The core logic of CNC machining pricing is "full cost coverage + reasonable profit." To calculate pricing, it's crucial to understand both direct and indirect costs, and then adjust for order attributes (batch size, precision, delivery time) along with a risk premium. Below is a step-by-step pricing method for B2B business (including cross-border orders), with formulas, examples, and tips.
Pricing Formula
Final Quote = (Direct Costs + Indirect Costs) × (1 + Profit Margin) + Special Costs (Tariffs / Rush Fees)
Direct Costs: Costs directly attributed to a single part (materials, equipment, labor). Indirect Costs: Operational costs that can’t be directly attributed to a single part (rent, management, software, etc.). Profit Margin: Adjusted based on industry competition and order complexity (typically 15%-40%). Special Costs: Tariffs and rush fees for cross-border or expedited orders.
From Data to Final Quote
Step 1: Calculate Direct Costs (The Core, Must Be Accurate)
Direct costs = Material Cost + Equipment Cost + Labor Cost. This is the "foundation" of your pricing and must be quantified:
1. Material Cost: Calculated as "Actual Material Usage + Waste"
Formula: Material Cost = (Part Net Weight + Processing Margin) × (1 + Waste Rate) × Raw Material Unit Price
2. Equipment Cost: Calculated as "Machine Hourly Rate × Processing Time"
Formula: Equipment Cost = Machine Hourly Rate × Processing Time
3. Labor Cost: Calculated as "Effective Working Hours × Average Hourly Wage"
Formula: Labor Cost = Effective Working Hours × Average Hourly Wage
Step 2: Allocate Indirect Costs (Avoid Hidden Losses)
Indirect costs are operational "hidden expenses" and need to be allocated based on direct cost or processing time. For cross-border orders, allocating by processing time is recommended.
Step 3: Add Profit Margin and Risk Premium
Adjust profit margin based on order type (standard parts, custom parts, small-batch cross-border orders) and add risk premiums for things like rush fees, material fluctuations, and cross-border tariffs.
Step 4: Calculate the Final Quote (Including Cross-Border Example)
Final Quote = Total Cost + Profit + Special Fees (Tariffs / Rush Fees). For example, a cross-border order to North America would include additional tariff and rush fees.
Different Pricing Adjustments for Various Scenarios
1. Bulk Orders: Discount but Maintain Profit
For orders over 100 units, material waste decreases, machine hour rates drop by 10-15%, and profit margins reduce to 15%-25%.
2. Cross-Border Orders: Avoid Hidden Costs
Consider additional costs like tariffs, logistics fees, and compliance certifications (e.g., ISO 9001).
3. High-Precision Orders: Emphasize Technical Value
For high-precision parts, increase profit margin to 40%-50% and highlight the technical value in your pricing breakdown.
Key Pricing Tips
- Don’t overlook auxiliary time (e.g., setup, measuring), as it can lead to hidden costs.
- Material waste rates can vary significantly based on part complexity and material.
- For cross-border orders, account for tariffs, customs fees, logistics insurance, and exchange rate fluctuations.
- Use CAM software to accurately estimate processing time, especially for complex parts.
- Ensure your quote is clear, listing what is included and what is not (e.g., "Includes first-piece inspection, excludes shipping costs").
Conclusion
The key to CNC machining pricing is "accurate quantification + flexible adjustments." Start with direct costs (materials, equipment, labor), allocate indirect costs, then adjust for order volume, precision, and cross-border factors. Always ensure a competitive price that is also profitable for your business.
