HVAC
HVAC Parts Markup Calculator
Price parts so sourcing, stocking and warranty are recovered rather than applying one percentage to everything.
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.
Get a Free Business AuditWhat moves the number
- Part cost band, since handling cost is close to fixed regardless of part price.
- Whether the part is van stock, which ties up capital, or ordered per job, which costs time.
- Warranty exposure, which is the cost of fitting it twice.
Where this one goes wrong
One flat percentage. It badly underprices a capacitor and produces a number on a compressor that invites the customer to price it online. A sliding scale by cost band survives scrutiny better.
Questions
About this calculator
Why does a flat percentage fail?
Because sourcing, stocking, carrying and warranting a part costs roughly the same whether it is cheap or expensive. A percentage recovers almost nothing on a low cost part.
What do I say to a customer who found it cheaper online?
That the price includes having it on the van today, fitting it, and warranting the work, none of which they are buying online. Said plainly it is a reasonable answer.
Should van stock be priced differently?
It has a real carrying cost and it turns a two visit job into one, which is worth something to the customer as well as to you. That value belongs in the price.
The formula
price = cost x (1 + markup%); margin = profit / price
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How to use this calculator
- Your cost ($). Enter your own figure; the page starts at $340.
- Markup on cost (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to price, 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 |
|---|---|
| Your cost | $340 |
| Markup on cost | 45% |
What comes out
| Result | Value |
|---|---|
| Price main result | $493 |
| Gross profit | $153 |
| Margin that gives you | 31.0% |
A 45% markup on $340 prices the job at $493, which is 31.0% margin, not 45%.
How sensitive the answer is
Holding everything else steady and changing only your cost, this is what happens to price. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Your cost ($) | Price |
|---|---|
| $170 | $246.50 |
| $255 | $369.75 |
| $340 example above | $493 |
| $510 | $739.50 |
| $680 | $986 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Your cost ($)
- A money amount, starting at $340.
- Markup on cost (%)
- A percentage, between 0 and 500, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Price | The headline result. A money figure. |
| Gross profit | A money figure. |
| Margin that gives you | A percentage. |
Before you rely on this number
Sizing, capacity and load figures here are planning estimates. A real installation depends on the manufacturer's data for the specific equipment, the duct system it is going into, and a proper load calculation for the building. Use this to sanity-check a number or price a job, not to select equipment.
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.