There is no other option but to invest in custom boxes. Prints give them a power to speak, materials allow them to protect products, and add-ons make them pleasant. So if you spend on printed custom boxes with logos and other essential elements, you are definitely at a profit.
Stay here in this post! Guess what? We are going to share a secret to help you save more money. Yes, there are hundreds of packaging service providers selling custom packaging at higher prices. If you are worried about how to reduce packaging costs by eliminating extra charges, we are here to help.
In this post, we make you an expert packaging cost estimator. It means before even ringing an expert’s phone, you would know the total packaging cost on your own. Let’s get started!
What is The Packaging Cost?
Before delving into the calculation of total custom packaging cost, it’s important to understand what packaging cost is. Packaging cost refers to all the expenses we incur in producing a finished box. It includes material, printing, labor, manufacturing, and overhead costs. In many cases, you need to calculate shipping costs, but on our platform you don’t need to add them to the total costs. Lucky you!
The Quality of Your Box Defines Its Cost!
The pricing of boxes varies significantly based on the quality of the material used. It also influences the strength and functioning of the crafted boxes. Here is a brief description telling how the pricing changes with the quality:
Low-quality boxes:
These boxes are usually made with thick cardboard and other materials. Single-walled and thin box material costs less.
Medium quality boxes:
Medium-quality boxes offer a balance between cost and strength. Often made from double-walled paper stock, these boxes are strong and economical.
High-range custom packaging:
Often made with premium, high-quality materials, high-grade boxes are expensive. They are unparalleled in strength and a bit high in pricing. However, the great outlook and wonderful strength justify this cost. Premium boxes, such as rigid and display boxes, are priced competitively compared to the sales boosts they generate.
Cost of Packaging- Know Everything About The Variables:
You can’t get the product packaging at the same rates year-round, worldwide. Yes, this is because there are some variations we all need to bear, which affect the overall packaging cost. Costs are usually of two types: fixed and variable.
Fixed Cost:
It is the cost of box manufacturers included in the total cost, no matter how many units you order. For example, machinery setup cost, printing plate cost, mould cost, and cost of rented facilities.
Variable Cost:
Variable cost is the fraction of total packaging cost that varies significantly. Examples include paper and material costs, hourly production wages, shipping costs, and add-on costs.
Step-by-Step Packaging Cost Estimation:
Material Cost:
The cost of packaging is largely determined by the material you choose. At Pack Role, you can choose from a wide variety of materials with varying costs. The popular picks include:
Average Cost of Cardboard Material these days:
The cost of cardboard per unit depends on its quality. Generally, the cardboard is sold in the following ways:
- Single-walled cost of cardboard per unit (per square feet)= $0.20- $ 0.50
- Cost per 1000 square feet = $ 100-200
- Cost per ton = $ 500- $ 800
Average Cost of Corrugated Material (These Days):
The cost of corrugated paper stock also varies by region. However, on average, you can take it into consideration.
- Cost per unit (per square meter) = $0.15 – $0.35
- Cost per 1000 square feet= $80 – $160
- Cost per ton = $400 – $600
Average Cost of Kraft Paper Stock (These Days):
- Cost per unit (per square meter): $0.10 – $0.30
- Cost per 1000 square feet: $50 – $150
- Cost per ton: $400 – $700
Average Cost of Double-Wall Cardboard (These Days):
- Cost per unit (per square meter): $0.40 – $0.70
- Cost per 1000 square feet: $200 – $300
- Cost per ton: $700 – $1,000
Average Cost of Recycled Cardboard (These Days):
- Cost per unit (per square meter): $0.20 – $0.45
- Cost per 1000 square feet: $100 – $180
- Cost per ton: $400 – $700
Manufacturing Cost:
To calculate the cost associated with cutting, shopping, and forming the packaging, we need to consider another list of factors:
Labor Cost:
It includes the wages and expenses of workers who cut, shape, and check the quality of boxes. It depends on the number of employees working on printing and manufacturing units and the total time required to fulfil a job.
Labor Cost= Labor Hours * labor wages
For example:On average, if one worker spends two hours in a printing and pressing job and he/she takes $15 per hour, the labor Cost will be:
2 hours x $ 15 = 30 USD per 2 hours of working
Machine cost:
For making high-quality packaging, state-of-the-art production units are installed. These units have some operational costs and maintenance costs. It also becomes one of the factors in determining the total cost of a box or package.
Machine Cost= Machine cost + Maintenance Cost/ total units produced in given time.
Here,
Machine cost= Operational Cost of the machine
Maintenance Cost= Cost of maintenance of the machine
Total units produced= Total number of boxes produced over a period of time (monthly or annually)
For Example:
If the machine costs $50,000, the maintenance cost is $2,000 per year, and the total units produced are 10,000 per year, then the machine cost per box will be $5.20 USD.
Production Efficiency Savings:
Production Efficiency Savings is the amount that you save from producing large quantities. As the number of units increases, fixed costs, such as machine and labor costs, are spread across more units, resulting in lower per-unit costs. This simple formula will help you calculate the production efficiency savings efficiently:
Production Efficiency Savings= Fixed Cost/ total units produced
For example
In the previous example, if you increase the production units from 10,000 to 20000 boxes per year, then this results in a reduction of around 4.1 per box.
3. Shipping/Logistics Cost:
Shipping and logistics cost is an expense that accounts for moving from production units to your given charges. There is an extensive procedure to calculate this.
You don’t need to get through another series of formulas. You know why? Because you are a loyal customer of Pack Role. Here, all our valued clients get free shipping nationwide. So let go of the shipping cost forever and feel the freedom to order repeatedly.
Overhead Costs:
Last but not least are overhead expenses. These expenses usually include the electricity bills, waste management, rent, salaries, insurance, and machinery upkeep. This amount varies from setup to setup. Large production units with more employees and overhead expenses would offer expensive boxes if the number of boxes produced per month or year is less. Similarly, a small unit with fewer overhead expenses will offer more economical rates if they work hard and produce more units per run.
Total Cost:
This way, if you know the cost of all the above-mentioned factors, the total cost will be:
Total cost= material cost + manufacturing cost + shipping costs + overhead costs
Final thoughts:
To sum it all up, we must say that it’s important for the customers to know how much a box costs. It helps you believe in the rates and qualities of the upcoming order. In case you find it difficult to estimate your own box cost, don’t worry. Pack Role remains always on the go. We have a skilled team of packaging cost estimators. They keep their eyes on the fixed and variable cost factors every time. Believe their expertise and request a quote. We will be back to you promptly with the most suitable price possible. Let’s talk.
