Notes for owners · Sales management
Machine hours or part price: how to explain your quote to a procurement team
Why a CNC shop should cost in machine hours but quote a procurement team a price per piece, with fixtures, inspection, packing and freight on their own lines so three quotations are compared fairly.
The GullySales team · Updated 17 Oct 2026 · 6 min read
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Your quote sits in procurement's spreadsheet beside two others, and the lowest is the one you are asked to match. Before you cut, find out what that number leaves out. Cost the part in machine hours, but quote procurement a price per piece at a stated quantity, with every one-time charge and extra on its own line. Procurement reads one column. If your price carries the fixture, the inspection report, packing and freight, and the next shop's does not, you look dearer when you are not. The answer is a quotation that shows what sits inside the number.
Why procurement reads one column
The purchase officer comparing your quote did not write the drawing and will not machine the part. They have a spreadsheet, a target and a deadline. The columns are price per piece, delivery and payment terms. Whatever you meant by "inclusive" does not survive the copy into that sheet.
Your machine hour rate is how you work out the price. It is not what the buyer is buying. Quote the hourly rate and you invite a haggle over it. The buyer compares it with a figure heard from another shop, on another machine.
What sits inside a price per piece
Show the price per piece, then list what it covers. Every line left as "extra" or "as applicable" is a gap. A rival can look cheaper there than they are, or you end up arguing at invoice time.
| Line | What it covers | How to show it |
|---|---|---|
| Material | Bar, plate, forging or casting, with machining allowance | Grade and size stated; say if the buyer supplies it |
| Machining | Every operation on the part | One figure per piece |
| Setup and programming | Machine setting, program, first-piece check | Spread over a stated batch, and name the batch |
| Fixtures and special tools | Items made only for this part | Its own line, with who owns them |
| Outside processes | Heat treatment, plating, grinding done elsewhere | Its own line, or "included" in words |
| Inspection | What is measured and what report goes with a lot | Stated; special gauges on their own line |
| Packing and freight | Bags, trays, boxes, transport | "Ex-works" or "delivered", in words |
| Terms | GST, payment days, validity | Short validity when steel prices are moving |
Say what the quantity does to the price
Quote at two or three quantities. Setup and programming cost the same for 500 pieces as for 5,000. The price per piece falls as the batch grows, and the buyer should see that, not guess it.
Then deal with the fixture. If you spread its cost over 5,000 pieces and the buyer takes 1,000, you have paid for most of it. Either bill it once as its own line, or write how much the price recovers. Then say what happens to the balance if fewer pieces are ordered. Material needs the same honesty. Tie the material line to the rate on the day of the order, or give it a validity date.
For example: a flange quote from Faridabad
Imagine a turning and VMC shop in Faridabad quoting 1,000 zinc-plated steel flanges for an agricultural equipment maker. All figures are illustrative.
The shop quoted ₹410 a piece, "all inclusive". A rival quoted ₹365. Purchase asked the shop to match ₹365, and the owner nearly cut the rate.
The owner broke the number down instead. Material came to ₹95, machining and setup ₹230, and plating ₹25. A CMM report with every lot added ₹15, packing ₹10 and freight ₹5. The fixture, ₹30,000 spread over 1,000 pieces, added ₹30.
Then the owner read the rival's quotation line by line. Its ₹365 was ex-works, with the fixture billed separately at ₹35,000. Inspection said "as per standard" and packing was extra. Spread that fixture over 1,000 pieces, add packing and freight at the shop's own cost, and the rival stood near ₹415 without any CMM report.
The shop sent a revised quotation laid out like the table above. Material ₹95, machining and setup ₹230, plating ₹25 and the CMM report ₹15 came to ₹365 ex-works, the same headline as the rival. Packing was its own line at ₹10, freight was at actuals (about ₹5), and the ₹30,000 fixture was billed once and owned by the buyer. The totals still came to ₹410 a piece for 1,000, but now purchase could see that the rival's ₹365 had no CMM report, no packing and a bigger fixture bill behind it. The machining line did not move. In this invented case the buyer kept the shop on the shortlist but still pushed for a lower fixture charge, and the owner gave ₹2,000 off it.
Should you ever show your machine hour rate?
By default, no. There are three exceptions. The first is when the buyer's own cost breakdown format asks for it; then fill it in honestly. The second is development work priced on time and material, where the hours are the product. The third is a long-standing customer who works with you on open costing, where showing the rate builds trust rather than starting a fight.
In every other case, the hourly rate stays on your costing sheet. The quotation shows parts, lines and terms.
When one number is the right answer
A trader or a walk-in buyer wanting twenty pieces does not need eight lines. Give one all-in figure and one sentence saying what it includes.
Some enquiries are decided purely on the lowest headline figure, and no breakdown will change that. There, the useful question is whether you want the job at that price at all. Saying no is an answer.
And never itemise the machining line itself. The extras get their own lines. Your cycle times, scrap allowance and hourly rate do not.
Re-lay three lost quotes in the table
Find three quotations you lost on price. Put each into the eight lines above, and see which lines you had folded into the piece price. Then ring one of those buyers and ask what the winning quote left out. Grinding and turning jobs hide different extras, and the CNC machining and precision engineering section takes each process in turn. If the Faridabad story sounds like your last month, or you want the table built into your pricing and packaging, tell us what you need.
