Co-Packing: What It Is, What It Costs, When to Use It – A Practical Guide

Why You Should Read This Article

Are you wondering what co-packing actually is and whether it could be a solution for your business? Do you want to know how much such a service costs, or how to determine if it’s worth the investment? Or maybe you’re planning to choose a co-packer and considering which criteria are particularly important?

This isn’t a typical article that overwhelms you with jargon or unnecessary details. Instead, we present everything FMCG businesses need to know about co-packing, using clear and concrete examples—so you can make the best decision for your company.

(If you have any questions or doubts, simply click here to speak directly with our specialist.)

What Exactly Is Co-Packing?

Co-packing is a service designed for FMCG companies that covers all processes required to prepare products for retail – such as packing, assembling, labeling, and shrink wrapping. This typically also includes advice on packaging selection, handling and repacking store returns, warehousing, and preparing products for onward transport.​

These services are provided by a co-packer – a company specialized in co-packing, equipped with trained packaging professionals, advanced processes (including quality control), and the right machinery to ensure efficient execution. With these capabilities, a co-packer can perform these processes far more efficiently and with fewer costly errors than companies that do not specialize in this area

Co-Packing in Practice: 5 Brief Examples

If you are still unsure which activities are included in co-packing, take a look at the following examples. Each one is inspired by real customers who decided to outsource one or more steps in their production process.

Example #1
A food manufacturer supplies table salt to retail chains. While this product is practically non-perishable, legal regulations stipulate that its expiry date cannot be longer than what is permitted for a given market. As the products approach the end of their shelf life, the retail chain sends them to a co-packer. The co-packer then repackages the goods into new packaging with a newly set expiry date. Afterwards, the products are sent back to the retailer.​

Example #2
A cosmetics company offering facial serums and hand creams is planning a promotion and wants to sell the two products as a “buy-one-get-one” set at an attractive price. The company sends the items to a co-packer, who bundles both products together into a single set using shrink wrap and then places a promotional label on the package.​

Example #3
A manufacturer offers several types of tea in sachets. For the upcoming holiday season, they want customers to be able to purchase a large gift set featuring sachets of different flavors. The co-packer receives the tea in bulk, fills it into sachets, and kits them into promotional sets containing a variety of flavors, ensuring everything has a festive, attractive appearance.

Example #4
An e-commerce shop specializing in household appliances sources products from a wide range of suppliers. All goods are sent in bulk to the co-packer, who then packs and labels each item according to the client’s specifications and ships them directly to end customers. Additionally, the co-packer manages returns, inspecting the returned goods, repackaging if necessary, and storing them until they are reordered.​

Example #5
A company entering the dietary supplements market has various needs related to production, packaging, and product promotion. They turn to a co-packer who advises them on the best packaging solutions and takes care of mixing ingredients as well as assembling the supplements. The co-packer also supports new product launches by building and filling promotional displays, which are then placed in prominent spots in retail stores.

8 Typical Problems Co-Packing Solves

Like any B2B service, co-packing is meant to solve operational problems or support businesses facing specific challenges. Below is a selection of common issues that FMCG companies experience – each of which co-packing can effectively address.​

Problem #1: Planning a One-Time Marketing Campaign That Needs Non-Standard Packaging for a Large Batch

Few FMCG brands operate without regular promotions or seasonal campaigns. Marketing departments may decide to create unique product sets tailored to particular occasions by mixing different items in one pack. Such ideas have clear advantages, offering marketing potential worth seizing. For those responsible for day-to-day operations, though, these campaigns can pose a real challenge – forcing them to step outside standard company processes. Training staff, adapting machines, or hiring extra workers might suddenly become necessary.​

In these cases, partnering with a co-packing company is especially helpful. An experienced co-packer has the expertise and resources to run these projects efficiently and reliably, ensuring delivery on schedule and at the expected standard of quality.

Problem #2: There’s a shipment that needs to be packed or labeled, but time is running out and there’s concern about meeting the deadline

Preparing a shipment for a special occasion or responding to an urgent order usually comes with high stress and tight deadlines. Any delay can have serious financial and reputational consequences. When working with large retail chains, late deliveries of properly prepared goods can also result in financial penalties.

A professional co-packer specializes in solving exactly these problems and is well equipped for them. With the necessary staff and machinery for an immediate start – as well as extensive experience in handling urgent orders – a good co-packer can quickly deliver.​

Problem #3: I have a batch that needs manual packing, but there’s a shortage of workers interested in this type of work

Today’s labor market poses new challenges for FMCG companies: the number of people interested in manual work – such as preparing goods for retail sale – is steadily shrinking. Even if a company has the right processes and is willing to handle the job, the lack of staff can make project delivery difficult or even impossible.

Co-packing providers are often better prepared to face these challenges. Packing, labeling, and other co-packing tasks are at the very core of what they do.​

Problem #4: I want to efficiently repackage returns and “rescue” stock

Product returns are a daily reality in the FMCG sector – sometimes resulting from labeling mistakes or the need to comply with specific market (for example, EU) requirements. Other times, products are returned because the official expiry date has passed, even though they’re perfectly usable – such as salt with long shelf stability.

Managing returns is often costly and a serious operational burden. Companies may be forced to dispose of returned goods or accept significant losses to profitability.

For a co-packer, repacking returns is part of everyday business. With experienced staff and well-optimized processes, a co-packer can transform logistical headaches into cost-saving solutions. They can also manage direct shipment of reconditioned goods – for example, back to the retailer or to another recipient. The big advantage: the clients never have to handle returns themselves and saves time and resources in the process.​

Problem #5: I need to adapt products to the requirements of other countries, but our own production lines aren’t set up for this

For internationally-focused companies, adjusting packaging and labels to fit the regulations of foreign markets is a major challenge. For example: A cosmetics company producing at scale in Europe and globally wanted to enter smaller markets. Their main production lines run 24/7, handling huge volumes for mass markets. Since stopping these lines to handle small runs for niche markets would bring heavy losses, and creating new lines for smaller orders wasn’t financially viable due to fluctuating demand, they had to find another solution.

They chose to work with a co-packer. The co-packer receives mass-produced goods, adds market-specific labels, and sends finished products to the main warehouse or straight to international distributors. As a result, the brand can focus on its primary markets, avoid investing in extra production lines, and maintain profitability even in smaller markets.

Problem #6: I offer products where the weight or the number of units in the packaging must be exact

In industries such as food or cosmetics, even a small error in the weight or count of units per package can have serious consequences. For example, if a tea box that should contain 25 bags is missing one, the company risks dissatisfied customers, returns, or even penalties from distributors. These kinds of issues can damage brand trust – especially in the era of social media – and result in financial losses as well as logistical complications.

To ensure this level of accuracy, qualified staff and precise quality control are required. However, implementing advanced control mechanisms is costly and difficult to maintain for companies that are not specialized in this area. This is where a professional co-packer comes in: thanks to economies of scale and experience, they can guarantee high quality at lower cost. A co-packer is often able to monitor weight and quantity not only more precisely, but also more efficiently than companies for whom packaging sets, sachets, or sticks is not a core business area.

Problem #7: As a small business, I need to focus on building my brand; optimizing non-core processes is challenging

For small businesses, especially in their early stages, optimizing logistical processes like product preparation for sale is rarely a top priority. Building customer relationships, establishing the brand, and improving the product already demand significant resources and attention from company leaders. Tasks such as packaging or preparing shipments represent both operational and financial challenges for small companies, since they require additional staff, equipment, and time – resources that are typically needed in more central business areas. Often, there simply isn’t enough capacity to design optimal processes, which leads to unnecessary extra costs.

Working with a co-packing company is particularly practical in such situations. A professional co-packer has a specialized team and established procedures in place to handle all of these tasks – including the necessary quality control measures. Because process optimization is one of their core competencies, they are able to perform these activities much more efficiently than non-specialized firms. This allows small companies to focus on building their core business, confident that preparations for retail sales are being handled reliably and without unnecessary cost.

Problem #8: I am launching a new product and want to choose the best packaging for it

When selecting packaging for a new product, there is a risk of choosing atypical solutions. Some of these, often favored by the marketing department, can be visually appealing but may turn out to be expensive or impractical in practice. As Bartek Grajewski, Sales Director at Transpak, often says to clients: “We may not know yet which solution will be the best for you, but we do know which ones you definitely want to avoid.” This kind of practical experience is invaluable, as it helps avoid problems that arise when packaging is chosen without full awareness of the consequences.

Few people realize that co-packing services also include consulting. If a co-packer sees potential issues with a chosen packaging, they can suggest a proven, standard solution that turns out to be better in practice and in terms of cost. Additionally, clients benefit from favorable rates for packaging materials thanks to co-packers’ existing relationships with printing houses and material suppliers. That’s why – especially if you lack internal know-how – it’s worth discussing your options with an experienced co-packer early in the process.

What Does Co-Packing Cost?

Now that we’ve covered the most common challenges a capable co-packer can address, it’s time to discuss service pricing. This is not a simple question, since co-packing costs depend on a range of factors. The most important ones are:

• Does preparing the product for retail require manual steps, or is it performed by machine?
• What kind of product is being packed, and how complex is the packaging process?
• What type of packaging is used, and what is its weight?
• What is the order volume, and how soon does it need to be completed?
• Are we talking about standard kitting or creating special assortments, such as for promotional campaigns?
• Are these new goods for retail shelves, or returns that first need sorting and repackaging?
• Are extra services needed, like packaging design consulting, warehousing, or other co-packing solutions?

So, how much does co-packing actually cost? The simplest services – such as manual labeling of standard products – can cost just a few cents per item. Kitting a promotional set usually falls in the range of several euros per set, while mounting large promotional displays can cost several dozen euros each.

As you can see, the price range is very broad and nearly impossible to specify without detailed product information and customer requirements. It is better to carefully assess whether to outsource co-packing to a specialist or handle it internally. Keep in mind that labor costs are only one part of the overall expenses linked to preparing products for retail sales.

When handling packaging internally, several cost drivers need to be considered:

• Recruitment costs – Hiring new staff can be expensive, especially since the current labor market offers few candidates for manual work.
• Training costs – Onboarding new employees takes time and investment to avoid mistakes and productivity losses. It may take several months before someone is fully productive.
• Facilities costs – Beyond rent, there are costs for adapting and maintaining suitable production and storage areas.
• Quality control costs – This is often an area where companies try to save money, but errors caught late can lead to material loss and significant problems.
• Management costs – Planning, supervising, and controlling all these processes requires additional management staff and related expenses.
• Storage costs – Storing packing materials and finished goods also creates ongoing costs.

When estimating total costs, also consider that co-packing is often needed irregularly or seasonally. This means employees may be hired only for short periods. Not only is temporary staff usually less productive than permanent employees, but they often expect higher wages as compensation for their limited contracts.

It’s also important to remember: Co-packing is not limited to packaging alone. If you need additional services in the future – such as returns management, warehousing, or direct shipment to end customers – a co-packer can easily adjust their services and, thanks to economies of scale, still offer competitive rates.

In summary: While it’s difficult to give a universal figure for co-packing costs, calculating the expenses for internal packaging can be straightforward and then compared with co-packer offers. Thanks to their scale, standardized processes, and specialized staff, professional co-packers can usually provide more cost-efficient solutions and free you from the burden of non-core business operations.

5 Questions Small Businesses Should Ask When Choosing a Co-Packer

If you run a small business and are searching for the right co-packing partner, it’s essential to consider a few key questions. Here are five particularly important ones. It’s a good idea to answer these before sending a formal request for quotation – for example, with a brief analysis of the potential partner’s website.

1. Is consulting included in the co-packing service price?

While large corporations usually know exactly what they need, small businesses often face uncertainty here. It’s wise to choose a co-packer who offers comprehensive, free consulting as part of the service – not just order fulfillment. A valuable partner takes care of the customer’s best interests and helps avoid costly mistakes. For example, selecting the right packaging type, an area where the co-packer’s expertise can be invaluable.

2.  Does the co-packer offer low minimum order quantities (MOQ)?

Smaller companies, especially in their early growth stages, often require co-packing for relatively small batches. Support for smaller quantities gives them the flexibility to focus on other priorities, like building sales channels. When choosing a co-packer, look for signals that they understand and accommodate the needs of smaller businesses.

3. Does the co-packer have relevant quality certificates?

Certifications like GMP, ISO, or HACCP not only prove the quality of the co-packer’s services – they also help clients meet the requirements of retail chains and other buyers. If your company doesn’t yet have all necessary certificates, partnering with a certified co-packer can help you bridge that gap.

4.  Does the co-packer serve other companies of a similar size?

Some co-packers focus mainly on servicing large corporations, which might mean smaller clients won’t get the priority they need. It makes sense to check – such as by visiting the provider’s website – if they also work with smaller businesses in your industry.

5. Can the co-packer accommodate larger orders as your company grows? 

Partnering with a co-packer whose services can scale with your company’s development may spare you from having to search for a new provider later on. Make sure the co-packer has the resources and infrastructure in place to handle larger volumes as your business expands.

5 Questions Large Enterprises Should Ask When Choosing a Co-Packer

Selecting the right co-packer for a large company or group is a critical responsibility with far-reaching consequences. Here are five vital questions to consider early in the process, especially during partner screening:

1. Does the co-packer have experience working with corporate clients?

Collaboration with large enterprises demands flexibility and the ability to meet complex internal quality and operational standards. It’s important to check whether the co-packing partner has experience serving big companies – start by visiting their website, as professional co-packers often clearly reference key corporate clients they have worked with.

2.  Does the co-packer have the necessary infrastructure for large-scale orders?

Meeting corporate standards doesn’t always mean having the capacity to process large volumes. Major clients often prefer working with a select few proven partners who can handle very large jobs. For this reason, ensure your co-packer has the right infrastructure in place, such as expansive warehousing (thousands of square meters) and a comprehensive park of packaging machinery.

3. Can the co-packer handle manual projects at scale?

Large companies usually have their own automated packaging lines. But non-standard needs can arise due to promotional or holiday campaigns. In these cases, staff are needed to prepare products manually for retail. Only a co-packer with many years of experience and well-developed recruitment processes for skilled workers can swiftly deliver on these requirements.

4. Does the co-packer have advanced quality control processes?

For co-packers serving large companies, certifications like GMP, ISO, and HACCP are must-haves. Equally important are robust quality management systems, which eliminate errors and protect corporate customers from issues such as poorly prepared goods reaching retail shelves.

5. Can the co-packer provide comprehensive support?

As you evaluate partners, find out which services are included – even those you may not need right now. A top-tier co-packer can offer all standard services (kitting, labeling, shrink wrapping, sachet filling, display building) as well as a wide range of extra solutions, such as procuring packaging components directly from suppliers, storing these between projects, or even taking over parts of the production process like mixing powdered ingredients.​

Our Recommendation

In this article, we’ve presented a practical overview of co-packing, focusing on the aspects that matter most for FMCG companies. You’ve learned what co-packing involves, which challenges can typically be addressed by outsourcing, how to assess cost-effectiveness, and which criteria are important when selecting the right co-packer – whether for large corporations or small businesses.​

If you still have questions or uncertainties about co-packing as it relates to your business, we have a solution for you. Call us at +48 506 050 564 or email bartosz.grajewski@transpakcopacking.com. Take advantage of a free consultation with Bartek Grajewski, our Sales Director. Bartek has years of industry experience, a thorough understanding of co-packing, and will be happy to advise you personally on your unique needs and optimal solutions.