Getting your CNC pricing right separates profitable shops from ones that leave money on the table—or worse, go under chasing jobs that don't pencil out. Whether you're quoting a one-off prototype or landing a production run, knowing how to calculate your rates and bid competitively is what keeps the lights on and the spindles turning.
Break Down Your True Hourly Cost
Before you quote a single job, calculate what it actually costs to run your shop per hour. This isn't just your salary—it's machine depreciation, maintenance, tooling, electricity, coolant, facility rent, insurance, and labor for setup.
Start by adding up your monthly overhead (rent, utilities, salaries, equipment payments). Divide by the number of billable machine hours you expect per month. A typical mid-size CNC shop running 160–200 billable hours monthly might find their true cost at $85–$150 per hour. Don't guess; pull your last 12 months of expenses and do the math.
This floor number is non-negotiable. Any quote below it guarantees you lose money.
Account for Machine Time, Setup, and Programming
Most CNC jobs have three distinct cost components:
- Programming time: CAM software, code review, simulation. Budget 0.5–4 hours depending on complexity. Charge $75–$200/hour.
- Setup time: Fixturing, tool changes, work-holding prep, first-piece inspection. Typically 0.5–2 hours per job, charged at your shop rate or a flat rate.
- Cutting time: Actual spindle-on production. This scales with part geometry, material, and machine capability.
Use your CAM software's estimated cycle time as a starting point, then add 15–20% buffer for tool deflection, coolant application fiddling, and real-world variation. If a part shows 2.5 hours in simulation on aluminum, plan for 2.9–3.0 hours in your quote.
Calculate Material Cost + Margin
Material cost should include the raw stock, scrap factor, and handling:
- Raw material: Weigh your blanks, check current supplier pricing for aluminum (~$0.08–$0.15/lb), steel (~$0.05–$0.12/lb), or specialty alloys.
- Scrap factor: Add 8–15% for chips, cutoff waste, and rejected parts. If a finished part weighs 2 lbs and uses 3 lbs of stock, account for that 1 lb loss.
- Markup: Apply 15–35% margin on materials depending on your market and customization level. Higher complexity and smaller volumes justify higher markups.
For a simple aluminum bracket using $12 of raw material with 20% waste and 25% markup, your material line item is roughly $18–$20.
Set Pricing Tiers by Complexity
Create a quick reference framework rather than pricing every job from scratch:
| Complexity Level | Setup Hours | Typical Margin | Examples | |---|---|---|---| | Simple (1–2 features) | 0.5–1 | 30–40% | Basic slots, holes, bores | | Standard (3–5 features, mixed operations) | 1–2 | 25–35% | Brackets, flanges, multi-sided parts | | Complex (6+ features, tight tolerances, multiple setups) | 2–4+ | 20–30% | Aerospace components, prototypes, tight GD&T |
A simple job might run $280–$350 all-in. A complex aerospace bracket could easily hit $800–$2000 depending on tolerances and volume.
Bid Competitively Without Undercutting
Get 2–3 comparable quotes for recent jobs you've completed to benchmark yourself. Use websites like Mercoly to list your CNC services and see what competitors charge—you'll quickly spot if you're way off market or underpricing.
For production runs, offer volume discounts (e.g., 10% off unit price at 100+ pieces) to incentivize larger orders and improve your utilization. For one-offs, price to cover your true cost plus a healthy margin; losing a job to a $50 undercut is better than winning at a loss.
Never bid a job without a customer drawing or at minimum a clear description. Vague specs lead to scope creep and margin evaporation.
Document Everything
Save your quotes and actual costs in a spreadsheet. Track estimated vs. actual machine time, programming hours, material waste, and scrap. After 20–30 jobs, patterns emerge: certain part types always run faster or slower than expected, certain materials cause rework.
Use this data to refine future bids and spot which job types are your profit centers.
Frequently Asked Questions
Q: Should I charge separately for CAM programming, or roll it into machine time? Charge it separately on the quote line. Clients need to see why a complex prototype costs more than a simple production run, and itemizing programming educates them while protecting your margins on high-design work.
Q: What's a realistic turnaround time to quote? Standard work is 5–10 business days; rush jobs (2–3 days) warrant a 25–50% upcharge. Always confirm your spindle availability and current backlog before committing.
Q: How do I handle design revisions after quoting? Set a clear policy: first revision is included, subsequent revisions are $50–$150/hour depending on CAM rework. Put it in writing on every quote.
Track your numbers ruthlessly, refresh your bids quarterly, and list your CNC capabilities on Mercoly to reach more local customers actively searching for machining services.