The Parts of Every Price
Every custom price is built from the same parts:
- Materials: what you buy for the job, plus waste.
- Shop time: hours at your shop rate, by type of work.
- Machine time: hours at each machine's own hourly cost.
- Setup: time to draw, program, fixture and test before the first good part.
- Outside costs: outsourced work, finishing, hardware and shipping.
- Profit: a margin on top of all of it.
Then come the adjustments: minimum charges, rush fees, discounts and delivery.
Write the parts down for every quote, even small ones. It's the only way to know which jobs make money.
Materials: Price Them the Way You Buy Them
Material comes in many units. Steel by weight or length. Plywood and acrylic by the sheet. Wire by the foot or metre. Filament by the kilogram. Hardware by the piece. Keep each price in the unit your supplier sells it, then convert it to what the job uses.
| You buy | The job uses | Convert by |
|---|---|---|
| A sheet | Part area | Area used ÷ sheet area, or the whole sheet when the rest is scrap |
| A bar or tube | Cut lengths | Total length, plus saw kerf and the drop |
| By weight | Part weight | Weight from size and density, or the published weight per foot or metre |
| A roll or spool | Length or grams per part | Price per metre or per kilogram |
| A box of pieces | A count | Box price ÷ pieces in the box |
Add waste. Offcuts, kerf, test cuts, failed prints and drops are real costs. Give each material a waste allowance: higher for small parts nested on big sheets, lower for stock you can reuse.
Charge for the whole piece when you buy the whole piece. If the customer's part leaves an offcut you'll never use, it's their material.
For more on tracking prices, waste and markup, see Material Costs, Waste and Markup.
Time: People Hours and Machine Hours
Break the job into steps: design, cut, machine, weld, sand, finish, assemble and pack. Estimate the hours for each step.
Charge people's time at your shop rate, or at a department rate when some work costs more. Charge machine time at the machine's hourly cost, which covers its price over its life, maintenance and power. Keep the two apart. A laser cutting for an hour while you sand parts is two costs, not one.
If you don't know your rate yet, start with How to Set Your Hourly Shop Rate.
Setup: The Cost Small Orders Forget
Setup is everything before the first good part: drawing, programming, fixtures, test pieces, warm-up, and changing tools or material. It takes the same time whether you make one part or a hundred.
Charge setup once per job, not per part. Then see what quantity does to the cost of each part. In this example, setup is 1 hour at $75 and each part costs $6 in material and run time:
| Quantity | Setup per part | Run cost per part | Cost per part |
|---|---|---|---|
| 1 | $75.00 | $6.00 | $81.00 |
| 10 | $7.50 | $6.00 | $13.50 |
| 100 | $0.75 | $6.00 | $6.75 |
This is why one-offs cost more. Show the customer the price at a few quantities, and they understand.
Minimums, Rush and Other Adjustments
| Adjustment | When to use it | How it works |
|---|---|---|
| Minimum order charge | Small jobs that still need quoting, setup, paperwork and payment | The lowest price you'll take for any job. Small jobs are topped up to it. |
| Rush premium | A job that jumps the queue, needs overtime or bumps other work | A percentage on top of the price |
| Design fee | You draw or model before you build | A fixed fee, or design billed first as its own quote |
| Repeat-order discount | The same job again, with no new design | A percentage off, only when your costs really drop |
| Quantity pricing | Larger orders that spread the setup | Show the price at several quantities |
| Delivery | You drop it off or ship it | Charge at least what it costs you |
Decide your rules before a customer asks. "Rush is a percentage on top, paid up front" is easy to say when it's already your policy.
Margin or Markup?
Both add profit. They use a different base. Markup is profit as a share of cost. Margin is profit as a share of the price.
| Cost | Markup on cost | Price | Margin on price |
|---|---|---|---|
| $100 | 25% | $125 | 20% |
| $100 | 50% | $150 | 33.3% |
| $100 | 100% | $200 | 50% |
A 50% markup is not a 50% margin. Pick one way of thinking and use it every time. Set a minimum margin too: the lowest you'll accept, so a tough conversation can't push a job below it.
Mistakes to Avoid
- Pricing from what another shop charged instead of from your costs.
- Forgetting setup on small orders.
- Pricing material at the part's size instead of what you have to buy.
- Giving discounts your costs don't support.
- Rounding down to win the job. Round up.
When the Customer Says It's Too Much
Don't cut the price. Change the job:
"I understand. The price is the material, the shop time and the setup the job takes. If we change the quantity, the material or the finish, I can show you what that does to the price."
Do It in Customakr
- Price each material in Material Prices the way you buy it: by weight, length, area, sheet or each. Each material has its own waste allowance. The standard library has more than 3,000 sizes to start from.
- Build the quote as operation cards, one for each step. Each department charges its own rate, each machine its own hourly cost, and setup has its own line.
- Choose a Pricing Method: Target margin with the slider, Cost plus with your markup on cost, or Fixed price. You see the price at your target margin, the lowest price you'd accept, the gross margin and the markup on cost. Customakr warns you when a price is below cost or under your minimum margin.
- Open the rush, discounts and delivery settings to add a Rush Premium, a Repeat-Order Discount, a Design Fee and delivery. The minimum order charge from Rates, Margins and Location tops up small jobs, and the quote tells you when it did. A machine can have its own minimum service charge too.
- Before you send, read Have You Missed Anything? It lists costs that jobs like this one often need.
- On Pro and Team, Price at Other Quantities shows the price for 1, 5, 10, 25, 50 and 100 parts side by side.
Checklist
- Every material is priced in the unit I buy it.
- Every material has a waste allowance.
- I charge for whole sheets or bars when the rest is scrap.
- Each step has its own hours, and machine time is charged separately.
- Setup is charged once per job.
- I have a minimum order charge and I use it.
- Rush, design and delivery are on the quote, not given away.
- I know my target margin and the lowest margin I'll accept.