Packaging Cost

Cost Per Unit and Quoting for Flexible Packaging and Film Converting

What actually drives cost per unit in packaging manufacturing, how to build a quote that holds margin, and the estimating errors that quietly erode it.

In flexible packaging, material is 55 to 70 percent of cost per unit, so resin and film pricing dominate the quote. Price everything per thousand square inches or per thousand pieces, not per roll. If LDPE resin runs 0.72 dollars per lb and your yield is 113 sq ft per lb, film material cost is 0.0064 dollars per sq ft before additives. A 6 percent masterbatch color load at 3.20 dollars per lb adds roughly 0.19 dollars per lb of blend. Lock a resin escalator clause: a 0.10 dollar per lb resin swing moves a high-volume quote 12 to 15 percent.

Scrap is the line estimators underprice most. Total scrap is startup plus registration plus splice plus off-spec, and 8 to 12 percent is normal on short flexo runs. Feed the Scrap Reclaim Value calculator: if you generate 900 lb of scrap at a 0.72 dollar resin cost but only recover 0.28 dollars per lb reground or sold, your net scrap loss is 0.44 dollars per lb, or 396 dollars, not zero. Quote gross material at the scrap-inflated weight, then credit reclaim separately so the margin is visible.

Machine time is billed at an all-in hour rate, not just labor. A blown film line rate of 185 dollars per hour bundles depreciation, power (a 200 hp extruder pulls about 149 kW, near 15 dollars per hour at 0.10 per kWh), maintenance, and one operator. At 19,200 bags per hour that machine cost is 9.64 dollars per thousand bags. Slow the line to 320 fpm for gauge control and the same overhead spreads over fewer pieces, pushing cost per thousand up 20 percent even though nothing about the material changed.

Changeover is pure cost with zero sellable output, and it decides whether short runs make money. Use the Flexible Packaging Changeover calculator to total minutes: a job with a 55 minute mechanical changeover plus 45 seconds per color registration on 8 colors burns roughly 61 minutes. At 185 dollars per hour that is 188 dollars of setup, plus the registration scrap material. Spread across a 20,000 piece run that is 9.40 dollars per thousand of pure setup, which is why sub-10,000 piece orders need a minimum charge.

Adhesive and consumables hide in laminated structures. A two-ply laminate at 1.6 gsm solventless adhesive priced at 3.85 dollars per lb adds about 0.63 dollars per ream of finished film. Add slitting blades, cores at 0.90 to 2.40 dollars each depending on ID, and stretch wrap for the finished pallet. The Lamination Adhesive Usage calculator converts gsm and job length into kilograms so you quote adhesive as a line item instead of burying it in a blanket 3 percent consumables allowance that under-recovers on adhesive-heavy work.

Overhead and yield loss determine whether the quote survives contact with the plant. Apply plant overhead as a 22 to 35 percent burden on direct cost, and always quote against net saleable units after the Case Pack Optimization step, since a pallet running at 68 percent cube instead of 85 percent raises freight per unit by a quarter. A defensible quote stacks material at scrap-adjusted weight, machine hours at the loaded rate, changeover as a fixed job charge, consumables itemized, then overhead and target margin of 14 to 20 percent on top.

Estimates go wrong in predictable spots. Using theoretical yield instead of actual gauge (running 2.2 mil when 2.0 was quoted costs 10 percent more resin), forgetting registration scrap on multi-color jobs, ignoring core and freight, and quoting nameplate speed instead of realized speed at 78 to 85 percent OEE. Sanity check every quote against dollars per thousand square inches or per thousand pieces and compare to your last three similar jobs. A number more than 15 percent off the recent run history is an error until proven otherwise.

Published 2026-07-01.