Why Unit Cost Falls at Higher Quantities

Unit cost falls with quantity because every custom packaging order carries fixed set-up work that costs roughly the same whether you order a few boxes or many thousands. The more boxes that share that set-up, the less of it each box carries. The fall then levels off, because the board, print and assembly in each box are paid for every time.

That is the whole idea. The rest of this guide explains what the fixed work is, why the curve flattens, and how to use that knowledge to choose a sensible quantity rather than simply the largest one.

Two kinds of cost in every run

Every packaging quotation combines two kinds of cost: work done once per order, and work done for every box. Seeing them separately makes quantity pricing easy to understand.

The unit price is the fixed cost divided across the run, plus the variable cost of one box. On a short run, the fixed part is a large slice of each box. On a long run, it becomes a thin slice, and the variable part dominates.

What the set-up actually involves

Set-up is everything that has to happen before the first saleable box is produced. None of it depends on how many boxes follow.

• Artwork and dieline checks. Your artwork is checked against the cutter guide for bleed, safe areas, colour set-up and panel positions. Our guide to what a dieline is explains why this matters.
• Proofing. A digital proof is prepared and approved before production. Revisions add a round of checking.
• Plates. Litho printing needs a plate for each colour, including each Pantone spot colour.
• Ink mixing. Pantone colours are mixed to reference before the run.
• Cutter forme. A steel-rule forme is made to cut and crease your exact blank shape and size.
• Make-ready. The press and the cutting machine are set up, and sheets are run until colour, registration and cutting are correct. Those sheets are waste, whatever the order size.
• Finishing set-up. Foil blocks, embossing dies and coating units each need fitting and adjusting before they run.

Why the curve flattens

The unit price falls steeply at first and then levels off. It never falls to zero, because the variable cost of each box is always there.

Think of it in stages. Going from a short run to a moderate one spreads the set-up across many more boxes, so the unit price drops noticeably. Going from a moderate run to a long one spreads it further, but the set-up share was already small, so the drop is smaller. Beyond a certain point, the unit price is almost entirely board, print, finishing and assembly, and ordering more makes little difference per box.

Where that point sits depends on the specification. A box with several finishes and a lot of set-up keeps falling in price for longer. A simple box with little set-up flattens sooner. A rigid box with a large share of hand assembly flattens early, because hand work is a variable cost: every box needs the same wrapping and fitting whatever the quantity.

How the print method changes the picture

The print method is the clearest example of fixed and variable costs trading places.

Litho printing has a high fixed cost (plates and make-ready) and a low running cost per sheet, so it becomes very efficient as quantity grows. Digital printing has almost no plate or make-ready cost but a running cost per sheet that stays much the same, so it suits shorter runs and artwork that changes between versions. For some jobs, the right method depends on the quantity. Litho versus digital printing covers the choice.

This is also why one set of artwork across several sizes can cost more set-up than one size in a larger quantity. Each size needs its own cutter forme and its own layout, even when the artwork is shared.

Choosing the right quantity

The right quantity is the one you will use before something changes, not the one with the lowest unit price. A lower unit price only saves money if the boxes are used.

Weigh these before choosing:

1. How quickly you will use the boxes. Estimate usage honestly, including slow months.
2. How likely the artwork is to change. New branding, product changes or updated information panels can leave old stock unusable.
3. Storage. Flat-packed cartons and mailer boxes store compactly; assembled rigid boxes take much more room.
4. Cash. A larger order ties up money that could be spent elsewhere in the business.
5. Reorders. A repeat run of an unchanged specification skips much of the artwork work, though press and cutting make-ready still happen each time.

The minimum order is 50 boxes, which suits launches, test batches and seasonal lines. MOQ explained covers why minimums exist, and custom packaging for small businesses looks at planning quantities when volumes are still growing.

Common mistakes

• Treating the lowest unit price as the best deal. If a third of the boxes go unused, the effective cost of each used box is higher.
• Splitting one design into many small orders. Each order repeats the set-up. Where you can, combine runs of the same design.
• Changing artwork between reorders without need. Small changes can mean new plates and a new proof, which resets part of the set-up.
• Ordering many sizes in small quantities each. Each size carries its own forme and set-up; a smaller range of sizes often works out better.
• Comparing unit prices at different quantities. Only compare quotations at the same quantity and specification. Our guide to comparing packaging quotations sets out a checklist.

For the full picture of what shapes a unit price, including structure, board and finishes, read what determines custom packaging cost.