What sits inside NRE depends on the process. For injection molding it is mostly the tool build; for castings, dies and patterns; for PCB assembly, stencils, programming, and test fixtures; for machining, fixtures and CAM time; in regulated industries, qualification testing and documentation. During new product introduction, NRE often exceeds the first year of piece-price spend, which is why it deserves the same scrutiny.

Then there is the comparison trap: suppliers structure NRE differently. One bills the tool up front, another rolls it into tooling amortization, a third "waives" it against a volume commitment. Piece prices are then not comparable on their face. A disciplined RFQ asks for NRE itemized and priced separately, and the award math compares total cost at the realistic volume, not the prettiest unit price.

Negotiate what NRE buys, not just the number: how many design iterations, whether prototype runs and first articles are included, who owns the tooling, and what the milestone payment terms are. LightSource extracts NRE line items from supplier quotes automatically, which puts upfront and amortized structures side by side in one total-cost view.