I recently dug into cost-structures for sourcing custom metal parts, and I had that familiar “oh-no” moment when I saw how much raw material can dominate—or be squeezed—within the total landed price.
In short: raw material can range from a very large share to quite a modest one, depending on process, volume, alloy, wastage and labour.
Read on—because the rest of this article will help you decode how that percentage behaves and how you should negotiate with your supplier when sourcing from Vietnam.
I often start with a baseline: raw material cost typically accounts for somewhere between 20 % and 50 % of the total landed cost for custom metal parts from Vietnam (for many job shop/machining or medium complexity parts).
That range reflects: cheaper labour, lower overhead in Vietnam vs. high-wage countries; moderate processing; and a standard alloy.
When processing is light (e.g., simple stamping/fabrication) material share can creep much higher (70 %-90 %). One case study of sheet-metal parts showed raw material = 86 % of direct manufacturing cost.
Key Cost Scenarios (Table 1)
| Process Type | Estimated Raw Material Share | Notes |
|---|---|---|
| CNC Machining (aluminum) | 15% – 25% | Lower share due to high labor + machine time |
| CNC Machining (steel) | 20% – 35% | More expensive alloy, moderate machining |
| Sheet Metal (simple stamping) | 60% – 90% | High material-to-value ratio |
| Precision machining + coating | 30% – 50% | Engineering cost + finishing inflate total cost |
In short, the more labor or setup is involved, the smaller material’s share becomes.
Does material % vary by alloy?
Absolutely — changing the alloy changes the cost structure significantly.
Material cost per kg varies widely. High-performance alloys can increase material share unless counterbalanced by complex processing.
For example:
- Aluminum 6061 costs ~$3/kg
- Stainless Steel 304 costs ~$4.5/kg
- Titanium can cost $20+/kg
When the same shape is made from a pricier material, even if everything else remains the same, raw material will take up a bigger slice of the cost pie.
Cost Impact by Material Type (Table 2)
| Material Type | Cost per Kg (approx.) | Typical Raw Material Share | Comments |
|---|---|---|---|
| Mild Steel | $0.8 – $1.2 | 20% – 40% | Common, low-cost alloy |
| Aluminum 6061 | $2.5 – $3.5 | 20% – 50% | Popular in machining |
| Stainless Steel 304 | $4 – $5 | 30% – 60% | Higher strength, more wastage |
| Titanium | $15 – $30 | 40% – 70% | Expensive, often low yield |
Key takeaway: Material share rises with alloy cost unless processing grows in proportion.
How do processing & labour affect raw material ratio?
The more time and labor go into the part, the smaller share material takes in the final price. CNC machining, surface finishing, painting, and multi-step assemblies increase processing cost.
Cost Structure Comparison (Table 3)
| Component | Low Complexity Part | Medium Complexity | High Complexity |
|---|---|---|---|
| Raw Material | 70% – 90% | 40% – 60% | 25% – 40% |
| Machining/Processing | 5% – 15% | 20% – 30% | 30% – 45% |
| Tooling & Setup | 2% – 5% | 5% – 10% | 10% – 15% |
| Inspection & Logistics | 3% – 10% | 5% – 10% | 10% – 20% |
In essence, raw material share is highest when everything else (setup, inspection, machining) is minimal.
Can volume discount change raw material % too?
Yes — higher volumes usually raise the raw material percentage.
That’s because setup and tooling costs are spread across more parts, which reduces the impact of fixed costs per piece.
For example:
- A one-off prototype might show raw material as 20% of cost.
- A batch of 10,000 parts could push material up to 50%–60% of cost.
So the more you buy, the more the cost becomes “just metal.”
Conclusion
Raw material share in Vietnam-made custom metal parts typically ranges from 20% to 80%, depending on process, alloy, complexity, and order size. Always ask for cost breakdowns to verify.
