How much did that box actually cost?

In addition to the cost of a box, there are other expenses associated with packaging an item. The cost of tape, protective materials such as bubble wrap, shipping bags, and other packaging supplies all contribute to the overall cost of a finished shipment.

When you ship multiple items each week, it becomes easy to lose track of small expenses caused by overstocking or wasting packaging supplies. Tracking the amount spent on shipping supplies helps you identify areas of waste within your business and create a realistic packaging budget.

Begin by tracking your most commonly used shipments. Rather than trying to create a budget based on your entire inventory, focus on a typical order that you pack regularly.

Identify a typical order and collect all the packaging materials you normally use. These may include:

• A cardboard box or shipping bag
• Packing tape
• Protective packaging materials, such as bubble wrap
• Shipping labels
• Inner bags and other protective packaging
• Miscellaneous supplies, such as document pouches

Determine the individual cost of each item. For example, if you purchase 100 boxes for $80, each box costs $0.80 before delivery fees. Apply the same calculation to shipping bags, labels, and other supplies. To find the cost per unit, divide the total purchase price by the number of units received.

Calculating the cost of supplies sold in rolls requires a little more effort. For packing tape, measure how much tape you typically use on a single package and compare it with the total length of tape on the roll. Apply the same method to packing paper and cushioning materials sold by length.

Remember to include the cost of having your shipping supplies delivered. Although a low listed price may seem attractive, freight and delivery charges can change the total cost. Compare suppliers using the final cost for the same quantity of supplies, including all applicable delivery fees.

Once you have calculated your basic packaging costs, monitor the unnecessary use of materials during the packing process. Common examples include excessive tape, duplicate shipping labels, and oversized sheets of wrapping material. Identify the reasons behind this waste. Is a dull tape cutter causing problems? Are employees having difficulty reading labels? These issues may be easier to resolve than you expect.

Review your packing methods as well. Are you using oversized sheets of packing paper simply because they provide enough support to prevent items from shifting during transit? Consider whether a better-fitting cardboard box could provide the same level of protection while reducing the amount of packaging material required.

Always prioritize product protection when looking for ways to reduce costs. Removing necessary padding can lead to damaged goods, additional labor, customer complaints, and the expense of shipping replacement products.

Consider both protection and time efficiency when evaluating new or alternative packaging materials. Although reducing expenses is important, a material that tears easily or takes significantly longer to use can delay order fulfillment. Test different materials, record how long each takes to use, and determine whether the change improves overall packing efficiency.

Maintain records of all packaging costs, including the materials used and the specific packing steps required for each order you evaluate. Update these records whenever supply prices, products, or packaging methods change.

Detailed records allow you to compare different packaging materials accurately. Instead of estimating where your expenses go, you can identify which supplies offer the best product protection, which make packing easier, and which provide opportunities to save money by reducing waste.