How Do I Price My Manufacturing Services?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 6
- 3 min read
If you're starting or growing a manufacturing business, one of the most important decisions you'll make is how to price your services. Whether you specialize in custom fabrication, product assembly, or operate a full-scale production facility, pricing affects your profitability, competitiveness, and long-term sustainability.
At Wexford Insurance, we work with manufacturers across the country to help them protect their operations with tailored manufacturing insurance. But we also understand that pricing is a key part of your business strategy. In this guide, we’ll walk you through how to price your manufacturing services effectively—and how insurance can support your growth.
Why Pricing Matters in Manufacturing
Pricing isn’t just about covering costs—it’s about positioning your business in the market. Set your prices too low, and you risk losing money. Set them too high, and you may lose customers to competitors. The right pricing strategy helps you:
Stay profitable
Remain competitive
Cover operational risks
Invest in growth
Key Factors to Consider When Pricing Manufacturing Services
1. Cost of Production
Start by calculating your total cost of production, which includes:
Raw materials
Labor
Equipment usage
Utilities
Packaging
Overhead (rent, insurance, etc.)
Use a cost-plus pricing model to ensure you’re covering expenses and adding a profit margin.
2. Market Rates and Competitor Pricing
Research what similar manufacturers are charging. This helps you stay competitive and identify pricing gaps in your niche. You can explore industry benchmarks and financial ratios to guide your pricing decisions.
3. Value-Based Pricing
If your manufacturing services offer unique value—such as faster turnaround, higher quality, or custom solutions—you can charge a premium.
Learn how to apply value-based pricing effectively.
4. Volume and Scalability
Consider offering tiered pricing based on order volume. Larger orders may justify discounts due to economies of scale.
For inspiration, check out innovative pricing strategies used by successful businesses.
5. Risk and Insurance Costs
Don’t forget to factor in the cost of business insurance. Protecting your facility, equipment, and employees is essential—and those costs should be reflected in your pricing.
At Wexford Insurance, we help manufacturers find coverage for:
Pricing Models for Manufacturing Businesses
Here are a few pricing models commonly used in the manufacturing sector:
Time and Materials Pricing – Ideal for custom jobs or prototypes
Fixed Pricing – Best for standardized products
Tiered Pricing – Encourages bulk orders
Subscription or Retainer Models – Useful for ongoing production contracts
Common Pricing Mistakes to Avoid
Ignoring hidden costs like equipment maintenance or downtime
Underestimating labor for complex jobs
Failing to adjust prices as material costs fluctuate
Not including insurance costs in your pricing strategy
Tools to Help You Price Manufacturing Services More Accurately
Pricing your manufacturing services doesn’t have to be guesswork. Today’s manufacturers have access to a range of tools and strategies that make pricing smarter and more data-driven.
1. Manufacturing ERP Software
Enterprise Resource Planning (ERP) systems like Oracle NetSuite or SAP Business One help track production costs, inventory, and labor in real time—giving you accurate data to base your pricing on.
2. Cost Estimating Software
Tools like MRPeasy allow small and mid-sized manufacturers to estimate job costs, manage materials, and calculate margins with precision.
3. Accounting and Financial Forecasting Tools
Platforms like QuickBooks can help you track expenses, forecast cash flow, and analyze profitability—essential for refining your pricing strategy.
4. Industry Benchmark Reports
Use resources like IBISWorld to compare your pricing against industry averages and trends.
5. Customer Relationship Management (CRM) Tools
CRMs like HubSpot or Zoho CRM help you understand customer behavior, preferences, and willingness to pay—valuable insights for value-based pricing.
Final Thoughts
Pricing your manufacturing services is both an art and a science. By understanding your costs, market position, and risk exposure, you can build a pricing strategy that supports growth and profitability.
If you're starting a manufacturing business or looking to scale, Wexford Insurance is here to help. We specialize in manufacturing insurance programs that protect your business and support your success.
📞 Ready to get started?
Contact Wexford Insurance today for a free consultation.
