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Guide · read a quote

How to read a machining quote

Short answer: a good quote is read in three passes: what is included (quantities, tooling, inspection, freight), how the price is built (material, hours, rates, margin) and what the supplier commits to (lead times, quality, validity). Projects House lists thirteen items a manufacturing quote must contain; here are the essentials, then a real quote annotated.

By the RFQdecoder team · updated 27 September 2026

What a quote must contain

  • The price at several quantities and what it includes: material, secondary operations, packaging, inspection.
  • The validity period and a material escalation clause.
  • Itemised non-recurring costs: mould, fixtures, programming, prototypes, first article.
  • Tooling ownership once paid, and the number of trials included, two to three according to Projects House.
  • Separate lead times: tooling then production, with the start trigger.
  • The incoterm, the expected quality control and the exact drawing number with its revision.

Markup or margin: the percentage trap

Markup = (price − cost) ÷ cost
Margin = (price − cost) ÷ price
Price for a target margin = cost ÷ (1 − margin)

The same “30%” does not give the same price as a markup or as a margin. Check which one the supplier applies before comparing.

Two published examples

CaseCostPriceTrue margin
30% markup€100.00€130.0023%
30% margin€100.00€142.8630%
Welded frame, 25% markup€1,127€1,40920%

Sources: QuoteBuddy for the first two rows, QuoteBuddy for the third.

A real quote read line by line

Here is the quote for an S275 steel welded frame published by QuoteBuddy, with what to check on each line.

LineAmountWhat to check
Material€242Net weight, waste rate (12%) and price per kilo.
Sawing and drilling€165Hours and hourly rate: 3.0 h at €55.
Welding and prep€330Largest labour item: 5.5 h at €60.
Assembly and fit-up€138Hours and rate: 2.5 h at €55.
Blasting and paint€162Area (9 m²) and number of coats.
Transport€90Local flat rate: included or not in the other quotes?
Cost€1,127Sum of the lines.
25% markup€282That is 20% margin on the price.
Price€1,409Selling price of the frame.

The five most common quoting errors

  • Missed feature: a counterbore, a thread, a second op left out of the price.
  • Misread tolerance: a tight bore quoted as a general tolerance.
  • Stale input: last quarter’s material price or hourly rate.
  • Wrong batch math: setup spread over the wrong quantity.
  • Markup and margin confused: one applied instead of the other.

Source: QuoteBuddy.

How can you reduce the cost?

  • Ask for the breakdown: material, hours per station, rates, fixed costs, margin.
  • Send a complete drawing with its revision to avoid missed features.
  • Ask for several quantities in the same RFQ.
  • Compare like for like: same incoterm, same inspection, same packaging.
  • Rebuild the price to know which line to negotiate.

What should you check in a quote?

  • The drawing number and revision quoted.
  • The price at each quantity and what it includes.
  • The non-recurring costs and tooling ownership.
  • The validity, incoterm and lead times.
  • The markup or margin applied.

Sources

  • Projects House, “How to Read a Manufacturing Quote and What Must Be in It”, accessed 27 September 2026.
  • QuoteBuddy, “Reduce Quoting Errors: 5 Places Quotes Break”, 27 June 2026.
  • QuoteBuddy, “How to Quote Structural Steel Fabrication: A Complete Cost Guide”, 30 July 2026.

Frequently asked questions

The price at several quantities and what it includes, validity, itemised non-recurring costs, tooling ownership, lead times, incoterm, quality commitments and the exact drawing reference.

Markup is calculated on cost, margin on price. According to QuoteBuddy, a 30% markup on €100 gives €130, or 23% margin; a 30% margin needs a price of €142.86.

Projects House considers that two to three trial iterations should be included before revisions become chargeable.

QuoteBuddy lists five: a missed feature on the drawing, a misread tolerance, a stale input, setup spread over the wrong quantity, and markup confused with margin.

Bring them to the same scope (quantity, incoterm, inspection, packaging), check the breakdown line by line, then compare the margin actually applied.

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