Most CNC shops underestimate how much small orders eat into profit margins—and struggle to say no to work that doesn't move the needle. Setting a minimum order value (MOV) isn't about turning away business; it's about building a sustainable operation that actually pays you for your expertise.
Why Low-Dollar Orders Tank Your Margins
A $150 order for a single aluminum bracket sounds like easy money until you factor in setup time, tool changes, and machine programming. If your typical program and setup takes 45 minutes but only generates $50 in profit after material and labor, you've just spent nearly an hour earning pocket change.
The real damage compounds. Each small order:
- Requires operator attention (unscheduled downtime)
- Pulls your best machines away from higher-margin work
- Generates disproportionate inspection and quality-control overhead
- Creates scheduling friction when rush orders arrive
Without a clear minimum, low-value work naturally crowds out profitable jobs. You end up busy but broke.
Calculate Your True Breakeven Point
Start by tallying your actual setup and programming costs per job, not per part:
Factor these in:
- Operator setup time (15–60 minutes depending on complexity)
- CAM programming or file prep
- Machine warm-up and calibration
- First-piece inspection
- Packaging and shipping prep
For most shops, this totals $75–$200 per job setup alone. A 10-part order of 1" steel pins might take 40 minutes to program and set up, then 5 minutes of run time per part. That's roughly $140 in setup cost plus $15 in material and run time. At $25 per part, you're making maybe $110 on a $250 order—not terrible, but thin.
Now imagine 50 such small orders instead of five larger jobs. You've wasted weeks jumping between setups for the same 50% profit margin.
Setting Your Minimum: Practical Ranges
Most profitable CNC shops land somewhere in these ranges depending on specialization:
General job shops: $300–$800 minimum
- Handles simple setups on standard work
- Still profitable on 5–20 part runs
- Works for spots, flats, and straightforward turning
Precision/medical/aerospace work: $1,000–$3,000 minimum
- Reflects higher inspection and compliance overhead
- Justifies complex programming
- Accounts for tighter tolerances and material costs
Custom one-off fabrication: $500–$1,500 minimum
- Acknowledges unique tooling and design time
- Protects against prototype work that eats hours
Your minimum should ensure you're making at least 40–50% gross margin on the smallest jobs you accept. Below that threshold, profit margins compress too much.
Communicating Your Minimum Without Losing Leads
Be transparent but flexible. Phrase it clearly on your website and sales materials: "Minimum order value of $500 for standard turned parts; quantities under 5 may incur setup fees."
Offer structured workarounds:
- Combine orders: Suggest the customer batch jobs or hold orders for larger runs
- Setup fees: Charge $150–$300 additional for jobs below minimum, calculated separately from parts cost
- Volume discounts: Offer better per-piece pricing for orders 2–3x your minimum, encouraging larger orders naturally
- Expedite fees: Add cost for rush jobs that break your scheduling flow
This approach protects your margin while staying customer-friendly. Many prospects accept these terms once they understand the economics.
Update as You Grow
Revisit your minimum annually. As your shop scales, you may lower it because overhead per job decreases. Conversely, if labor costs spike or you move upmarket toward more complex work, raising your minimum keeps you profitable.
Listing your services and minimum order requirements on Mercoly helps qualified buyers find you and understand your parameters upfront—you attract leads already aligned with your pricing structure instead of wasting time negotiating with unsuitable prospects.
Track which order sizes consistently hit your profit targets. If 95% of your profitable work comes from orders above $1,200, your minimum should reflect that reality, not guesswork.
Frequently Asked Questions
Q: Should I quote jobs below my minimum if the customer is willing to pay for setup time? Yes—if the total price (parts + setup fee) still nets 40%+ margin. However, don't treat this as routine; it's an exception, not the rule.
Q: How do I justify a minimum to existing customers who've always placed small orders? Grandfather existing relationships or offer a one-time courtesy window, then implement your new minimum for all new orders. Be transparent: "We're streamlining operations to keep turnaround fast for everyone."
Q: What if my competition has no visible minimum? They likely have one—they're just not transparent about it, or they're working on thin margins. Your profitability matters more than matching their website copy.
Start enforcing your minimum this month and track profit impact over the next quarter. You'll see why saying no to small orders lets you say yes to real growth.