Commercial Open Book

We prefer to operate on a Commercial Open Book basis. Suitable margins on materials, stock value coverage, labour rates and required man hours would be negotiated and agreed. We believe that by operating on a Commercial Open Book basis both parties are able to respect the contributions being made and the combined resource of both parties can be employed to drive down bought-in material costs.

The Calculation


The calculation we use is simply:
Bought in materials costs x an agreed % margin + number of man hours x an hourly rate


Margin on Materials

The percentage margin applied to the materials is subject to the following criteria:
  • Volume of units produced per annum
  • The amount of component and finished goods stock we need to hold and over what period
  • The length of the contract
We do not necessarily apply a fixed percentage rate to all of the bought in items. Split rates are frequently agreed with large value items being subject to a reduced percentage. Large value items can also be free issued where no percentage margin is applied.

Labour Hours


The number of hours is calculated and agreed with the customer and generally take into account:
  • Mechanical build hours
  • Electrical build hours
  • Test hours
For one off or low volume Build to Print we can also allocate some labour to project management and the purchasing process. Labour rates are variable and depend on:
  • The skills involved
  • Volume of units produced per annum
  • The length of the contract