How to price tolling fees
What to charge to turn someone else’s ingredients into finished units, how to band it by volume, and the costs that quietly do not make it into the quote.
A tolling fee has to cover the hours the line is committed, the labour on it, the changeover either side, your overhead allocation, and a margin. Most quotes that turn out badly missed the changeover or the overhead, not the labour.
Build it per hour first, then convert. Work out the fully loaded cost of an hour on a specific line — operators, supervision, utilities, depreciation, an honest slice of overhead — then divide by the units that line genuinely produces in an hour after downtime. That gives you a floor. What you quote is that floor plus margin, and knowing the floor is what lets you negotiate without discovering afterwards that you sold below it.
Then band it. Volume bands exist because setup is fixed: the same clean, the same changeover, the same first units to waste whether the run is 5,000 or 50,000. Bands are how you pass that on honestly instead of pricing every small run as though it were large, or every large run as though it were small.
What to actually do
- Start from a fully loaded hourly costPer-unit is the output, not the input. Working backwards from a per-unit number you hope to charge is how sites end up below their own floor.
- Divide by real output, not nameplateIf the line genuinely does 8,000 an hour rather than 12,000, using 12,000 understates your cost by a third.
- Charge for changeover explicitly, or bake it in knowinglyEither is fine. What is not fine is forgetting it, which is the single most common gap in a quote.
- Set bands where your economics actually changeNot at round numbers. If a run under 8,000 units costs you a disproportionate share of a shift, the band belongs at 8,000, not 10,000.
- Quote the band the brand will actually hitA headline rate at a volume they will never reach wins the quote and loses the relationship on the first invoice.
- Revisit when input costs moveLabour and energy move. A rate card written two years ago is a discount you did not decide to give.
In NextBatch your rate card and its volume bands are yours — you set them, brands see the rate that applies at the volume they are booking, and a bigger run shows its lower unit cost before they commit. They cannot edit it.