Am I Spending More on Packaging Than I Should?

 

Packaging Cost Overview

Rising input costs, fragmented supply chains, and legacy packaging decisions often leave companies overspending on packaging without realising it. The good news: reducing packaging costs is usually simpler than expected and can unlock savings of 10–20% of your total packaging budget.

In this user-friendly action plan, we break down the key drivers of packaging costs and show how they can be optimised. Let’s start with the basics.

The Three Core Cost Components of Paperboard Packaging

Any paperboard-based packaging has three primary cost elements:

1. Raw Material Costs

These include paper, ink, coatings, films, foils, and adhesives. Paper is typically the largest contributor to total raw material cost.

2. Production Process Costs

These are the costs associated with converting raw materials into finished packaging, usually divided into:

• Press (printing)

• Post-press (die cutting, folding, finishing)

• Manual work (box making, assembly)

3. Freight and Logistics Costs

If packaging is sourced locally, logistics costs may be a small portion of the total. However, for imported packaging, freight and related charges can account for up to 50% of the landed cost, making logistics optimisation critical.

While the proportion of these costs remains broadly similar within a packaging category (folding cartons, corrugated/litho-laminated cartons, rigid boxes), they can vary significantly between categories.

Now that we have a high-level cost breakdown, let’s move into a practical action plan for optimisation.

Packaging Cost Optimisation Action Plan

1. Supplier Cost Comparison

The simplest way to identify cost-saving opportunities is to request quotes from new suppliers.

Different suppliers:

• Source raw materials differently

• Use different production technologies

• Operate in different cost environments

As a result, pricing for the same packaging can vary widely.

Example:

• Offset printers are typically more cost-effective for larger volumes

• Digital printers are often cheaper for short runs

Source quotes from suppliers across geographies and with different technical capabilities. Most offer free quotations and only require product specifications.

Tip:
Start with your least complex or highest-volume packs. These offer the highest savings potential with the lowest risk.

Case Study: Digital vs Offset Printing

Digital and offset printing deliver comparable print quality, but their economics differ due to machine setup times and run speeds.

Offset Printing

• Advantage: High run speed (≈15,000 sheets/hour)

• Disadvantage: Long setup time (≈45 minutes)

• Best for: Large orders (5,000+ sheets)

Digital Printing

• Advantage: Fast setup (≈10 minutes per job)

• Disadvantage: Slower run speed (≈4,000 sheets/hour)

• Best for: Small orders and frequent design changes

Verdict:
Digital printing suits newer brands and smaller quantities. Offset printing becomes more economical as volumes increase.

2. Right-Sizing and Light-Weighting

Take a fresh look at your current cartons and boxes—specifically their size, weight, and suitability for the product.

Well-designed packaging needs to meet two basic requirements:

1. Protection: The product must remain safe throughout the supply chain.

2. Information: Printed information must be clear and legible.

Once these requirements are met, any additional size or material thickness adds cost, not value.

Since raw materials account for 60–80% of carton costs, optimising carton size (right-sizing) and board thickness (light-weighting) can deliver immediate savings.

Pro Tip

If you’re unsure about optimal pack dimensions, send your product or primary packaging to your carton supplier and ask them to redesign the pack.

This usually follows a standard process:

1. Structural design: Measure the product and create a die-line using CAD

2. Sample creation: Produce blank samples using different materials

3. Testing: Conduct drop tests and transit trials

4. Iterate: Redesign if needed and repeat testing

3. Freight and Logistics Optimisation

For companies importing packaging or sourcing from distant locations, freight optimisation can unlock significant savings.

Key considerations:

• Ask for ex-works pricing and compare it with delivered rates

• Explore organising your own transportation if it reduces cost

• Review whether palletisation is necessary for sea freight

In many cases, shipping without pallets allows up to 20% more material per container, with minimal impact on product safety. Palletisation can be done at the destination if required.

Also assess whether the packaging format itself is freight-efficient:

• Convert rigid boxes to collapsible rigid boxes

• Pack smaller boxes inside larger ones for better cube utilisation

Case Example: Rigid vs Collapsible Rigid Boxes (3,000 units)

Item	Conventional Rigid	Collapsible Rigid
Production cost per box	$1.20	$1.40
Total production cost	$3,600	$4,200
Total freight cost (sea)	$2,200	$500
Total order cost	$5,800	$4,700

Result:
~$1,000 saved by switching to a collapsible rigid box format.

4. Cost and Quantity Optimisation

Many companies order smaller packaging batches to save storage space and maintain flexibility. What’s often overlooked is how strongly unit costs drop as order quantities increase.

The inverse relationship between quantity and unit cost is driven by:

• Production fixed costs (dies, plates, setup time)

• Logistics fixed costs (customs clearance, documentation)

• Logistics variable costs, which decrease significantly at container-level volumes

How Can Kumar Printers Help You?

Manufacturers worldwide are facing increasing cost pressure due to inflation and supply chain uncertainty. Any reduction in a major spend category like packaging directly improves competitiveness.

For our export customers, we aim to reduce packaging spend by 15–20%, even after accounting for freight.

Our cost reduction approach includes:

1. Efficient procurement, production, and logistics
   Competitive pricing for existing specifications—no changes required.

2. Collaborative design optimisation
   Greater savings for customers are open to design and material improvements.

3. Full pricing transparency
   Quotes across quantity tiers and incoterms (Ex Works, FOB, DDU, DDP), so you can choose what works best for your business.

Reach out to Kumar Printers for a free quotation, and let’s identify where your packaging budget can work harder for you.