Disclosed is a positioning and retaining assembly for securing an appliance in a carton that comprises a top cap and bottom pad. The top cap and bottom pad each includes a board and a plurality of clips secured to the board. The clips are arranged to engage the appliance at spaced apart locations around the periphery of the top and bottom of the appliance, respectively. In an alternative embodiment, one of the legs of each top clip has a ledge projecting outwardly from the top clip to engage the top of the appliance. In yet another embodiment, either the top cap or bottom pad can be replaced with a current roll-up design or molded foam, thereby only one of the top cap and bottom pad are used in the positioning and retaining assembly. The assembly is especially useful with water heaters.