging and lightweight supplies. 

• Pre-set box styles and standardized packaging may be an option for products of a certain category, value, or durability. Readily available standardized packaging options can provide adequate product protection in these cases. They also offer opportunities to apply branding in a more cost-effective format. Consider using some standard elements when you calculate your total cost for packaging. Blending standardized and custom details can make shipping supplies more affordable per package.
• Lighter packaging materials, like “clamshell” molded plastic enclosures, can reduce packaging costs. You can also pack items with lighter materials such as air balloons and biodegradable "peanuts." Using light, resilient, and cost-effective materials is called “lightweighting.” It saves on packaging fees as well as shipping costs. It may also have a positive impact on the environment and can attract customers who value environmentally friendly practices in their brand selection.

How Order.co makes recurring expenses easier

Packaging materials have a lot of price variability, but there are ways to save money and ensure a high-quality presentation and customer experience. The ability to estimate costs across different vendors helps companies save money on packaging products. 

Order.co gives businesses access to high-quality packaging vendors so they can find the packaging materials they need. The platform makes reordering popular consumables like shipping components quicker and easier with curated catalogs. Businesses can also use Order.co to work with any vendor they already know and love. It also has easy reorder features to help you find alternatives if your usual vendor is running low. 

The Order.co platform also makes AP processes more manageable for all purchases and recurring payments. With automatic purchase order processing, automated approval workflows, order reconciliation, and automatic general ledger (GL) coding, teams can leave manual processing and uncertainty behind. Order.co allows you to save time on invoice processing by consolidating 100s of invoices into one monthly bill.

Request your copy of the packaging cost calculator today. You'll get the full picture of your packaging cost and needs, plus the ability to easily calculate and track packaging spend — all in one place.