you have to apply the unix-philosophy to this task: one tool for each task.
tarring and compression is a job for
bzip2, crypto is a job for either
% tar cz folder_to_encrypt | openssl enc -aes-256-cbc -e > out.tar.gz.enc
% gpg --encrypt out.tar.gz
the openssl-variant uses symetric encryption, you would have to tell the receiving party about the used 'password' (aka 'the key'). the gpg-variant uses a combination of symetric and asymetric encryption, you use the key of the receiving party (which means that you do not have to tell any password involved to anyone) to create a session key and crypt the content with that key.
if you go the zip (or 7z) route: essentially that is the same as the openssl-variant, you have to tell the receiving party about the password.