Margin Calculator

Quote-shop math: price from cost + target margin, margin from cost + price, or convert markup to margin so you stop confusing the two.

Cost ($)

Target Margin (%)

Formulas: Margin % = (Price − Cost) / Price × 100 | Price = Cost / (1 − Margin/100) | Markup % = (Price − Cost) / Cost × 100
Don't confuse markup and margin: 50% markup ≠ 50% margin. A part costing $100 marked up 50% sells for $150 — that's only a 33% margin. To hit 50% margin you need 100% markup ($200 quote). Most shops underprice because they price markup-style and call it margin.

Why This Matters for Job Shops

Most shop owners learned to quote by adding a percentage on top of cost — that's markup. But financial reports, customer benchmarks, and bank covenants use margin. The two are not the same number, and when shops budget for "30% margin" while actually quoting 30% markup, they're running 23% margin and don't know it. Over a year that gap is enough to wipe out the bonus pool.

Margin is share of price. If you quote $100 and your true cost is $65, your margin is 35% — $35 of every $100 invoiced is gross profit.
Markup is share of cost. The same $35 on $65 cost is a 53.8% markup. Same dollars, two different percentages depending on the denominator.
Banks and customers talk margin. RFQ aggregators and ERP exports almost always show margin %, not markup. If you're tracking the wrong number internally you'll get blindsided in a price negotiation.

Practical Tips for Quoting

Decide your target margin floor before you quote. Common floors for job shops: 25–35% gross margin on standard work, 40%+ on tight-tolerance / short-run, 15–22% on long production with material pass-through.
Cost includes burdened labor, not just wages. Shop rate should bake in benefits, downtime, indirect labor, and machine time. If you quote off raw wage, your "30% margin" is a lie.
Don't average margin across customers. Track it per customer. Shops often discover one anchor customer is at 12% margin while a smaller customer is at 40% — and they've been treating the anchor like the prize account.
Set walk-away criteria up front. If a customer pushes you below your floor, the answer is no, even when the floor feels arbitrary. Underpriced work eats capacity that real-margin work needs.
Re-quote stale jobs annually. Material moved, energy moved, your labor cost moved. The same part at the same price last year is probably 5–10 points lower margin today.

Margin Calculator

Why This Matters for Job Shops

Practical Tips for Quoting

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