Setup cost: A setup cost is the one-off cost of preparing a machine and a job before the first good part is made, charged once per batch however many parts follow.
Before a machine makes the first good part, someone has to prepare it. On a CNC mill that means loading tools, fitting the fixture, setting work offsets and proving the program. On a 3D printer it means slicing, preparing the build plate, loading material and checking the first layers. All of that time is paid for once per batch.
Because the setup cost is fixed, it is spread over the quantity, which is why unit prices fall as batches grow.
Example: a milling job has 90 minutes of setup at €60 an hour, so €90. For 1 part, setup adds €90 to the unit price. For 10 parts, it adds €9 each. For 100 parts, €0.90 each.
Setup cost is often confused with NRE. NRE is a one-off cost for the whole project (programming, a custom fixture, a mould) that is not repeated on a re-order. Setup is repeated every time the job is run. It is also not the same as a minimum order value, which is a floor on the order total.
The setup cost is the main reason quantity breaks exist. For how to estimate it on a mill or lathe, read CNC setup time.
Go deeper: Set-up time in CNC: the hidden cost in small batches