5 Signs Your Business Is Overpaying for Packaging

Sign 1: You Have Not Renegotiated in Over a Year

Corrugated prices fluctuate with containerboard input costs, which change multiple times per year. If you are paying the same price per box you agreed to 18 months ago, you may be overpaying — or underpaying, but more likely overpaying, since most suppliers apply price increases promptly and price decreases only when pressed. Request a requote from your current supplier and at least two competitors every 12 months.

Even if you are happy with your supplier's service, a competitive bid process keeps prices honest and often reveals savings of 5 to 15 percent. You do not need to switch suppliers to get better pricing — but you do need to demonstrate that you are willing to.

Sign 2: Your Boxes Are Bigger Than Your Products

Open ten random outbound shipments and measure the void space inside each one. If more than half have 40% or more void space, you are overpaying for both boxes and void fill. This is the most common packaging waste in e-commerce operations, and it is driven by using too few box sizes to cover too wide a range of products.

The fix is straightforward: analyze your top 20 SKUs by volume, determine the ideal box size for each, and add one or two sizes to your portfolio to eliminate the worst offenders. The investment in additional box sizes pays back immediately through reduced void fill, lower dimensional-weight shipping charges, and less corrugated consumed per shipment.

Sign 3: You Are Using Heavier Board Than You Need

Check the box manufacturer's certificate on your current boxes. If you are using 44 ECT or 275# test for products weighing under 30 pounds, you are almost certainly over-specced. A 32 ECT box handles up to 65 pounds and costs 15 to 25 percent less than 44 ECT. Downgrading where product weight allows is one of the easiest cost reductions available.

The exception is when boxes are stacked high in your warehouse or on pallets during transit. In that case, the stacking weight, not the product weight, determines the required board grade. But for most e-commerce shipments that travel through the parcel network and are never stacked more than one or two high, 32 ECT is more than adequate.

Sign 4: You Buy All New and Never Consider Used

If 100% of your boxes are new, you are leaving 20 to 40 percent savings on the table for portions of your volume that could easily use used boxes. B2B shipments, internal transfers, non-fragile products, and subscription replenishments are all prime candidates for used boxes at 40 to 60 percent less than new.

The objection is usually quality, but the reality is that Grade-A used boxes — one previous use, structurally sound, clean — perform identically to new boxes. A blended approach using used boxes for 30 to 50 percent of volume can save thousands per month without any change in product safety or customer experience.

Sign 5: You Do Not Track Packaging Cost per Shipment

If you cannot immediately answer the question "What does packaging cost per average shipment, including box, void fill, tape, and labels?" then you are not managing packaging as a cost category. And unmanaged costs always run higher than managed ones. The fix is simple: calculate total monthly packaging spend divided by total monthly shipments. Track this metric monthly and set a target for improvement.

Typical packaging cost per shipment for a well-optimized e-commerce operation is $1.50 to $3.00. If your number is above $4.00, there is almost certainly significant savings available through the strategies outlined above. Start tracking, start benchmarking, and the savings opportunities will become visible.