How broker pricing actually works
A packaging broker or local distributor is a business that sources products from factories, holds inventory or facilitates orders, and sells to brands at a markup. That markup is their revenue. Without it, they do not have a business.
The markup varies by product type, volume, and how competitive the broker's market is, but in sustainable packaging it typically sits between 30% and 70% of the factory price. For commodity products like standard mailers or kraft boxes, margins are tighter. For specialty sustainable materials like compostable films, PCR content bags, or certified paper products, margins are higher because fewer buyers know the alternatives.
Where the money goes: a simplified example
In this example, the broker's margin on a single $15,000 order is $4,000. A buyer spending $150,000 a year on packaging through a broker at a 40% margin is paying roughly $43,000 a year for the convenience of not dealing with factories directly.
What the broker markup actually pays for
It is worth being fair about this. A good broker does provide value: they handle freight forwarding, customs clearance, quality inspections, and consolidation of shipments from multiple factories. For a small business with no logistics experience, those services have real worth.
The question is whether you are getting $40,000 worth of value per year, or whether those logistics services could be arranged separately for significantly less once you have factory relationships in place. For most businesses doing meaningful packaging volumes, the honest answer is no.
The information asymmetry problem
The real reason brokers remain dominant is information asymmetry. The broker knows which factories produce what, at what price, with what certifications. You do not. That knowledge is their competitive advantage, and they have every incentive not to share it with you.
When you ask a broker which factory made your last order, they will typically decline to say. When you ask them to share factory audit reports or certification documentation that traces back to the specific facility, many will provide a certificate without specifying the factory. This is not always deception. It is the nature of their business model.
When using a broker still makes sense
For very small packaging volumes where the MOQ of a direct factory order would leave you holding excess stock for months, a broker's ability to break bulk and sell smaller quantities at a premium may be cost-effective. If your annual packaging spend is under $20,000, the premium may be justified by the flexibility.
Brokers also make sense in the short term when you are launching a product and need to move quickly. Establishing a direct factory relationship takes time. A broker can supply you now while you build that relationship for future orders.
How direct sourcing changes your cost structure
When you buy directly from a factory, the price you pay is the factory price plus freight and any import duties. There is no intermediary margin. For high-volume orders, the savings are immediate and significant. For lower-volume buyers, the main advantage shifts to transparency: you know what you are paying for, and you can price your own logistics independently.
Direct sourcing also gives you access to custom options that brokers often cannot provide. A factory can adjust material specifications, run a custom print, change dimensions, or produce a product that does not exist in any broker's catalogue. That flexibility has value beyond the cost saving.
Cut out the broker margin from your next order.
Our guides give you verified factory contacts, real MOQs, and certified supplier details for every major sustainable packaging category. The research is done. The factories are vetted.