OEM Pricing Simulator

Correctly Classify Fixed and Variable Costs

By categorizing raw materials, labor, and packaging as variable costs (costs proportional to production volume) and setup and inspection fees as fixed costs (costs per production run), you can accurately understand how unit prices change with lot size.

Be Prepared to Explain Price Differences by Lot Size

The price difference between small and large lots comes from fixed cost allocation. Being able to explain to clients why small lots cost more, with clear rationale, builds trust and credibility.

Common Mistakes to Avoid

• Forgetting setup costs: Excluding cleaning and changeover costs from quotes risks losses on small-lot orders.
• No small-lot surcharge: Accepting orders at a flat rate without considering fixed cost allocation means small-lot projects erode your profits.
• Setting profit margins too low: To prepare for raw material price increases and defect risks, we recommend maintaining a minimum gross margin of 30% or higher.