The Words You Cannot Read on a Packaging Quotation: Make-Ready, Overrun and Spoilage — Whose Risk Do They Cover?

Last year a young buyer from a home-care brand came to me with three quotations, saying she simply could not compare them. A had the lowest unit price but a line underneath reading "make-ready charged separately"; B was ten cents higher per piece but stated plates and make-ready included; C had simply given a lump sum. Her question was: which of these three is actually cheaper?

A good question, because it is not an arithmetic problem. Those terms on a packaging quotation essentially divide risk: who carries the fixed cost of starting the press, who carries quantity variation, and who carries what gets spoiled. Understanding those three things is more useful than arguing over the second decimal of a unit price.

Make-ready: paying for the uncertain beginning

When an offset press switches from the previous job to yours, it has to wash the rollers, change plates, balance ink and water and run up to register. During that time the machine turns, people work and paper is wasted, but not one saleable sheet comes off. That cost is identical whether you print 3,000 or 30,000 boxes — it is fixed. Make-ready simply prices it separately.

So the logic is clear: the smaller the quantity, the more make-ready each box carries. That is why the same box can cost more than twice as much per piece at 3,000 as at 30,000. Many buyers think the supplier is punishing small orders; in reality the fixed segment is doing the work.

Can make-ready be negotiated? It depends. If your job uses a standard size, standard board and four colours, and the supplier can gang it with other work, there is genuine room, because the make-ready cost is shared across several jobs. If your job uses two spot colours, specialty stock and needs its own press run, whatever is cut from make-ready will come back somewhere else — most often through the spoilage rate, or through the board grammage.

Overrun allowance: the easiest term to lose money on

The overrun allowance is the extra quantity started to guarantee delivered quantity. The trade separates press overrun from finishing overrun: the first is waste during make-ready and running, the second is loss during die-cutting, foiling, mounting and forming.

What matters is how the contract words it, and there are two very different versions. One reads "settled on quantity actually delivered, ±3% over or short", meaning the supplier may deliver 9,700 or 10,300 pieces and bill what is delivered — the risk sits mostly with you, as you pay for the excess or must cope with a shortfall. The other reads "guaranteed delivery not less than 10,000, excess not charged", which puts the risk on the supplier, who then builds the expected overrun into the unit price.

Neither is inherently better, but you must know which you have signed. One customer learned the hard way: his contract allowed ±5%, he ordered 50,000 promotional boxes, received 52,300, paid for the extra 2,300 — and his promotion only had 50,000 gifts, so the rest sat in the warehouse for two years. He added one sentence to later contracts: any excess requires prior written confirmation before it can be billed. That single line has prevented the problem ever since.

Spoilage rate: it shows how confident the supplier is in the process

A high spoilage rate does not necessarily mean the supplier is greedy; the job may genuinely be difficult. When several operations stack up, losses multiply: 97% good on press, 96% on foiling, 98% on die-cutting, 95% on mounting gives under 87% overall. More operations and finer work mean higher spoilage — that is physics.

So when a case-made box quotation shows 12% spoilage, do not immediately negotiate it down; ask which operations account for most of it. A supplier willing to be honest will tell you, for example, that the foiled area is large and sits close to a crease, and that most of the loss is there — at which point you can ask whether the design can move the position. That conversation genuinely saves money; haggling does not.

Conversely, if a complex job quotes an unusually low spoilage rate, be more careful. Either they have not done it before and have not costed it, in which case there will be a mid-job price increase; or they intend to deliver by lowering the quality bar, passing off slightly off-colour or misaligned pieces as good.

Plate and die charges: one-off or recurring?

Plate charges cover CTP output, priced by colour and sheet size — four colours means four plates. Die charges cover making a cutting die, depending on structure complexity and size. Both are one-off, but two details belong in the contract.

First, are they charged again on repeat orders? CTP plates are consumables and are effectively scrapped after the run, so re-plating on a repeat is reasonable; a cutting die is reusable, so a repeat should not normally be charged the full die cost, at most storage or refurbishment. Some suppliers charge the full tooling cost on every repeat — ask beforehand.

Second, who owns the tooling? If you paid for the die, the ownership and physical custody should be stated. If you change supplier later, can you take the die? In most cases tooling paid for by the customer should belong to the customer, but without wording you are exposed to "the die is in our custody, taking it out is extra".

How to bring several quotations onto one line

I usually suggest a clumsy but effective method: require every supplier to quote on the same template, listing six items — unit price, make-ready, plate charge, die charge, spoilage or overrun rules, freight and packing method — then calculate delivered total cost divided by usable quantity. Note usable, not delivered: if the overrun rule means you receive goods you cannot use, deduct them.

One item often forgotten is outer cartons and pallets. Some quotations include standard outer cartons, some quote bare goods, and nobody costs the warehouse labour of repacking on arrival.

That buyer re-issued the enquiry using this table, and the result contradicted her first instinct: supplier A with the lowest unit price ended up highest on delivered total cost, because of make-ready and the overrun rule. She told me: "So the problem was not that they quoted unclearly, it was that I had been comparing the wrong thing."

Further reading

Buying Custom Gift Boxes for the First Time: A Six-Week Flow and the Three Checkpoints That Matter
Why Gift Box Samples Get Rejected Three Times: Sample Fees, Production Price and the Review Sheet
Five Die Tooling Cost Comparisons Before Opening a Gift Box: Laser, Plywood and Resin Rules
Three Hidden Costs in Drawer Boxes: Magnets, Ribbons and Inserts
Six Real Actions in a Packaging Supplier Audit