What is Packing Cost?
The Packing Cost refers to the total amount of money it takes to pack a finished product.
Packing any order requires packaging, boxes, and (not to be forgotten) filler. Inventory slips, ads, coupons, and other collateral might make their way into shipments, too. Add these to the overall labor cost of packing (and any assembly required) to get your full packing costs.
By tracking packing costs, a lot of warehouses make some startling discoveries. For example, carrying a bunch of box sizes, or fancy custom packaging, can be costly. Sometimes it’s better to have a set of plain boxes of predetermined standard sizes and fill any excess space with air packs or filler. Or perhaps the time it takes to add coupons and a catalog to each shipment is not justified by the increase in re-orders. But every situation is different: you can’t know what works until you actually measure.
How Do You Calculate The Packing Cost?
To calculate your packing cost, simply add the costs of the following assets with one another: design, size, material, quantity, & any other paid asset you need to pay to finish your product packaging.
Packing Cost = Designer + Size + Material + Quantity.