diff --git a/src/PowderCoating.Infrastructure/Services/AiCatalogPriceCheckService.cs b/src/PowderCoating.Infrastructure/Services/AiCatalogPriceCheckService.cs
index 28d7d47..dc13479 100644
--- a/src/PowderCoating.Infrastructure/Services/AiCatalogPriceCheckService.cs
+++ b/src/PowderCoating.Infrastructure/Services/AiCatalogPriceCheckService.cs
@@ -238,6 +238,8 @@ public class AiCatalogPriceCheckService : IAiCatalogPriceCheckService
         sb.AppendLine("- \"medium\" — reasonable assumptions were possible");
         sb.AppendLine("- \"low\" — item is too vague to estimate reliably (e.g., 'Custom Part', 'Job Special')");
         sb.AppendLine();
+        sb.AppendLine("The \"category\" field contains the full path, e.g. \"Cerakote > Firearms\" or \"Powder Coat > Wheels\". Use this to determine the coating process — Cerakote items have a very different cost profile than standard powder coat (different equipment, cure times, and market rates). Price accordingly.");
+        sb.AppendLine();
         sb.AppendLine("If the item already has an ApproximateArea or EstimatedMinutes, use those instead of guessing.");
         sb.AppendLine();
         sb.AppendLine("IMPORTANT: Keep responses concise to avoid truncation. Limit assumptions to 20 words max. Limit reasoning to 25 words max.");
diff --git a/src/PowderCoating.Web/Controllers/CatalogItemsController.cs b/src/PowderCoating.Web/Controllers/CatalogItemsController.cs
index 5eb3ee6..f9c7b22 100644
--- a/src/PowderCoating.Web/Controllers/CatalogItemsController.cs
+++ b/src/PowderCoating.Web/Controllers/CatalogItemsController.cs
@@ -938,8 +938,8 @@ namespace PowderCoating.Web.Controllers
                 r => r.CompanyId == currentUser.CompanyId);
             var report = existing.OrderByDescending(r => r.RunAt).FirstOrDefault();
 
-            var activeItems = await _unitOfWork.CatalogItems.FindAsync(ci => ci.IsActive);
-            ViewBag.ActiveItemCount = activeItems.Count();
+            var pricedItems = await _unitOfWork.CatalogItems.FindAsync(ci => ci.IsActive && ci.DefaultPrice > 0);
+            ViewBag.ActiveItemCount = pricedItems.Count();
 
             CatalogPriceCheckReportDto? dto = null;
             if (report != null)
@@ -990,16 +990,23 @@ namespace PowderCoating.Web.Controllers
 
             try
             {
-                // Load all active catalog items with categories
+                // Load active catalog items with a real price — skip $0 items (placeholders,
+                // category headers, etc.) since there's no pricing to evaluate.
                 var items = (await _unitOfWork.CatalogItems.FindAsync(
-                    ci => ci.IsActive, false, ci => ci.Category)).ToList();
+                    ci => ci.IsActive && ci.DefaultPrice > 0, false, ci => ci.Category)).ToList();
 
                 if (items.Count == 0)
                 {
-                    TempData["Warning"] = "No active catalog items to analyze.";
+                    TempData["Warning"] = "No priced catalog items to analyze. Add prices to your catalog items first.";
                     return RedirectToAction(nameof(AiPriceCheck));
                 }
 
+                // Load all categories so we can build full paths (e.g. "Cerakote > Firearms").
+                // The full path gives Claude the coating-type context it needs — an item in
+                // "Firearms" under "Cerakote" costs very differently than one under "Powder Coat".
+                var allCategories = (await _unitOfWork.CatalogCategories.GetAllAsync())
+                    .ToDictionary(c => c.Id);
+
                 // Load company operating costs
                 var costs = (await _unitOfWork.CompanyOperatingCosts.FindAsync(
                     c => c.CompanyId == currentUser.CompanyId)).FirstOrDefault();
@@ -1012,7 +1019,7 @@ namespace PowderCoating.Web.Controllers
                     Id = i.Id,
                     Name = i.Name,
                     Description = i.Description,
-                    CategoryName = i.Category?.Name ?? "Uncategorized",
+                    CategoryName = BuildCategoryPath(i.CategoryId, allCategories),
                     CurrentPrice = i.DefaultPrice,
                     ApproximateAreaSqFt = i.ApproximateArea,
                     EstimatedMinutes = i.DefaultEstimatedMinutes,
@@ -1083,6 +1090,25 @@ namespace PowderCoating.Web.Controllers
             $"Blaster ${c.SandblasterCostPerHour:F2}/hr | Booth ${c.CoatingBoothCostPerHour:F2}/hr | " +
             $"Powder ${c.PowderCostPerSqFt:F2}/sqft | " +
             $"{(c.PricingMode == "margin" ? "Margin" : "Markup")} {c.MarkupOrMarginPercent:F1}%";
+
+        /// <summary>
+        /// Walks up the category parent chain to produce a full path like "Cerakote > Firearms",
+        /// giving Claude the coating-type context it needs for accurate pricing analysis.
+        /// </summary>
+        private static string BuildCategoryPath(int? categoryId, Dictionary<int, CatalogCategory> all)
+        {
+            if (categoryId == null) return "Uncategorized";
+            var parts = new List<string>();
+            var current = all.GetValueOrDefault(categoryId.Value);
+            while (current != null)
+            {
+                parts.Insert(0, current.Name);
+                current = current.ParentCategoryId.HasValue
+                    ? all.GetValueOrDefault(current.ParentCategoryId.Value)
+                    : null;
+            }
+            return parts.Count > 0 ? string.Join(" > ", parts) : "Uncategorized";
+        }
     }
 
     // Helper class for hierarchical display