Parts Markup Calculator
Price a part, see the margin it actually produces, and check it against the markup range normal for that price band. Markup and margin are different numbers, and mixing them up is the most common pricing mistake in the trade.
Markup is not margin
This is the part worth getting right. Markup is calculated on your cost. Margin is calculated on your selling price. A part costing 100 dollars marked up 35 percent sells for $135.00. Your gross profit is $35.00, which against a $135.00 selling price is a margin of 25.9 percent, not 35.
The gap widens as the numbers grow, and it is why shops that price to a markup target and report to a margin target quietly miss both. If you need a specific margin, convert first: required markup equals margin divided by one minus margin. A 35 percent margin needs a 53.8 percent markup.
Markup normally slides with part cost
A flat percentage across every part prices you out of large jobs and leaves money on small ones. Common practice across the trade:
| Part cost | Typical markup | Example |
|---|---|---|
| $0 to $50 | 40 to 50% | $20 oil filter becomes $28 to $30 |
| $50 to $150 | 30 to 40% | $100 brake pads become $130 to $140 |
| $150 to $500 | 25 to 35% | $300 starter becomes $375 to $405 |
| $500 to $1,000 | 20 to 30% | $700 alternator becomes $840 to $910 |
| $1,000 and up | 15 to 25% | $2,000 transmission becomes $2,300 to $2,500 |
These are conventions rather than rules, and there is no federal or industry statistic that establishes them. Treat them as a sanity check on your own pricing, not as an authority. For the reasoning behind each band, see the full guide to parts markup.
Common questions
What is the difference between markup and margin?
Markup is calculated on your cost, margin on your selling price. A part that costs 100 dollars and sells for 135 carries a 35 percent markup but a 25.9 percent margin. They are never the same number, and confusing them is the most common pricing mistake in the trade. If you need a 35 percent margin you have to apply a 53.8 percent markup, not 35.
What is a standard parts markup for a mobile mechanic?
Markup normally slides down as part cost rises. Common practice is 40 to 50 percent on parts under 50 dollars, 30 to 40 percent from 50 to 150, 25 to 35 percent from 150 to 500, 20 to 30 percent from 500 to 1,000, and 15 to 25 percent above 1,000. A flat percentage across every part will either price you out of large jobs or leave money on small ones.
Why is marking up parts legitimate?
Because the markup pays for work the labor rate does not. Sourcing and researching the correct part, collecting it, carrying the cost until the customer pays, handling returns on the wrong part, and warranting it afterwards are all real costs. A shop that charges cost on parts is performing that work for nothing.
How do I handle a customer who wants to supply their own parts?
Decide your policy in advance and put it in writing. Many shops accept customer-supplied parts at a higher labor rate and with no warranty on the part or the labor tied to it, because they carry the risk without the margin. Whatever you choose, note it on the estimate before work starts rather than raising it afterwards.
Should I show the markup on the invoice?
You do not need to itemize the markup, and most shops quote a single parts price. What matters is that the price on the estimate matches the price on the invoice. Several states require written authorization before exceeding an estimate, so a parts price that moves between quote and invoice creates a legal problem as well as a trust problem.
Price it once, invoice it right
Trackara Pro carries your parts pricing from quote to invoice automatically, so the number the customer approved is the number they get billed. Invoices, quotes, parts and profit visibility from your phone.
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