NRE (non-recurring engineering)
also: NRE · one-time costs · tooling costs
One-time costs to develop a product and prepare it for production, such as design, tooling, fixtures and certification, as distinct from per-unit costs.
NRE covers everything you pay once regardless of volume: engineering time, prototypes, molds and dies, test fixtures, programming setups, certification testing and production line setup. Recurring cost is what each unit costs to build.
Factories and suppliers often quote NRE separately; some offer to amortize it into the unit price instead, which looks cheaper upfront but costs more over time and ties you to that supplier.
Where it bites: underestimating NRE, especially certification, tool modifications and fixtures, is a common reason companies run out of money between prototype and production. Unit-cost estimates that ignore NRE mislead pricing decisions at low volumes.
Founder takeaway
Keep a separate NRE budget with contingency for respins, tool changes and failed certification tests, and model unit economics with NRE spread over realistic early volumes.
engineer review pending