Auto repair & detailing
Parts Margin Calculator
Work out what parts actually contribute once freight, cores, shelf stock and warranty replacements are counted.
Result
Markup is measured against your cost, margin against the price you charge. A 50% markup is a 33.3% margin, not a 50% one. Pricing off the wrong one is the most common way a job that looked profitable turns out not to have been. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditWhat moves the number
- Freight, which is often absorbed and is a real cost on small orders.
- Cores not returned, which turn into pure loss.
- Obsolete stock, which is capital already spent on parts that will not sell.
Where this one goes wrong
Measuring parts margin on the invoice line alone. The line looks healthy while the shelf carries stock bought two years ago and the core credits were never chased.
Questions
About this calculator
How do core charges affect parts margin?
An unreturned core is a cost with no revenue against it. Shops that do not track cores routinely lose more on them than they realise, because each individual one is small.
Is it worth stocking common parts?
It trades cash for bay time. Stock turns a two day job into a same day job, which frees the lift. Whether that pays depends on how tight your bay capacity is.
How should freight be handled?
Attributed to the job where it can be, and recovered in the markup where it cannot. Absorbed entirely it quietly reduces the margin on every small order.
The formula
margin = (price - cost) / price; markup = (price - cost) / cost
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How to use this calculator
- Price charged ($). Enter your own figure; the page starts at $520.
- Direct cost ($). Enter your own figure; the page starts at $280.
The result updates as you type, so you can try a figure, see what it does to gross margin, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Price charged | $520 |
| Direct cost | $280 |
What comes out
| Result | Value |
|---|---|
| Gross margin main result | 46.2% |
| Gross profit | $240 |
| Same thing as a markup | 85.7% |
That job earns $240 of gross profit, a 46.2% margin. The same job described as a markup is 85.7%.
How sensitive the answer is
Holding everything else steady and changing only price charged, this is what happens to gross margin. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Price charged ($) | Gross margin |
|---|---|
| $260 | -7.7% |
| $390 | 28.2% |
| $520 example above | 46.2% |
| $780 | 64.1% |
| $1,040 | 73.1% |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Price charged ($)
- A money amount, starting at $520.
- Direct cost ($)
- A money amount, starting at $280.
What the results tell you
| Result | What it is |
|---|---|
| Gross margin | The headline result. A percentage. |
| Gross profit | A money figure. |
| Same thing as a markup | A percentage. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.