# Should-cost calculator: what a part should cost

> Estimate what a metal, plastic or fabric part should cost from India, China or Vietnam: material, machine time, tooling, overhead and margin, vs your quote.

Source: https://sourcesquid.co/tools/should-cost/

Cost tool · free

# Should-cost calculator. Know the fair price first.

Should-cost is the price a well-run factory could reasonably charge for a part, built up from material, machine time, tooling, finishing, packaging, overhead and a fair margin. Enter your part's weight, material and cycle time and this calculator gives a should-cost per part and the gap to your current quote.

  * __Free, no sign-up
  * __Runs in your browser
  * __Save as PDF or email it

Should-cost per part**$0.00**

Your quote vs should-cost**0%**

Gap per year**$0**

[Want a verified should-cost? Get a free teardown in 48 hours](https://sourcesquid.co/start/?from=should-cost)

**Saved.** Want a copy in your inbox or on WhatsApp as well? Optional.

How it works

## Three steps. One clear answer.

  1. 01

Pick the material and production country, then check the indicative price per kg and machine rate against today's figures.

  2. 02

Enter net weight, yield, cycle time, tooling, finishing, packaging, overhead and margin.

  3. 03

Read the should-cost per part, what drives it, and how far your current quote sits above it per year.

Method and sources

Gross material = net weight ÷ yield; **material cost** = gross weight × price per kg. **Conversion** = machine and labour rate per hour × cycle time in minutes ÷ 60. **Setup and tooling** per part = cost per order ÷ order quantity. Overhead is a percentage of material, conversion, tooling, finishing and packaging; supplier margin is a percentage of that subtotal plus overhead. **Should-cost** = subtotal + overhead + margin. The gap to your quote = (quote − should-cost) ÷ should-cost, and the annual gap = (quote − should-cost) × annual volume. Material prices and hourly rates are indicative starting points for India, China and Vietnam; replace them with current figures for your grade and process.

Results are estimates to support your decisions. For binding figures, ask our team or your customs broker.

Should-cost questions

## Straight answers.

Anything else, ask us directly. A principal replies, not a bot.

[anirudh@sourcesquid.co](mailto:anirudh@sourcesquid.co)

### What is a should-cost model?

A should-cost model estimates what a product ought to cost by adding up its material, conversion (machine and labour), tooling, finishing, packaging, overhead and profit. Buyers use it to set target prices and to negotiate on facts rather than percentages.

### How accurate is a should-cost estimate?

With good inputs, a should-cost estimate is usually within 10 to 15% of a competitive quote. The biggest sources of error are cycle time and material yield, so ask the supplier for those two figures.

### What overhead and margin should I assume for a supplier?

Overhead of 8 to 20% of cost and a margin of 8 to 15% are common for repeat industrial parts from Asian suppliers. New, complex or low-volume parts often carry more.

### What is material yield?

Yield is net part weight as a share of the material bought. A part machined from bar may use only 50 to 70% of the material, a pressed part 70 to 85%, and an injection-moulded part 95% or more.

### How do I use should-cost in a negotiation?

Share the structure, not a demand: show your estimate for each cost element and ask the supplier where their figures differ. Focus on the biggest element first, and agree to index material to a published price so both sides share market moves fairly.

Use it with

## Tools that work well together.

[Cost**Teardown cost** A teardown cost estimate rebuilds a finished product's price from its parts, assembly labour, packaging, overhead and supplier margin.](https://sourcesquid.co/tools/teardown-cost/)[Cost**Quote compare** Comparing supplier quotes fairly means converting each one to the same basis, landed cost per unit at your door, because EXW, FOB, CIF and DDP prices include different costs.](https://sourcesquid.co/tools/quote-compare/)[Cost**Landed cost** Landed cost is everything you pay to get a product to your warehouse: the factory price plus freight, insurance, import duty, customs fees and local charges.](https://sourcesquid.co/tools/landed-cost/)[Cost**Make or buy** A make-or-buy decision compares the total cost of producing a part in-house, including upfront investment and fixed running costs, with the landed cost of buying it from a supplier.](https://sourcesquid.co/tools/make-or-buy/)

From numbers to factories

## Turn this result into a free teardown.

Send one drawing, photo or quote. A principal returns how it is made, where it is made best and a realistic target price, free, in 48 hours.

[Get my free teardown](https://sourcesquid.co/start/?from=should-cost)[Talk to a principal](https://sourcesquid.co/contact/)