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Parts Markup Calculator

Work out parts markup instantly with clear inputs, formula shown and shareable results.

About Parts Markup Calculator

Parts pricing must start from landed cost — purchase price plus freight and handling — with a provision for warranty returns, then gross up to the target margin. Pricing from invoice cost alone systematically under-recovers on any part that has to be shipped in.

Formulas

Landed cost

Landed = (Part cost + Freight and handling) x (1 + Warranty provision %)

Selling price

Price = Landed cost / (1 - Target margin %)

Worked example

With the default values below, Parts Markup Calculator returns Selling price for the part of $3,796.29. Change any input above and every figure here is recalculated in your browser.

Inputs used

Part cost
2,400
Target gross margin on the part
30
Freight and handling per part
180
Warranty provision
3

Results

Selling price for the part
$3,796.29
Landed cost including freight and warranty provision
$2,657.40
Equivalent markup on cost
58.18%
Gross profit per part
$1,138.89

Step by step

  1. 1Values used
  2. 2Landed cost
  3. 3Selling price
  4. 4Selling price for the part= 3,796.29
  5. 5Landed cost including freight and warranty provision= 2,657.40
  6. 6Equivalent markup on cost= 58.18
  7. 7Gross profit per part= 1,138.89

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

What parts margin is normal?

25-40% for automotive and appliance service, higher on low-value fast-moving consumables and lower on high-value branded components.

Why include a warranty provision?

Because a proportion of parts fail within the warranty period and are replaced free. That cost has to be priced into every part sold.

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