# How to Price Small-Lot and Prototype Work in a Job Shop > Source: https://netray.co/resources/how-to-price-small-lot-and-prototype-work-job-shop > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Knowledge Base ## Short answer How job shops price prototypes and small lots: setup amortization, programming, first article, minimum lot charges, scrap allowance and quantity breaks that protect margin. ## Category erp-general ## Content **Intro:** To price small-lot and prototype work profitably, separate one-time costs from per-piece costs: programming, fixturing, setup, first article inspection and tooling are spread over the quantity, while cycle time, material, scrap and outside processing scale with it. Many shops lose money on quantities of one to twenty because the setup is priced like a production run. This guide shows how to build the cost, set a minimum lot charge, quote quantity breaks, and check actual results so prototype pricing stops being a guess. **Sections:** #### Split Costs Into One-Time and Per-Piece **Body:** Start every small-lot quote with two buckets. One-time costs include CAM programming, workholding or fixture design and build, machine setup and tear-down, tool purchases for special cutters, first article inspection and report time, and any engineering questions that eat estimator time. Per-piece costs include material, machine cycle time, handling, inspection per piece, deburr, scrap allowance and outside processing such as anodize, passivation, plating or heat treat, which often carry their own vendor minimums. A shop that folds everything into a flat hourly rate undercharges on quantity one and overcharges on quantity five hundred, which is exactly how competitors with better setup data beat you on larger runs. **Bullets:** - One-time: programming, fixtures, setup, first article, special tooling - Per piece: material, cycle time, inspection, deburr, scrap allowance - Pass-through: outside processing with vendor minimum charges #### Respect Outside Processing Minimums and Material Lot Sizes **Body:** Small quantities hit hidden minimums. A plating or anodize vendor may charge a minimum lot price regardless of piece count, heat treat shops have minimum loads, and material suppliers sell bar or plate in lengths or sheets that leave remnant. If you quote a ten-piece prototype with the per-piece anodize rate from your last production job, you will eat the minimum charge. Keep a table of current vendor minimums and lead times, and decide a policy on remnant material: charge for the full stock length on exotic alloys like titanium or Inconel, or credit the remnant if the customer will reuse it for follow-on orders. Document the policy on the quote. #### Set a Minimum Lot Charge and Quantity Breaks **Body:** A minimum lot charge ensures no order falls below the cost of touching the job, including order entry, programming review, setup and shipping paperwork. Set it from your actual cost to launch a typical job and review it yearly. Then offer quantity breaks that show the buyer how price falls as setup amortizes, for example at 1, 10, 50 and 250 pieces. This guides buyers toward larger lots when appropriate and makes your pricing logic visible, which reduces haggling. Be wary of promising production pricing on a prototype quote unless the buyer commits to the volume, and state the quantity and time window for which each price is valid. #### Price the Risk of Learning on the Part **Body:** Prototypes often have unproven designs, unclear tolerances and revision changes. The first run teaches you how to hold a feature, and scrap risk is higher. Add a scrap allowance appropriate to the material cost and geometry, and for expensive material or tight tolerances, quote extra blanks. Clarify who owns programming and fixture work if a production order follows. If a customer demands several revisions, require a change order process that reprices rework rather than absorbing it. For first article inspections to AS9102 or customer formats, include inspection time realistically, since a thorough report on a complex part can take longer than machining it. #### Check Quoted Versus Actual and Know When Not to Bother **Body:** Pull actual setup hours, cycle time and scrap on completed small jobs and compare them with quotes by part family. If setup consistently runs fifty percent over, raise setup rates or fix the process. ERPs like JobBOSS, E2, ProShop and SyteLine capture actuals if operators report time accurately. AI can help by finding similar past prototypes and showing actual setup and cycle data to the estimator. If prototypes are a rare sideline, simple minimum charges and a standard checklist are enough, and a heavier system will not pay back. **Cta:** Netray can build a private assistant that pulls actual setup, cycle and scrap data from your ERP to ground prototype quotes. Share a few completed small-lot jobs to see what your data shows. **Faq:** #### How do you price a one-off prototype part? **Answer:** Add one-time costs for programming, fixturing, setup and first article inspection to per-piece costs for material, cycle time, deburr, scrap allowance and outside processing, then apply your margin. Check vendor minimums on finishing and heat treat, and apply a minimum lot charge so the order covers the cost of launching the job. #### What is a minimum order charge in machining? **Answer:** It is the lowest amount you will invoice for a job, set to cover order entry, programming review, setup, handling and shipping regardless of quantity. Calculate it from your real cost to start a typical job and update it periodically as labor and overhead costs change. #### Should setup be charged separately on a quote? **Answer:** Often yes for small lots, because it makes the pricing logic clear and shows why larger quantities cost less per piece. For repeat production, many shops fold setup into the unit price. Either way, state quantity assumptions and the validity window so the buyer understands what the price depends on. ## Related Slugs - swiss-machine-hourly-rate-and-shop-margins - first-article-inspection-cnc-machine-shop-process - ai-for-machine-shop-estimators-rfq-drawing-review - manufacturing-costing-methods-comparison ## Search terms how to price prototype machining, small lot pricing job shop, minimum order charge machine shop, setup cost amortization quote, CNC quote quantity breaks, prototype machining cost estimate --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json