We Quoted 5x Their Current Supplier. We Lost, and It Was the Right Result.
A family-owned American manufacturer of fluid control equipment found us on Facebook and sent a drawing. Our quote came back roughly five times what their existing supplier charged. We didn't win the work. We did figure out exactly why the gap existed — and told them to stay where they were.
A Number That Didn't Make Sense
The company is a family-owned, mid-sized American manufacturer that has been building fluid control equipment for more than twenty years. Not a startup, not a hobbyist — people who know their products and their costs.
They sent a drawing. We quoted it. Our price came back at roughly five times what they were paying their existing supplier.
Five times is not a rounding difference. It's not "one shop is a bit more efficient." At that size of gap, either we had badly misread the drawing, or something structural was going on that neither of us was seeing yet. We asked them to walk us through it.
They were patient about it, which I want to acknowledge — most buyers would have read a quote like that, concluded the new shop was taking the mickey, and stopped replying. Instead we went back and forth across several rounds, comparing assumptions, until the picture came into focus.
What We Found
Three things, and they don't add together — they multiply.
1. Ten years of the same part
Their supplier had been making these parts for over a decade. That means the programming is done, the prove-out is done, the scrap is done. Every mistake that can be made on a part has already been made and paid for, years ago. When we quote it, we're pricing in the first-article risk, the trial cuts, the offsets that need adjusting — all real costs, all of which their supplier stopped paying a long time ago.
2. Tooling and fixtures built specifically for these parts
This was the big one. Over ten years their supplier had made a series of cost-saving improvements to jigs, fixtures and tooling, each one designed around this customer's specific geometry. A fixture that takes a week to design and a few hundred dollars to build might save thirty seconds a cycle. Over ten thousand parts a year, for ten years, that is a staggering amount of money — and none of it shows up on the drawing.
We were quoting the part with general-purpose workholding, because that's all we had for a job we'd never run. Same part, same print, completely different amount of work.
3. Every order is a large one
They don't order forty. They order in production quantities, every time. We covered what that does to unit cost in our piece on why small batches cost more per piece, and the same maths was running against us here: our quote assumed a run length an order of magnitude smaller than what their supplier was spreading setup across.
| Factor | Their supplier (10+ years) | Us (first time seeing it) |
|---|---|---|
| Programming | Written, proven, stored | From scratch, priced in |
| Workholding | Dedicated fixtures, paid off years ago | General-purpose vices and jaws |
| Cycle time | Optimised across thousands of runs | Conservative estimate, no data |
| Scrap / prove-out risk | Zero — absorbed years ago | Priced into the quote |
| Run length | Large production quantities | Quoted at their stated quantity |
| Combined effect | These multiply, not add — which is how you get to 5x | |
Once it was laid out like that, the answer was obvious and slightly embarrassing: their supplier was cheaper because they had earned it. A decade of incremental improvement, paid for and amortised, is a real competitive advantage. It isn't luck and it isn't margin-padding on our side — it's accumulated work.
We told them exactly that. Our price was genuinely higher, here is the arithmetic of why, and on this part you should stay where you are.
We Didn't Get the Order. We Got Something Else.
The deal didn't happen. That part of the story is short.
What did happen is that he kept sending drawings. Not to buy — to talk. We still go back and forth on technical questions, geometries, tolerances, what he's seeing in production and what we'd try.
I'm not going to dress this up as a clever long-game sales tactic, because it isn't one and I don't know that it will ever turn into an order. The honest reason is simpler: we're both people who like this stuff. Two engineers looking at a hard-to-machine feature and arguing about the best way to hold it is genuinely enjoyable, and it costs neither of us anything.
If there's a lesson in it, it's that not every enquiry has to convert for the conversation to be worth having. But I'd be lying if I said that's why we do it.
When You Should Not Switch Suppliers
If a new shop quotes you dramatically lower than your current one, the tempting read is that you've been overpaying for years. Sometimes that's true. Often it isn't, and the way to tell the difference is to ask what your current supplier has invested in you.
Questions worth asking before you move
- Have they built dedicated fixtures for our parts? If yes, that investment is already paid off and baked into your price. A new supplier has to rebuild it, and you pay for it in the first runs.
- How many times have they run it? A process that's been through fifty production runs has a yield and a cycle time that no first attempt will match.
- What quantity is the new quote based on? Compare like for like. A low unit price that assumes ten times your order quantity isn't a lower price.
- Is the lower quote suspiciously low on a complex part? Sometimes it means the shop hasn't priced in the programming and prove-out it's about to eat. Those orders tend to run late, or come back with problems, or get quietly re-quoted after batch one.
When switching does make sense
- The design is changing anyway — the old fixtures are obsolete regardless, so the switching cost is already sunk.
- Reliability or communication has slipped, and you're spending management time on it.
- They lack a capability you now need: 5-axis, tighter tolerances, a different material, more capacity.
- You need a second source for risk reasons, and you're willing to pay for the ramp-up once.
None of that applied to the situation above, which is why the right answer was the one we gave.
Why Publish a Deal We Lost?
Because the alternative is a website full of wins, and nobody who runs a machine shop believes that.
Every supplier's site says the same things — quality, delivery, competitive pricing, customer satisfaction. It's all true and it's all indistinguishable. What actually tells you something about a shop is how it behaves when the answer is no. We could have told this customer our price was fair and let them draw their own conclusions. We didn't, because it wasn't fair on that part, and saying so cost us nothing but the order.
If you send us a drawing and we're the wrong shop for it, we'd rather tell you in the first exchange than the fourth. It's faster for you, and it's more interesting for us.
Why Quotes Differ
Why can two CNC shops quote the same part five times apart?
Should I switch CNC suppliers if a new one quotes lower?
What is a dedicated fixture and why does it change the price so much?
Is a very low quote on a complex part a warning sign?
Will you tell me if you're the wrong shop for my part?
Send the Drawing and Your Current Price
If you're comparing quotes that don't seem to describe the same part, send us the drawing and, if you're comfortable, the ballpark you're paying now. We'll tell you where the gap comes from — and if we can't beat it, we'll say that too.