Open-Book Costing with Thai Factories: 2026 Guide
Buyers from high-wage economies often negotiate a single number and then wonder why the second quote in year two rises 9%. Open-book costing changes the conversation: you agree on the cost structure, not the headline price. For anyone weighing whether to import or manufacture from Thailand, it is the most reliable way to keep pricing honest over multiple years.
What an open-book cost sheet contains
| Element | Typical share (moulded consumer good) | What to verify |
|---|---|---|
| Raw material | 35–55% | Resin grade, kg per unit, scrap allowance |
| Direct labour | 8–15% | Cycle time, operators per machine, shift pattern |
| Machine burden | 10–18% | Tonnage, hourly rate, utilisation assumption |
| Secondary process | 5–15% | Printing, assembly, testing |
| Packaging | 4–10% | Carton spec, inner, pallet pattern |
| Overhead and profit | 8–15% | Stated separately, not hidden in burden |
The point is not to squeeze margin to zero. It is to know which line moves when resin, wages or FX move, so an increase can be tested against evidence rather than accepted or refused on instinct.
Should-cost analysis before you ask
Build your own estimate first. Material cost is public: resin and steel indices are quoted weekly. Cycle time can be estimated from wall thickness and tonnage. Thai labour rates are published by region. A should-cost model within 10–15% of reality gives you standing in the negotiation and quickly shows whether a quote is padded or genuinely tight.
Related reading: total landed cost model, cut cost without cutting quality and currency and payment risk.
Making the mechanism contractual
- Index the volatile lines only. Material moves with a named index, with a 3–5% dead band and quarterly review. Labour and overhead stay fixed for twelve months.
- Symmetry is non-negotiable. If resin falls 12%, your price falls too. One-way clauses are the tell of a weak agreement.
- Cap the review frequency. Quarterly is enough. Monthly repricing consumes both teams.
- Define the productivity share. Cycle-time or yield gains found during the year are typically split 50/50 for the first twelve months, then fully to the buyer.
Why factories agree to it
Open-book works because it removes the annual bluff. A Thai factory that can show its structure gets faster approvals, fewer surprise re-quotes and longer commitments. In practice suppliers who resist it entirely are either protecting an outsized margin or do not have a costing system — both are useful things to learn before your first purchase order.
TUSKO builds and holds these cost sheets on your behalf as your single point of contact, and our fee is included in the landed cost of the order rather than charged separately.
Frequently Asked Questions
Will a Thai factory really open its cost sheet?
Established exporters serving European and Japanese customers usually will, especially for programmes above a few hundred thousand US dollars per year. Smaller workshops often cannot because they do not cost at that level of detail.
How do I check the material line is honest?
Ask for kg per unit including runner and scrap, then multiply by the published resin or alloy price for the grade. Weigh a sample yourself. Discrepancies above 10% deserve an explanation.
What if the factory refuses open-book?
Use a should-cost model and benchmark two other quotes instead. You lose transparency but keep pricing discipline, and you can revisit the request once volume grows.
Does open-book costing lower price immediately?
Not always on day one. Its value shows in years two and three, where indexed reviews and shared productivity gains typically outperform annual haggling by several percentage points.