Custom could mean a lot of things. Do it all the time, it becomes standard. Never done before, it’s custom.

For this context, let’s look at custom from the panel builders view, not the end application. The custom system will be ‘Engineered to Order. Engineering time is quoted on the job. It also doesn’t roll down the line exactly like the previous (or next panels).

We split these custom categories into two.

The Two Types of “Custom” (And Why Their Margins Differ)

The Domain Specialist (Configured ETO): If a panel shop builds custom municipal water/wastewater packages every week, every panel is technically engineered-to-order, but the shop is building from a reservoir of institutional knowledge and precedent designs. The estimators know the pitfalls, the shop floor staff know the component quirks, margins are protected.

The Clean-Sheet Builder (True Prototype ETO – First-of-Kind): When a shop bids on a one-off machine architecture or an unfamiliar industry spec, the build requires an R&D effort. This is where unbilled engineering hours, scrap materials, and test-bay delays could eat project margin.

Standard panels generally have: off-the-shelf parts, automated wire machines, quick assembly, and rapid cash flow. Custom panels break from that. When a shop loses money on a custom build, it is usually not material costs—it is generally operational costs.

Where the Margins Get Burned

1. Upfront Design & Quoting

• Unbilled Engineering: Standard jobs use proven drawings. Clean-sheet custom jobs require real engineering time upfront just to model clearances, run thermal calculations, and verify UL 508A Short-Circuit Current Ratings (SCCR) before anyone orders a single part.

• Customer Vendor Lists (AVLs): When a spec forces a builder to use an unfamiliar vendor list, they lose their bulk volume pricing and get saddled with long-lead items they can’t easily swap out.

2. Cash Flow & Procurement

• Tied-Up Capital: Builders cannot rely on shelf stock. The Bill of Materials often includes high-dollar, non-returnable components—specialty communication gateways, custom-punched enclosures, or large breaker accessories—that tie up cash while waiting on late deliveries.

• Milestone Billing Delays: Standard panels get invoiced the day they ship. Custom jobs often trap final payments behind submittal approvals, change orders, and witnessed sign-offs.

3. Shop Floor Costs

• Tough Fabrication: Machining 316 stainless or punching cast-aluminum NEMA 7/9 explosion-proof enclosures destroys standard tooling and slows production to a crawl.

• Manual Muscle: Custom design may have parts that have to be fabricated.  Technicians may have to cut, bend, deburr, and torque things manually.

• Engineering Interruptions: Wire technicians cannot run on autopilot. They might need design engineers out on the floor redlining drawings and sorting out physical clearance clashes.

4. Testing & Floor Space Lockup

• Test Bay Deadlock: A standard panel takes an hour to test and crate. A custom multi-door lineup can hold a high-voltage test bay hostage for weeks during customer-witnessed Factory Acceptance Testing (FAT).

• Documentation Overhead: Custom builds demand massive paperwork packages—point-to-point check sheets, torque logs, and detailed QA records.

Bottomline:

Custom panels can bring in higher profits, but the risk profile is higher. The key is knowing which type of custom job you’re bidding. Building a familiar system is great business; taking on a clean-sheet prototype without pricing in the engineering, floor labor, and testing will eat into margin. It can be done, it just requires more research, background knowledge and up front planning.