Packaging is more than a box, label or insert. For many companies, it’s an important component of their business strategy, and a critical cost center that directly impacts margin, customer experience and supply chain performance. The B2B brands navigating inflationary pressures, volatile raw material markets and global supply chain disruptions must balance packaging performance, reliability and pricing.
The good news? There are clear, actionable ways to control costs without sacrificing quality or performance.
Let’s take a look at what costs are involved in packaging and how packaging pricing works.
What Costs Are Involved in Packaging?
Before you can optimize packaging pricing, you need to understand what is behind the price. Packaging costs go far beyond the unit price printed on an invoice. Your true packaging pricing isn’t just about price per unit. It should reflect the total cost of ownership (TCO).
For businesses, the primary cost drivers for packaging include:
1. Raw Materials
Corrugate, paperboard, plastics, resins, adhesives, inks and specialty coatings all fluctuate with commodity markets. Sudden demand and market fluctuations can reduce your final cost. Material grades, sustainability requirements and performance specs can also significantly affect cost.
2. Manufacturing & Conversion
Manufacturing for packaging can be extensive. Typical production activities will include:
- Die cutting
- Printing (flexo, litho, digital)
- Folding, gluing and assembly
- Tooling and plate charges
Depending on the packaging, the production costs can vary. Complex designs, specialty finishes and low production volumes increase per-unit costs.
3. Labor
Supplier labor costs vary by region and manufacturing capability. Labor also impacts lead times and scalability.
4. Freight & Logistics
For some bulky packaging, transportation, fuel surcharges, warehousing and handling costs can equal or exceed material costs.
5. Inventory Carrying Costs
Many companies struggle with carrying inventory. Over-ordering to secure price breaks may reduce unit costs but increase storage costs and strain working capital. This should be considered a packaging cost, and not an overhead cost or indirect expense.
6. Risk & Disruption Costs
Expedited freight, stockouts, redesigns and emergency supplier changes can all increase your packaging costs.
How B2B Brands Can Control Packaging Pricing
Many brands treat packaging as a transactional purchase. The reality is that packaging pricing should be managed strategically. It should be considered just like any other critical business expense category.
Keep the following ideas in mind as you evaluate the cost of your packaging.
Consider Your Total Cost Rather Than the Unit Price
The lowest unit price doesn’t always equal the lowest overall cost. Smart procurement teams evaluate:
- Freight efficiency. Can packaging be optimized for pallet density?
- Damage rates. Are you paying more for costly returns because of lower-quality material?
- Assembly time. Can structural changes reduce labor downstream?
- Sustainability goals. Are there long-term savings from a shift in material?
A holistic approach to your packaging strategy, looking at the total cost rather than just the unit price, often reveals opportunities to reduce costs without reducing performance.
Leverage Data-Driven Pricing Benchmarks
Understanding market pricing trends is critical. Commodity-based materials like corrugate and resin fluctuate. Suppliers adjust pricing accordingly, which can open up opportunities if you or your supply chain partner can manage the market.
Consider the following strategic steps:
- Monitor index-based pricing drivers.
- Benchmark supplier quotes against market trends.
- Renegotiate contracts when commodity markets soften.
- Build pricing mechanisms that are tied to transparent indices.
Proactive packaging pricing management protects against overpaying during market corrections.
Consolidate and Standardize Packaging Where Possible
Complexity increases costs. SKU proliferation increases it even more. Standardization improves negotiating power while maintaining brand consistency. By reducing packaging variations, you can:
- Increase order volumes per SKU
- Leverage your orders to improve pricing
- Reduce tooling and plate charges
- Simplify forecasting and inventory
You may need some variation in your packaging, but by working with a partner who understands packaging, you can identify opportunities to consolidate and standardize your packaging inventory.
Use Volume Aggregation Strategically
B2B brands often purchase packaging across multiple facilities, business units or product lines. Aggregating volumes creates leverage. When done strategically, with your current and expected needs in mind, you can improve pricing tiers and increase your negotiating power. With this approach, you can strengthen supplier partnerships and unlock long-term pricing agreements.
Strategic volume planning is one of the most effective ways to reduce packaging costs.
The Critical Role of Supply Chain Redundancy in Your Packaging Strategy
Negotiating better prices or using lower-cost materials isn't the only component of a packaging strategy. You also need to protect your pricing position over time and secure future supplies.
This is where supply chain redundancy becomes a competitive advantage.
What Is Supply Chain Redundancy?
Supply chain redundancy for packaging means having qualified, capable alternative suppliers across regions or capabilities, rather than relying on a single source.
While single sourcing may appear efficient, it creates significant risk. You can see price increases without competitive pressure. With a single manufacturer, market disruption can expose your supply, and you may struggle with capacity shortages. In addition, you have reduced negotiating leverage.
Supply Redundancy Strengthens Your Packaging Pricing Strategy
Building a network of suppliers or working with a partner who can connect you to one is important for a viable packaging strategy. Supply chain redundancy provides many business benefits.
1. Competitive Tension Drives Better Pricing
When suppliers know they are part of a competitive, qualified network, pricing remains disciplined. Competitive benchmarking ensures rates reflect market realities and not supplier comfort.
2. Mitigate the Risk of Disruptive Cost Spikes
If one supplier faces raw material constraints or operational disruptions, such as a storm or shipping problems, alternative suppliers help prevent emergency premiums and expedited freight costs.
3. Resilience in Volatile Markets Is Improved
Market volatility can make strategic planning impossible. Geographic redundancy reduces exposure to regional labor disruptions, transportation bottlenecks and regulatory changes.
4. Strategic Negotiations Are Possible
By working with a single supplier that provides supply chain redundancy across multiple manufacturers, companies can negotiate strategically. They can take a longer view of their planning to implement longer-term agreements and volume commitments. Any negotiation can include cost transparency clauses and index-based pricing adjustments
Redundancy transforms pricing discussions from reactive to strategic.
How to Reduce Packaging Costs Without Sacrificing Quality
With all this in mind, the most effective cost reduction strategies combine pricing discipline with supply chain design.
A smart roadmap for strategic package pricing should include:
- Conducting a packaging cost audit.
- Identifying supplier risk and evaluating supply chain redundancy.
- Identifying opportunities for SKU consolidation and standardization, especially for businesses with multiple sites.
- Benchmarking current packaging pricing against market indices.
- Ensuring that secondary suppliers are qualified.
The goal isn’t just cheaper packaging — it’s smarter packaging economics. That means investing in higher-priced materials and supplies when it makes sense, and moving away from a unit-price model to a total-cost-of-ownership evaluation.
The Strategic Advantage of Working with a Packaging Expert
For B2B brands, packaging sits at the intersection of procurement, operations and customer experience. When managed strategically, it becomes a margin lever, not just a cost center.
Businesses can reduce packaging costs, improve resilience and protect profitability — even in volatile markets. In today’s environment, managing packaging pricing requires more than negotiation. It requires strategy and supply chain resilience.
At GO2 Partners, we act as a market advocate and packaging expert to help companies build smarter packaging strategies that reduce total cost while strengthening supply chain performance. If you're ready to rethink your packaging pricing strategy, then contact GO2 Partners to discuss your challenges and goals.
