Packaging cost

In plain words

Packaging cost is what the outer packaging of a shipment costs: the box or mailer, the fill, the tape and any printed insert that goes in every parcel. It is charged per parcel.

It does not grow smoothly. One or two items fit the small box, a third needs the medium one, and the cost jumps at that point. An offer that pushes orders across a box size pays for it on every order.

Formula

• Packaging cost = the price of the smallest box that fits the order's items, per parcel

Worked example

On an example box table, a parcel of up to two items ships in a $0.50 box and one of three or four in a $0.85 box. The engine reads the box from the number of items picked.

Two bags cost $0.50 to box and three cost $0.85. A gift that takes a two-item order to three items crosses the same step.

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

Outer packaging is not the product's own packaging

The bag the coffee comes in is part of the product's unit cost. The box it ships in is packaging cost. If your supplier's price already includes a retail box, counting that box again as packaging charges it twice.

Using it

Write down which box each order size uses and what it costs, and check where your common orders sit against the steps. A bundle tier or a gift that lands just over a box size is worth redesigning. Branded boxes cost more than plain ones on every order, so price them as part of the offer.

In Offer Suite

Offer Suite's engine can read a parcel's packaging from a table by the number of items picked, and charges it once per parcel. A packaging cost is left out when the brand's unit cost already includes it, so it is never counted twice.

Source: Offer Suite's margin engine and its cost grains.