The Cost of a Die Cut

“Hi, I’d like to order 1,000 custom die cut pieces.”

“Great! That’ll be $5,000.” 

In a perfect world, ordering from a converter would be effortless. However, ordering custom parts is more complex. Many factors influence the final cost, so understanding how your converter determines value is crucial to grasping the pricing structure.

You might be an expert on your product, but it will benefit you to learn what to expect and how die cutting costs depend on materials, configuration options, and machine time.

Die Cut Adhesive Price Range

Converters are often requested to provide an average cost or a budget price. Unfortunately, there are so many elements in converting quotes that each estimate will look different than the last!

These are entirely custom parts, so we’ll focus on how your die cut needs determine the final price:

1. Tooling cost
2. Cost of materials
3. Machine run time/Labor cost 

It may not look complicated on the surface, but our estimators can confirm that each category has several price points and details to iron out. 

Let’s break it down.

Tooling, material, and labor costs are all essential to running production. Yet, these costs affect a range of specific factors to varying degrees. 

For instance, a higher production volume allows you to buy in bulk, making the material cost cheaper. As a result, production volume has a major impact on material cost. On the other hand, the tooling cost remains the same throughout a job, so production volume has a negligible impact on tooling.

As we review the three major price points, you'll understand the costs behind each factor that influence how a converter determines a quote.

1. TOOLING COST

“But wait,” you might be thinking, “Don’t you already own the machines?”

Your Tooling Cost is (sadly) more complicated than owning a magical machine press that can spit out any die cut. Almost every job requires its own unique die to cut the pieces for the desired part. Think about cutting dough with a cookie cutter: you can’t use a star-shaped tool to make gingerbread men.

Your design will affect the tooling cost more than the material choice. Die cut tools with simple designs cost less than multi-layered, multi-material tools with various holes or slits. 

The number of layers and the complexity of the part you’re building are both traits of Part Geometry. 

• Part Geometry encompasses a part's size, shape, functional features, layers, and design intricacies. 

Configuration options are parts or processes that converters can apply to a die cut press. Depending on the type of part you order or the material you plan on using, you might ask for more advanced processing methods. 

Advanced processing methods for configuration options include extra lamination layers, using multiple materials, multiple colors, or tighter tolerances. Configuration options can add up over time, and if you’re trying to save money, you might want the most straightforward die cut configuration possible.

Let’s say you needed two parts of the same geometrical shape and size, but one of them was thicker or made from a different material entirely. You might need to find an additional die to cut each layer, increasing your tooling cost. 

The simplest tooling set-up for rotary die cutting consists of one die and one material. 

Another way to cut tooling costs is to use a laser or digital knife. A laser doesn’t require extra parts to function—it’s just a laser. Laser cutting can be used instead of a die to achieve tighter tolerances. However, you’ll need to check and ensure that laser die cutting is viable for your chosen material. Digital knife cutting is a method Strouse uses for smaller quantities that also doesn't require tools.

2. COST OF MATERIALS

Material costs make up a large part of your final pricing, so it’s essential to use converters that source your materials most efficiently. On average, material costs make up 70-80% of total costs. For some applications and startups, this is an enormous financial burden.

Because Strouse builds custom parts, it doesn’t make sense for us to stock up on every type of adhesive tape (especially considering tape expires). As a result, we’re forced to work around suppliers’ Minimum Order Quantity (MOQ), which determines the amount of product we have to buy for them to sell.

Suppliers generally have a minimum order quantity because their adhesive rolls are pre-made in 48-, 54-, or 60-inch standard lengths. The MOQ is in their best interest to minimize their set-up times. Fixed costs are associated with firing up machines, so they have to make it worthwhile.

Early in your product’s lifecycle, the amount of material included in the MOQ is often more than what we need to build your order. In these cases, we either factor it into the total material cost or use a smaller distributor at a higher price point.

3. MATERIAL WASTE

Die cutting a roll of material creates waste, but you might not realize how quickly the waste adds up.

Every stage of production generates waste. For example:

1. Set-up tests
2. Mining tape is used to help peel adhesive layers
3. Leftover material from production 

Although material waste is inevitable, we still want to reduce setup waste as much as possible. MORE WASTE = LESS VALUE for your dollar, and we want to help you get as many high-quality parts as possible.

In addition, the type of material you use could increase your final price because it requires more advanced processing methods. Certain materials, like light-sensitive or fully sterile materials, require additional set-up. Multiple or hard-to-cut thick materials might boost the tooling cost for your part. 

If you’re concerned about the price of the suggested material, ask if there are alternatives that fit your specifications.

How Does Labor Time Factor Into My Final Price?

Labor time often makes up a large portion of the final estimate; for some, it might even be a decisive price point. Yet, it’s worth noting that this is standard for converting. Your labor time costs include the machine set-up, testing, production/run time, and breakdown. 

Complex parts are challenging to build, making it tougher to assemble the machine press. One job might only need a flatbed press, whereas another may require three rotary dies and a laser.

Although a simple job might only take an hour to prep, a complicated top-tier job could take 20+ hours in press assembly. After more than 37 years in the converting industry, Strouse can confidently determine how long it will take to assemble the press so we can get your project up and running. 

This set-up and assembly process falls under the cost of labor time, and it’s determined based on the complexity of the part geometry and the production volume (which determines the amount of time the die cut press is running). 

PRICE PER PART (PPP)

Certain costs are built into our die cut production. You can divide the production process into four primary stages:

1. Set-up 
2. Testing
3. Run time
4. Breakdown

Three of these stages require very hands-on labor from our experienced operators, so we have fixed costs for the time spent on machine set-up, testing, and breakdown regardless of how many parts you order.

By now, it’s possible you’re wondering, “Why do higher quantities give me a lower price per part?”

The Price Per Part (PPP) mainly depends on set-up costs and the number of units ordered. The more parts we produce, the more you benefit from your initial set-up cost. 

For example, labor for set-up, testing, and breakdown (fixed costs) is 5 hours, and you want quotes for 1,000, 10,000, and 100,000 parts. 

If 1,000 parts take 30 minutes, our run times are 30 minutes, 5 hours, and 50 hours.

Total production hours are 5.5, 10, and 55 hours respectively. The difference in price per part becomes clear when we divide the number of parts by total hours to get parts per hour, which are 181.82, 1,000, and 1,818.18 parts per hour. 

As a result, the 100,000-part quote will have a much lower PPP than the 1,000-part quote.

Finally, converters often calculate the price per part on a scale of thousands, meaning they might give you the price per thousand parts (M) rather than the exact unit price. 

PRICE PER PART BY PACKAGING

The packaging style of your part affects the calculation of your quote based on the number of components per bag or kit. Bags might have thousands of parts per bag, and a kit has multiple parts, with up to hundreds of each part per kit.

If your parts are divided into bags or kits, this could change how your pricing is formatted. The chart demonstrates a breakdown of how different packaging styles can affect the pricing layout of your quote.

100 kits cost $100 each

1,000 parts per kit

1,000 parts x 100 kits = 1,000,000 parts

100 kits x $100 = $10,000

$10,000/1,000,000 parts = $0.01 per part

The final cost is 1 cent per part

Suppose 100 paint masking kits cost $100 each. We know that 100 kits cost $10,000 in total. 

If every kit has 1,000 parts, we can deduce that 100 kits hold 1,000,000 parts. By dividing the total cost by the total number of parts, we get a value of $0.01 per part.

Your parts only cost one cent each, but because they’re packaged into hundred-dollar kits, the price per part may appear high at first glance. 

Again, producing more parts will offset fixed production costs. Larger orders have a lower price per part because the number of parts eventually outweighs the labor cost.

What You Should Know Before Ordering Die Cut Parts

Simplifying the quote process benefits everyone involved. 

You may be wondering, “What can I do to advance my operation?” Generally speaking, the more information you provide about what type of product or service you’re looking for, the faster we can get it in your hands.

SOURCING MATERIALS

Sourcing materials has become one of the longest tasks for a converting team, and it occurs before the start of the project. 

Here’s what slows the process down: WE DON’T WAREHOUSE MATERIALS THAT AREN’T ALREADY SOLD.

After over 37 years of converting, we’ve worked with tens of thousands of different materials, many of which would expire due to the shelf life if fully stocked on our shelves. We don’t warehouse, so the materials we use must be delivered to us first. Yet, material lead times can vary widely, from 2 days to 6 months. 

Your quote will say how long it should remain valid, but due to the ever-changing cost of materials, the sooner you respond, the more accurate your estimate will be. 

GETTING A QUOTE

One question triumphs above all others during a converter’s initial valuation: Do we have the capabilities to do this? 

Before you get a quote, it’s essential to know what you’re looking for and the information you can provide so you can improve the process. If you ask your converter to help you choose a material, they will need to know what the part DOES first. 

Will it be exposed to high temperatures? How long will it last? 

Your project is so familiar that you might not think twice about these overarching questions. However, they’re a quick and straightforward way for us to understand your design.

On the other hand, perhaps you already have a material in mind and want to make parts ASAP. Including a drawing or sketch of what you’re looking for (with labeled dimensions!) can help expedite the process. If you’re unsure about the drawing, start by submitting your sketch, and we’ll assist you with your diagram as best as possible.

Purchasing at this scale can be an overwhelming task. Yet, now that you’ve learned more about how the pricing breakdown works, you can understand how to get the best value for your order. That’s why we want to ensure you have all the resources you need before making a big decision. 

With all that’s been said, you’re now armed with the knowledge of how die cut costs accumulate, and you’re ready to ask for the quote you need.

When searching for die cut parts, you’ll want to find a converter who suits your project and remains attentive throughout pricing and production. Consider getting a quote from Strouse, and we’ll keep you well-informed and on time. 

If you have any questions, you can check our Learning Center for more information on die cutting or contact us and we’ll follow up shortly. 

 

 

Originally published: November 29, 2022