To quote a manufactured part, cost the route it will take: the material it consumes, the set-up paid once per batch, the machine time and hands-on labour per part, consumables and outside processing, then add overhead, an allowance for risk and your margin. Write every line down separately. A quote built as a list of named costs can be checked, explained to a buyer and compared with what the job really cost, which is how your estimates get better.
Key points
- The route comes first: you cannot cost a part until you know which machines and operations it goes through.
- Set-up is paid once per batch. It is the reason small quantities cost so much more per part.
- Machine time and labour are separate lines with separate rates.
- Material is what the part consumes, including offcuts, supports and scrap, not the finished volume.
- Margin is a share of the price, so you divide by one minus the margin; you do not multiply by one plus it.
What goes into a manufacturing quote?
Every quote, whatever the process, is built from the same families of cost. The names change from shop to shop; the structure does not.
| Cost line | Charged | What it covers |
|---|---|---|
| Material | Per part | Stock, powder, resin or filament consumed, with offcuts, supports, purge and scrap |
| Set-up | Per batch | Programming, fixturing, tool loading, first-article inspection |
| Machine time | Per part | Cycle time × the machine-hour rate |
| Labour | Per part | Loading, deburring, support removal, inspection, packing |
| Consumables | Per part or per hour | Cutting tools, build plates, filters, gases |
| Outside processing | Per lot | Anodising, plating, heat treatment, painting, with the subcontractor’s minimum |
| Delivery | Per order | Packaging and freight |
| Overhead | Share of cost | Rent, office, estimating, quality, software, not already in your rates |
| Risk | Share of cost | Scrap, remakes and uncertainty specific to this job |
| Margin | Share of price | Profit |
Step 1: read the whole request before you price anything
Most bad quotes are not arithmetic errors. They are a missed note on the drawing: a tolerance tighter than the title block, a thread callout, a certificate of conformity, a finish that needs masking. Read the model, the drawing and the request together and list what is missing or contradictory. The RFQ process covers how to ask the questions without slowing the buyer down.
Step 2: choose the route
Decide how you would actually make it: which machine, how many set-ups, which operations by hand, what goes out to a subcontractor. Every later line depends on this choice. A part that needs two set-ups on a 3-axis machine might need one on a 5-axis machine with a higher hourly rate; you can only compare the two if you cost both routes.
Step 3: cost the material the part consumes
Price the material that leaves your stores, not the material that ends up in the part. For a machined part that is the sawn blank, including the saw kerf and the facing allowance. For a printed part it is the walls, infill, supports and the purge or refresh losses. Use a current price per kilogram; for metals that move, note the date of the price on the quote.
Step 4: cost the set-up once per batch
Set-up cost is everything that happens before the first good part: programming, loading tools, making or mounting a fixture, proving out the program and inspecting the first article. Charge each activity at the rate of what it occupies. Programming at a desk costs the programmer’s rate; setting up on the machine also takes the machine out of production, so it is charged at the machine rate. If set-up estimates are where you lose most money, CNC set-up time goes deeper.
Step 5: cost the run
Machine time is the cycle time per part multiplied by the quantity and by the machine-hour rate. Labour is the hands-on time per part multiplied by the labour rate. Keep them separate: a lights-out machine runs while nobody is paid to watch it, and a part that needs ten minutes of deburring costs the same in labour whether it was milled in two minutes or twenty. How to build the hourly rate itself is in how to calculate a machine-hour rate.
Step 6: consumables, outside processing and delivery
Tool wear on a hard material, build plates, filters and gases belong to the job. Outside processing is easy to underquote because subcontractors charge lot minimums: twenty small parts for anodising may cost the lot charge, not twenty times the per-part rate.
Step 7: overhead, risk and margin
Add the overhead your rates do not already absorb. If your machine-hour rate includes the floor space and your labour rate includes supervision, do not charge them again. How to split the rest fairly is in allocating overhead for job shops.
Then add a risk allowance for this particular job, and finally margin. Margin is a share of the selling price, so the price is cost divided by one minus the margin. A 25% margin means dividing by 0.75. Multiplying by 1.25 gives a 20% margin, not 25%; margin vs markup has the conversion table.
A full worked example
An aluminium bracket, milled on a 3-axis machine from a sawn blank, then anodised. The buyer asks for 20. All rates and prices here are example figures for the arithmetic, not benchmarks.
Worked example: 20 milled and anodised aluminium brackets
| Line | Calculation | Amount |
|---|---|---|
| Material | 0.30 kg per blank × €6.50/kg × 20 | €39.00 |
| Programming | 1.5 h × €60/h | €90.00 |
| Machine set-up | 1.0 h × €75/h machine rate | €75.00 |
| First-article inspection | 0.5 h × €50/h | €25.00 |
| Machine time | 12 min × 20 = 4.0 h × €75/h | €300.00 |
| Deburr and inspect | 6 min × 20 = 2.0 h × €40/h | €80.00 |
| Tool wear | €0.75 × 20 | €15.00 |
| Anodising | 20 × €2.50 = €50, below the €60 lot minimum | €60.00 |
| Packaging and freight | per order | €18.00 |
| Direct cost | €702.00 | |
| Overhead | 12% × €702.00 | €84.24 |
| Total cost | €786.24 | |
| Risk allowance | 5% × €786.24 | €39.31 |
| Cost including risk | €825.55 | |
| Price at 25% margin | €825.55 ÷ 0.75 | €1,100.73 |
| Unit price | €1,100.73 ÷ 20, rounded up to the cent | €55.04 |
Two lines in that table decide the shape of the price. The set-up (€190.00 across programming, set-up and inspection) is more than a quarter of the direct cost at 20 parts. Run the same sheet for a single bracket and the direct cost is €289.70, of which €190.00 is set-up and €60.00 is the anodiser’s lot charge; after the same overhead, risk and margin the single part comes to about €454. That is why quantity pricing matters so much, and why a single part deserves a minimum order value rather than an apology.
Step 8: check, state your assumptions and send
Before the quote leaves, compare the unit price with similar jobs you have run. If it is far off, find the line that differs. Then write down what you assumed: the drawing revision, the material specification, the tolerance class, the finish, the delivery terms and the quote validity. An assumption on the quote protects you when the order arrives with a different revision.
Common mistakes
- Costing the finished volume, not the blank. On a machined part, most of the blank may become chips.
- Charging set-up per part. A reorder of five parts pays the set-up again unless the fixture is still on the machine.
- Counting overhead twice, once in the rate and again as a percentage.
- Multiplying by one plus the margin, which quietly gives away a few points on every job.
- Forgetting subcontractor minimums, which hit small batches hardest.
Keeping the method when you quote at volume
The method does not change when you have a hundred requests a week; the time per quote does. The usual answer is to put the rates, routes and rules into a system that applies them the same way every time, and keep a person on the jobs that need judgement. What instant quoting is explains where that line usually falls.
Quotometry is built on this structure: each price it produces is a price breakdown of named lines computed from the shop’s own machines, materials and rates, as described on the pricing engine page. Today it prices 3D printing, CNC milling and turning, 2D cutting, injection moulding and vacuum casting; sheet metal and CNC routing are not built yet.
Questions people ask
What is the formula for quoting a manufactured part?
Add up the direct costs (material, set-up, machine time, labour, consumables, outside processing and delivery), add the share of overhead your rates do not already carry, add an allowance for the risk on this particular job, then divide by one minus your target margin. Write each line down separately so you can check it, explain it and compare it with what the job really cost.
Should set-up cost be spread over the batch or shown separately?
Either works as long as it is charged once per batch, not once per part. Many shops show a separate set-up or first-off charge so the buyer can see why ten parts cost far more each than a hundred. Others fold it into the unit price for each quantity break. What matters is that a reorder of one part still pays for the set-up.
How much should I add for risk?
There is no universal figure. Price risk from what could go wrong on this job: a tight tolerance with a known scrap rate, an unfamiliar material, a long cycle where one crash costs hours. Many shops use a small percentage on routine work and a larger one, or a named scrap allowance, on difficult jobs. Track scrap and remakes so the allowance is based on your own history.
How long should a manufacturing quote be valid for?
Long enough for the buyer to get approval, short enough that your material prices and capacity have not moved. Thirty days is a common default; quotes that depend on volatile metal prices or a booked machine slot often carry a shorter validity. State the validity on the quote and re-check material costs before accepting an order on an expired one.
Quotometry prices every part from your own machines and rates, on your website, in seconds.