When you get a co-packing quote, the per-unit price looks simple. But that number rarely tells the whole story. Setup fees, minimum order quantities, packaging materials, and hidden line items can shift your true cost per unit by 20% or more. If you're a beverage brand evaluating a co-packer, you need to break down the quote into fixed and variable costs, understand what drives the price, and calculate your total landed unit cost before you commit.
Which of the following is a fixed cost in a co-packing quote?
Select one answer.
What co-packers actually charge per unit
Co-packers typically price per unit, per case, or by production weight or volume, with setup fees for new products (Blue Label Packaging). For beverages, the contract manufacturing fee usually lands between $0.50 and $2.00 per bottle or can, depending on production volume and complexity (Ocean Blue Innovation).
But that range is just the starting point. The per-unit charge is based on the time, labor, and materials required to package each product (ChemRite CoPac). For example, aluminum cans alone cost $0.12–$0.19 per can, depending on size and print complexity (Volunteer Botanicals). Add labels, caps, secondary packaging, and labor, and your per-unit cost climbs quickly.
Fixed vs. variable costs: the key to understanding your quote
Co-packer quotes are often opaque, but you can break them down into two buckets (Guidance):
- Variable costs scale with each unit produced: direct labor, packaging materials, and utility usage tied to production.
- Fixed costs stay constant per run: setup fees, changeover charges, minimum run charges, and some QA time.
A $500 setup fee is fixed whether you run 1,000 or 10,000 units. The more units you produce, the more you spread that fixed cost, lowering your per-unit COGS. If you run small batches, those fixed costs hit your unit cost hard.
Hidden fees that inflate your per-unit cost
Beyond the base quote, watch for these common add-ons (MSL Indy):
- Inbound receiving – fees to receive and inspect your raw materials.
- Storage – charges for holding your materials or finished goods.
- Rework – costs to fix packaging errors or defects.
- Rush charges – premiums for expedited production.
- Freight add-ons – shipping costs that can move with carrier rate increases.
Also, co-packers may charge sourcing, handling, or administrative fees for materials they procure or manage on your behalf (Wiss). Always ask for a detailed breakdown that separates variable and fixed costs, and what triggers each upcharge.
How to calculate your true landed unit cost
Your co-packer's quote is just one piece of your actual cost of goods sold (COGS). To get a true picture, factor in (Guidance):
- Raw materials – ingredients, flavorings, and functional additives.
- Packaging materials – primary (cans, bottles, caps) and secondary (cases, multipacks, labels).
- Co-packer fees – per-unit charge plus any fixed fees.
- Freight – inbound and outbound shipping.
- QA and compliance – testing, lab work, and regulatory documentation.
Use this formula:
Total landed unit cost = (Total fixed costs ÷ number of units) + variable cost per unit + material cost per unit + freight per unit
For example, if your fixed costs are $2,000 and you run 5,000 units, that's $0.40 per unit in fixed costs alone. Add $0.50 in variable labor, $0.15 in can cost, and $0.10 in freight, and your landed cost is $1.15 per unit—before you even account for your own overhead.
Actionable checklist before you sign
Before approving a purchase order, ask these questions (MSL Indy):
- What exactly is included in the per-unit price?
- What triggers upcharges (e.g., changeovers, rework, rush orders)?
- How are material costs handled—do you procure or do they?
- What are the minimum order quantities (MOQs) and how do they affect pricing?
- Are there storage or receiving fees?
- Can you provide a breakdown of fixed vs. variable costs?
- What is the total landed unit cost, not just the base quote?
Quiz: test your co-packing cost knowledge
Which of the following is a fixed cost in a co-packing quote?
- Setup fees
- Direct labor per unit
- Packaging materials per unit
How the Featured Expert Can Help
Pete Grego Consulting helps beverage brands align co-packers with high-potential opportunities and navigate regulatory requirements like TTB and FDA standards. Their services span go-to-market strategy, brand vision, and production support. If you need help evaluating co-packing quotes or building a production strategy, visit Pete Grego Consulting to book a consultation.