Machining small parts is not machining scaled down. Below a certain size the cutting itself becomes the easy part and everything around it becomes hard: holding the part without deforming it, seeing what you are doing, measuring what you made, and getting finished parts out of a machine without losing them.
Tools, speeds and breakage
Small cutters need very high spindle speeds to reach a sensible surface speed, and machines with high speed spindles are a different class of equipment. A tiny end mill has almost no strength, so depth of cut and feed per tooth are very small, and tool breakage becomes a routine event to be planned for rather than an incident. Tool life monitoring matters more here than anywhere else.
Workholding without crushing
A vice that would barely mark a normal part will crush a small one, and the cutting forces are so small that friction alone often suffices. Small parts are commonly held on vacuum chucks, in wax or low melting alloy, in purpose made soft jaws, or left attached to the stock by small tabs and separated at the end. Every one of those is fixturing work the quote has to carry.
Inspection you can actually perform
A micrometer is not going to measure a feature a fraction of a millimetre across. Optical comparators, vision measuring systems and small probe coordinate measuring machines are what small part work is inspected with, and their availability is a genuine question to ask a shop. If the tolerance cannot be proven, it cannot be sold.
Handling, deburring and losing parts
Burrs on a small part are proportionally enormous and cannot be filed by hand. Deburring is done by tumbling, thermal or electrochemical methods, or under a microscope. Parts have to be collected in a way that keeps them separate from chips, counted, and packaged so they are not lost. On very small parts this handling can genuinely exceed the machining cost.
Questions people ask about small part machining
What makes small part machining expensive?
Not the cutting. Fixturing that does not deform the part, inspection capable of measuring it, deburring and handling are where the cost sits.
Do small parts need special machines?
They need high spindle speeds to reach sensible surface speeds with tiny cutters, and often specialist workholding, so not every shop is equipped for it.
How are tiny parts held?
Vacuum chucks, wax or low melting alloy, purpose made soft jaws, or leaving the part attached to the stock by tabs and separating it at the end.
How are small parts deburred?
By tumbling, thermal or electrochemical deburring, or manually under a microscope. Hand filing is not viable at that scale.