Buyers negotiate the total and get small concessions. Buyers who negotiate the components get structural ones, because they are proposing changes the supplier can actually act on.
The four parts
- Material. Usually the largest share and the most transparent. It moves with commodity prices and with your specification, not with your charm.
- Labour. Driven by cycle time and by how many manual steps your design imposes. A design change can move it; a negotiation cannot.
- Tooling amortisation. If it is folded into the unit price, you are paying for the mould forever. Separate it out.
- Margin. The only part that is genuinely about the relationship — and usually the smallest.
The question that opens the conversation
« Which part of this price would change most if I changed the design? » It is not an adversarial question, it is an engineering one, and it usually produces a better answer than asking for a discount. Suppliers who see a customer trying to reduce cost rather than squeeze margin tend to help.