Advice

What drives the manufacturing costs of a box?

By Katelan Cunningham · August 26, 2020

When a manufacturer quotes your corrugated boxes, they're considering many factors, particularly the specifications you provide. In this article we'll explore how your specs drive the manufacturing costs of your packaging.

In previous articles, we've covered dozens of ways you can reduce packaging costs, including the effects of structural design, logistics, and quality control. However, as you narrow in on the final details of your box design, it's crucial that your specs are as precisely defined as possible. Seemingly small changes may require a new quote and potentially have significant cost implications. 

Let's explore how these four factors affect a manufacturer's unit price:

  1. Materials
  2. Factory overhead
  3. Packaging construction
  4. Printing

Materials

For boxes, material is the largest cost driver, so the cost of your material and the amount of material you use will greatly inform the cost of your boxes.

      Corrugated box cost
      (United States)
      Poly mailer cost
      (China)

      Using recycled content

      The amount of recycled content in a corrugated box depends on the manufacturer and where they source their paper. If you request higher percentages of recycled content, outside of a factory's typical range, the material will need to be brought in specially for your oder, which can increase your costs.

      For boxes, recycled content percentage is typically between 30% and 50%. Verifying exact percentages is difficult because the raw materials can fluctuate from batch to batch. If you want to ensure a minimum amount of recycled content, we recommend sourcing from factories with an FSC Recycled certification. Keep in mind that brighter white kraft has less recycled content.

      Certified materials and factories

      There are a range of packaging certifications which ensure that a material or factory meets specific qualifications. The most common box certifications in the US are FSC, SFI, and ISTA. 

      A box factory has to pay for a certification to run certified materials and they have to pay more for the materials themselves, which can increase the cost of your boxes.

      Amount of material and waste

      When a manufacturer knows how many boxes you need, they'll optimize for using the least amount of material with the least amount of waste in a way that's most efficient for your run size. 

      For example, if you order 20,000 boxes, a manufacturer may create cutting dies and print plates that are 4-up (creating 4 boxes at a time). Blanks (pre-cut sheets of corrugated) will be cut to the size of that 4-up tooling, with the least amount of waste possible.

      To use even less waste, and in turn, less material, an obvious option is reducing the size of your box. A less obvious option is switching its opening orientation. In the example below, you can see that while these two boxes are the same volume, when the box opens from the shorter side instead of the longer side, it has a 10% smaller material footprint.

      If you're flexible with the construction of your box, you may be able to optimize even further. For example, manufacturers default to producing boxes with the fluting (aka corrugation) running up and down to give the box a more rigid structure. But if you're shipping lightweight items in smaller boxes, fluting direction may not be as crucial. If you're ok with a variation in fluting direction you may be able to get more boxes out of each blank and use less material overall.

      These two boxes have the same interior dimensions, but when the box opens from the shorter side instead of the longer side, it has a 10% smaller material footprint. What drives the manufacturing costs of a box?

      These two boxes have the same interior dimensions, but when the box opens from the shorter side instead of the longer side, it has a 10% smaller material footprint.


      Factory overhead

      Manufacturers pay for machinery, labor, electricity, and other services to keep their factories up and running. Here's how those costs affect your packaging. 

      Cost of machinery

      Factories with newer machines may incur a higher manufacturing cost while they're still paying off their equipment. Older machines (though they may need extra upkeep) are already paid off, which can equate to lower production costs.

      Economies of scale

      The labor and equipment required for setup is the same for a 10,000 unit box run as it is for a 100,000 unit box run, so the more units you can get out of your setup cost, the lower your unit cost will be.

      Manual production

      Corrugated box production is highly automated, but there are some processes which are still predominantly manual: screen printing, hot stamping, foil stamping, embossing, and debossing. 

      As you can imagine, the more human labor a box requires to produce, the longer it takes to make and the higher the manufacturing cost.

      Number of steps

      The more processes or operations a box has to go through, the more it will cost. For example, at some factories, a person can stack corrugated sheets on one end of a machine, and the machine will print both sides, and cut the boxes. 

      But not all machines can print double-sided and cut in one pass. Every time that stack of boxes has to be moved in and out of a machine, the cost of labor increases along with production time. 

        Single pass machines can produce more boxes in less time because they can print two sides in one pass. What drives the manufacturing costs of a box?

        Single pass machines can produce more boxes in less time because they can print two sides in one pass.


        Packaging construction

        The number of boxes in a run and the way a box is constructed inform the size and capacity of its cutting die.

        Custom cutting dies

        Most custom boxes require a custom cutting die, which you pay for as part of your tooling. The cost of the cutting die is typically proportionate with its size. The more material required to make it, the more it's going to cost.

        Multi-up cutting dies

        One factor in the speed of production is how many items can be created from each cutting die or print plate. A 2-up, 3-up, or 4-up cutting die is a higher investment because it requires more material. But at higher quantities, these multi-up cutting dies pay off because the factory can produce your order much faster.

        Manufacturers will always run as many items "up" as is cost effective for the production run. They'll consider your order quantity, your forecasted quantity of that item throughout the year, and the size of your box to find the sweet spot of cost and efficiency. 

        Gang running packaging

        A gang run describes grouping multiple items on single sheet, to be cut and printed at the same time. This is an excellent cost saving strategy if you have multiple corrugated items that you order in the same ratios. 

        For example, if you have a box with a dedicated insert that goes out with every shipment, you could gang both items on one cutting die so that you're paying for one production run instead of two. Keep in mind that since ganged items are produced in the same run, they will all be made from the same material, using the same print process. 

        When a box can be ganged with its insert, the items can be produced in one run instead of two. What drives the manufacturing costs of a box?

        When a box can be ganged with its insert, the items can be produced in one run instead of two.


        Printing and coatings

        Most high-volume box orders require a form of plate-based printing. In plate-based printing, each color in your design requires its own print plate and machines can run up to eight colors in one pass, depending on the product and the factory.

        Printing process

        Flexographic and lithographic printing are the most common print processes for boxes. The cost of these print plates is part of your tooling which is made for your exact artwork at your exact factory. When you change artwork or change factories, you'll likely have to invest in new tooling. 

        Lithographic print plates are an exception because they're only made to last one production run. New litho print plates are made with each production run, and you may be charged a nominal recurring setup fee. 

        On the other hand, flexographic plates last much longer and a manufacturer will often replace them as the quality degrades over time, at no additional cost.

        Coatings

        Coatings like aqueous, soft touch, or UV are more expensive than traditional ink. Many of the coatings have to go slower through the machines for adequate drying or curing and those machines are often more advanced. The materials, production time, and overhead associated with coatings can increase the cost of your packaging. 

        Graphic detail

        Designs with intricate print details may require machines with more precise print capabilities that are only available at a handful of factories. The cost, upkeep, and demand of these machines can increase your print cost. 

        Ink base

        Water and oil-based inks are standard, and cost less than alternative ink bases like soy and algae. While alternative inks are more expensive due to factory availability, ink is a small fraction of the overall cost, making the bump in unit cost relatively low.

        Ink color

        Factories will already have CMYK (cyan, magenta, yellow, and black) ink on hand, pre-mixed. Pantone colors (PMS) on the other hand, have to be custom mixed, so they're more expensive. If you're printing CMYK, some colors (especially oranges and purples) may be hard to recreate precisely and will require a custom PMS ink for an exact match. 

        Keep in mind that specialty inks like metallics and neons are going to be more costly because the ingredients are more expensive and production is less available.

        Number of colors

        Each color has its own print plate, so the more colors you have in your design, the higher your tooling cost will be. The number of colors is also directly correlated to the amount of ink required and the amount of setup time and labor involved.

        When using plate-based printing, each color requires its own print plate. What drives the manufacturing costs of a box?
        When using plate-based printing, each color requires its own print plate. What drives the manufacturing costs of a box?

        When using plate-based printing, each color requires its own print plate.

        The next time you’re quoting a box, consider how your specs affect these cost drivers and talk to your packaging partner about opportunities to save.

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