---
title: "Packaging cost: definition, formula and example"
description: "The box, mailer, fill and tape an order ships in. Charged per parcel, and it steps up when an order outgrows its box."
url: https://offersuite.io/glossary/packaging-cost
updated: 2026-10-13
---

# Packaging cost

The box, mailer, fill and tape an order ships in. Charged per parcel, and it steps up when an order outgrows its box.

## 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.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

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.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing)
- [Calculator **Gift with purchase profit calculator** What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself.](https://offersuite.io/calculators/gift-with-purchase-profit)
- [Glossary **Fulfilment cost: definition, formula and example** What it costs to get an order out: pick and pack, extra picks, the box and the label. Charged per order or parcel, which is why bundles and gifts change it.](https://offersuite.io/glossary/fulfilment-cost)
- [Glossary **Cost grain: definition, formula and example** The level a cost is charged at: per unit, per parcel, per order or as a share of revenue. Counting a cost at the wrong grain misprices every bundle.](https://offersuite.io/glossary/cost-grain)
- [Glossary **Pick and pack fee: definition, formula and example** What a warehouse charges to pull an order's items and box them: a base fee per order plus a smaller fee for each extra item, gifts included.](https://offersuite.io/glossary/pick-and-pack-fee)