"Understanding Packaging Pricing: A Guide to Estimation and Cost Breakdown for Custom Packaging"

When it comes to custom packaging, one of the most common questions we hear is, “Why does the price vary so much depending on the order quantity?”

Also "Why is it always necessary to calculate prices for custom packaging?"

 At Royal Park Lahore, we believe in transparency and helping our customers understand how pricing works. Custom Packaging cost depends on the specification:Size of the boxes ,number of colors to be printed and order quantities.
In this blog, we’ll break down the three main components of packaging costs—setup cost, process cost, and stock cost—and explain why prices differ for small, medium, and bulk orders.

Whether you’re a startup, an e-commerce brand, or an established business, this guide will help you understand how custom packaging pricing works and why order quantity plays a significant role in determining the final cost.

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The Three Components of Packaging Costs

Custom packaging pricing is primarily determined by three factors:

1. Setup Cost

2. Process Cost

3. Stock Cost

Let’s dive into each of these components in detail.

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1. Setup Cost

The setup cost is a one-time expense required to prepare the machinery and tools for production. It includes:

• CTP Plates (Printing Plates): These plates are used for offset printing and depend on the number of colors to be printed.

• Die Charges: The cost of creating a custom die for cutting the packaging into the desired shape.

How Setup Cost Affects Pricing:

The setup cost remains the same regardless of the order quantity. However, it is distributed across the total number of units, which means the per-unit cost decreases as the order quantity increases.

Example:

• If the setup cost is Rs. 10,000:

  • For 100 units, the setup cost per unit = Rs. 100.

  • For 1,000 units, the setup cost per unit = Rs. 10.

  • For 10,000 units, the setup cost per unit = Rs. 1.

  • For 100,000 units, the setup cost per unit becomes negligible.

This is why customers with smaller orders (e.g., 100–1,000 units) often feel that the price is high—they are bearing the full setup cost, which is spread over fewer units.

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2. Process Cost

The process cost includes all the steps involved in transforming raw materials into finished packaging. It depends on the following factors:

• Printing Cost: Depends on the number of colors and the number of sheets (calculated per 1,000 sheets).

• Lamination Cost: Depends on the size and number of sheets.

• Die Cutting Cost: Depends on the number of sheets (calculated per 1,000 sheets).

• Pasting Cost: Depends on the number of sheets (calculated per 1,000 sheets).

• Foiling/UV or Finishing: Depends on the number of sheets (calculated per 1,000 sheets).

How Process Cost Affects Pricing:

The process cost is calculated per 1,000 sheets, so it scales linearly with the order quantity.

Example:

• If the total process cost for 1,000 units is Rs. 10,000:

  • For 100 units, the process cost remains Rs. 10,000 (since the minimum unit of calculation is 1,000).

  • For 2,000 units, the process cost = Rs. 20,000.

  • For 10,000 units, the process cost = Rs. 100,000.

This means that for smaller orders, the process cost per unit is higher because the fixed cost is spread over fewer units.

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3. Stock Cost

The stock cost refers to the cost of the raw materials (paper, card stock, etc.) used to create the packaging. It is a 100% variable cost, meaning it depends entirely on the order quantity.

How Stock Cost Affects Pricing:

In offset printing, a minimum number of sheets is required to set up the printing, lamination, and die-cutting processes. This means that for smaller orders, extra sheets are needed, which increases the stock cost.

Example:

• To produce 100 units, you may need to calculate stock for 300 sheets (100 + 200 extra sheets).

• For 1,000 units, you may need 1,200 sheets.

• For 10,000 units, the extra sheets become negligible.

This is why the stock cost per unit is higher for smaller orders but becomes more reasonable as the order quantity increases.

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Why Prices Vary by Order Quantity

• Small Orders (100–1,000 units): High setup and process costs per unit, plus additional stock costs due to extra sheets.

• Medium Orders (1,000–10,000 units): Lower setup and process costs per unit, with minimal extra stock costs.

• Bulk Orders (10,000+ units): Negligible setup cost per unit, and only variable costs (process and stock) affect the price.

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Conclusion: Key Takeaways

1. Small Orders: Higher per-unit cost due to setup charges and extra stock requirements.

2. Medium Orders: More reasonable pricing as setup and process costs are spread over more units.

3. Bulk Orders: Lowest per-unit cost, with only variable costs affecting the price.

At Royal Park Lahore, we strive to provide transparent pricing and custom solutions for businesses of all sizes. Whether you need 100 units for a prototype or 100,000 units for a large-scale launch, we’re here to help you achieve your packaging goals without breaking the bank.

Ready to get a quote for your custom packaging? Contact Royal Park Lahore today! Whether you’re a startup or an established brand, we offer affordable, sustainable, and high-quality packaging solutions tailored to your needs. Let’s bring your vision to life!