How to compare supplier tooling and setup charges

A quote with a low unit price and a high mould charge may suit a long run but be expensive for a trial order. Keep one-time and recurring costs in separate rows. Ask what the charge covers before amortising it.

Identify the asset

Record tooling type, drawing revision, location, owner, expected maintenance, and whether a second supplier could use it. Ask whether design changes require a new tool, and what happens if the supplier relationship ends. A “setup” fee may pay only for machine changeover and create no transferable asset.

Show more than one volume

Calculate total cost at the first order, a realistic annual volume, and a lower-volume case. Divide tooling by an explicit volume only for the scenario shown; never hide it inside a unit price without disclosing the assumption. If the tool remains at the supplier, ask for identification and access rights in the contract. The cost comparison should reflect both price and control.

Worked setup comparison

At 1,000 units, enter Supplier A's 4.00 unit price and 1,200 setup charge in the comparison tool. Enter Supplier B's 4.80 and zero setup only if it confirms no tooling charge. Repeat the calculation at the realistic first order of 300 units: the ranking may change. Record whether A's 1,200 buys a mould the buyer owns or only a nontransferable setup. Common error: amortising the tool over 10,000 hypothetical units while approving a 300-unit order.

Source context: ASQ — Supplier Quality supports this limited point: Supplier quality assessment can consider total cost, inventory needs, and incoming verification. The buyer procedure above is Suppliers Help editorial guidance. Source checked 2026-09-27.