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The verdict is clear: radio frequency identification (RFID) is a wise investment for smarter asset management. What’s less obvious, however, is the average RFID cost.
When it comes to supply chain and inventory management, an RFID system offers efficiency, accuracy, and automation. But before making the switch, it’s essential to break down total RFID costs — because the price tag goes beyond the asset tag.
A full setup includes RFID readers, supporting hardware, and ongoing maintenance expenses. Factoring in all elements of RFID implementation ensures your budget covers more than just the basics.
Understanding upfront cost considerations, from RFID tag types and frequency bands to system components, helps you invest confidently. Let’s break down the average cost of RFID technology, plus the total price for system implementation.
Main Takeaways from This Article:
- RFID technology consists of tags, RFID readers, and asset management software for tracking and automation.
- RFID tag cost varies based on application, frequency bands, and type, from passive RFID tags to active tags.
- Beyond RFID hardware, businesses must factor in implementation costs, licensing, and maintenance costs when budgeting.
- RFID costs are higher than barcodes upfront but offer long-term efficiency and accuracy in inventory management.
- Choosing the right system depends on cost considerations, tracking needs, and future scalability.
What Is an RFID Tracking System?
An RFID tracking system is a technology-driven solution designed to automate inventory management, improve supply chain management, and track critical assets across industries, including healthcare, manufacturing, and retail.
It uses RFID technology to track and monitor fixed assets — physical items like equipment, tools, and inventory — without requiring line-of-sight scanning.
At its core, the tracking system relies on RFID tags embedded with an RFID chip that stores data. These tags transmit signals to RFID readers, which capture and process the information in a tracking platform. This allows businesses to asset inventory in real-time, increase accuracy, and simplify auditing processes.
By reducing manual tracking and minimizing errors, RFID systems enhance operational efficiency. The next step? Understanding the tags that make it all possible.
What Are RFID Tags?
RFID tags are small electronic devices that store information and use radio waves to communicate with other devices — hence the name (RFID is short for radio frequency identification). The RFID chip inside can store up to 2 kilobytes of data, including the serial number, manufacturer details, and detailed product history.
RFID tags can be placed on almost any fixed asset, from machinery to computers, with readers in fixed locations. The data transmitted from tag to reader is typically stored in a computer system or software, so users can access asset information quickly and easily.
RFID tags can be used in various applications, including inventory, asset management, and payment systems. One of the benefits of using RFID tags compared to an alternative like barcode stickers is that they can be scanned without being visible, and you can scan multiple tags at once.
While RFID tags don’t need to be visible to work, using a consistent placement system makes sense. This will make it easy to ensure each asset is tagged appropriately, and that tags can be removed or replaced with ease.
Like barcodes and other asset-tracking solutions, RFID systems use scanners and software to read and store data. But unlike other asset tracking solutions, RFID tags contain microchips — which can make them more expensive. That doesn’t make them unpopular, however. The RFID market is set to be worth $16.09 billion by 2028.
Types of RFID Tags
There are three types of RFID tracking systems:
Active RFID Tags
Active RFID tags come with an RFID chip and their own power source (usually a battery), transmitting a continuous signal. These tags monitor processes in real-time (think tracking a vehicle) and can transmit a range of about 150 meters or 500 feet.
Passive RFID Tags
Passive RFID tags don’t have an internal power supply. Instead, they are powered by an antenna or RFID reader. This means the range is shorter, but they also tend to be cheaper. You can add or remove passive RFID tags as often as you wish, which makes them more common in inventory tracking.
Semi-Passive RFID Tags
Semi-passive RFID tags use a combination of both technologies. They have an internal battery, an antenna, and an RFID chip. You get a smaller signal range than active tags, but they allow for real-time monitoring. These tags tend to be used when monitoring the environment, like in a temperature-controlled area.
RFID Frequency Types and Their Impact on Cost
RFID systems operate within different frequency bands, or ranges of radio waves. The three main types — low frequency (LF), high frequency (HF), and ultra-high frequency (UHF) — each serve different applications due to their separate read ranges, data speeds, and ultimate RFID tag costs.
LF RFID technology (30 kHz-2300 kHz) has the shortest read range of up to six inches and slower data transfer. It’s ideal for asset identification in animal tracking as well as access control and keyless entry. Because LF RFID tags have a limited range, they typically cost less than higher frequency solutions.
HF RFID solutions (3 MHz-30 MHz) offer a longer read range of up to 18 inches. With faster data speeds, HF RFID is commonly used for contactless payments, supply chain tracking, and equipment inventory in medium-sized facilities. It balances affordability with performance, with moderate RFID tag costs compared to other frequencies.
UHF RFID technology (300 MHz-3 GHz) provides the longest read range of up to 300 feet with the fastest data transfer speeds. It can also scan multiple items at once, making it the best fit for large-scale logistics and warehouse management. However, UHF RFID requires more advanced infrastructure, making it the most expensive frequency type.
Breaking Down the Types of RFID Costs
To purchase, install, and deploy an RFID tracking system in your warehouse or office takes some investment — but it may not be as much as you think. Below, we break down the common RFID system costs.
RFID Tag Costs
As we have already explained, RFID tags are more expensive to purchase than other asset tracking methods like barcodes because they include a microchip and integrated antenna. But exactly how much an RFID tag will cost will depend on the type of tag you buy and the frequency band it operates on.
Active tags are more expensive than passive or semi-passive tags. These tags can be ten times as expensive as their passive counterparts (think $15 to $50 per tag), but many businesses will accept this cost because of the other cost-saving benefits of active tags that we’ll discuss below.
Passive RFID tags range from a few cents to a few dollars per tag. While this is far more than a barcode sticker, it’s a manageable expense for most businesses. Higher costs apply to tagging metal equipment. Since metal interferes with radio waves, these tags must be specially designed — driving up the price.
Semi-passive tags are the middle ground for businesses that don’t want to allocate too much of their RFID system budget to battery-operated tags but prefer a longer transmission range. These tags range between $5 and $20 per tag depending on features and capabilities, such as battery life.
Beyond tag type, the ultimate RFID tag cost will also depend on the frequency type — the higher the frequency, the higher the cost. Low frequency tags are available for a few cents each, while higher frequency tags range from $0.10 to $10 each. Ultra-high frequency RFID tags typically range from $10 to $20 each.
It’s important to note that many retailers offer volume discounts depending on the quantity purchased. For example, a bulk purchase of 500 items can slice LF RFID tag costs from $0.60 to $0.20. These discounts compound for higher frequency tags, where you can save dollars per item rather than cents.
Approximate total cost: $0.10-$50 per RFID tag; $100-$50,000 for 1,000 RFID tags
Scanner Costs
Scanners are vital to any asset-tracking solution, and RFID solutions are no different. You’ll need a near-field communication (NFC) scanner to read an RFID tag, which activates the tag’s microchip using radio waves. The great thing about scanning RFID tags is that you don’t need the internet to access the information, and tags can be scanned from any direction — even from a distance and behind objects like walls.
A high-end RFID reader will cost between several hundred and several thousand dollars. Bear in mind that active RFID scanners are more expensive than passive scanners.
Of course, you’ll need more than one reader, too. If you want to automate your RFID tracking system as much as possible, you’ll need a dense network of readers and will have to budget accordingly. For example, you could need as many as one RFID reader at every entrance point across your warehouse or workspace.
Approximate total cost: $100-$5,000 per RFID reader; $1,000-$50,000 for 10 RFID readers
Software Costs
Forget about spreadsheets and other manual methods of keeping track of your fixed assets. No RFID tagging system is complete without asset management software. It’s the best way to manage data at scale, streamline processes, improve asset visibility, and enhance asset utilization, all while ensuring compliance.
These tend to be cloud-based SaaS platforms that come with a monthly fee. They aren’t expensive — and the benefits far outweigh the cost — but you’ll still need to consider monthly fees. If in doubt, you can use RedBeam’s ROI calculator to estimate how much you can save using our asset management platform.
Approximate total cost: $20-$500 per month; $240-$6,000 per year
RFID Implementation Costs
Some types of RFID systems will need to be installed by an expert. Here, passive systems are more expensive as antennas in each tag will need to be directed and tuned according to scanners. This can take time and requires several connectivity tests to ensure the system works properly.
Active RFID tagging systems tend to be much cheaper in this respect. Anyone can install them (but it’s usually an IT team member) in less than a day. With active RFID tags, you don’t need to worry so much about the placement or tuning of the tags.
Approximate total cost: $2,000-$15,000
Ongoing License Costs
Some RFID systems, especially passive ones, require ongoing licensing costs to contribute to support and system upgrades. These can become prohibitively expensive and must be considered carefully when choosing between an active and passive system. For example, you may be put off by the cost of active RFID tags initially, but ongoing licensing costs can quickly make passive systems more expensive than their active counterparts.
Approximate total cost: $100-$500 per year
Maintenance Costs
There are small ongoing maintenance expenses that come with both active and passive RFID tags. For instance, equipment can get dislodged or go offline, which is more common with passive systems than active ones. That’s because these systems tend to be larger, have complex networks, and be at greater risk of being bumped.
Some RFID tags (mostly active ones) include batteries, which means proactive monitoring and replacement is necessary. You'll need to factor the cost of batteries into maintenance costs if they can’t be recharged, too.
Approximate total cost: $1,000-$10,000 per year
The Total Cost of Implementing RFID Technology
Investing in an RFID system requires careful cost planning. Let’s say you need 1,000 tags. Low frequency passive tags will cost around $100, while ultra-high frequency active tags or specialized metal tags can run closer to $50,000. For this estimate, we’ll meet in the middle and assume $10,000 for RFID tag costs.
Expect to pay approximately $3,000 for a high-end reader, with higher costs for advanced features or multiple scanners. Asset management software typically costs about $1,000 per year. On top of that, implementation costs for setting up the system will average $8,000, while licensing and maintenance costs add another $5,000 annually.
In total, you’re looking at $27,000 to implement a new asset tracking system — but remember, this is just an estimate. Costs vary based on tag type, the number of readers, and system complexity. Lower-frequency passive tags and fewer readers can reduce expenses, while metal or UHF RFID tags will push costs higher.
To budget effectively, consider your tracking needs and future scalability. Investing in an RFID system with higher upfront costs now can minimize upgrades later, ensuring long-term efficiency without unnecessary spending. A well-planned system improves asset visibility and delivers a stronger return on investment.
Maximize Your Asset Tracking ROI with RedBeam
RFID tracking is one of the best ways to effectively and efficiently manage your assets at scale. These tags may look expensive, but they can offer significant benefits and cost savings in the long run.
Whether you want to invest in RFID tags or use a more cost-effective solution like barcodes or QR codes, RedBeam is here to help. Our asset tracking software can help you streamline and automate your asset management process regardless of which tagging method you use — saving you time and improving your bottom line.
Try it now for free.
FAQs
How Do RFID Tags Compare to Barcodes?
Barcodes and QR codes are widely used for asset tracking because they’re inexpensive and easy to print. They require direct line-of-sight scanning, meaning each code must be manually scanned, which can slow down workflows. Barcodes can also wear out or become unreadable over time.
RFID, on the other hand, enables bulk scanning without direct visibility, making it much faster for tracking large inventories. While an RFID system costs more upfront, it offers automation, durability, and real-time tracking, making it ideal for businesses with high-value assets or complex logistics.
Is RFID Cheaper than Barcode?
Barcodes are significantly cheaper, with labels costing just a few cents each. An RFID system costs more upfront, with specialized tags and readers adding to expenses. However, RFID offers cost savings in the long run by reducing manual labor, improving inventory accuracy, and preventing asset loss. If you need real-time tracking and efficiency, RFID may justify the higher initial investment.
How Long Do RFID Tags Last?
RFID tags can last anywhere from a few years to a few decades, depending on the type. Passive RFID tags have no battery and can function for 10-20 years, while active RFID tags with batteries may last 3-5 years before needing replacement. Factoring in ongoing maintenance — such as replacing damaged or expired tags — as well as the impact of environmental factors like extreme temperatures helps estimate long-term costs.
How Do I Pay for RFID Tags?
Most vendors sell RFID tags individually or in bulk, with volume discounts available. Some providers offer financing or leasing options for full RFID implementation to spread out costs. Asset management platforms like RedBeam also include asset tags in subscription costs.
Can I Install RFID Myself?
Basic RFID setups, like handheld scanners and simple tracking, can be installed in-house, especially if you have a robust IT department. However, larger systems with fixed readers and integrated software often require professional setup. Improper installation can lead to poor read accuracy and coverage gaps, so consulting an expert may be worth the investment.
