Tool amortisation: Tool amortisation is spreading the one-off cost of a mould, die or fixture across the parts it makes, so each part's price carries a share of it.
Instead of invoicing a mould separately, a supplier can divide its cost over an agreed quantity and add that share to the price of every part. The quantity can be the first order, a forecast of several orders, or the expected life of the tool.
What it means for the price
Amortisation makes the price per part very sensitive to quantity: the smaller the run, the bigger each part’s share. It also carries risk. If the buyer orders fewer parts than forecast, the supplier is left with unrecovered tooling, so contracts usually say what happens then. Showing the tooling cost and the per-part price without it lets a buyer compare suppliers fairly and see the quantity breaks clearly.
Example: a €9,000 tool spread over 3,000 parts adds €3.00 to each part; spread over 30,000 parts it adds €0.30. The figures are an example.
Common confusions
Amortising a customer’s tool is not the same as depreciating the shop’s own machines, which belongs in the machine hour rate. Nor is it a setup cost, which recurs with every batch. Read what drives injection moulding cost.
Go deeper: Injection moulding cost: tooling, cycle time, resin and the break-even