Markup pays for sourcing, stocking, warranty and trips to the supply house.
In this article
Multipliers
Simple factors.
Tiered markup
By part cost.
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Flat rate
Parts included.
Customer-supplied parts
Policy.
Transparency
Explain value.
A closer look
Selling parts at cost means you pay for the truck stock, the supply house trips and the warranty. Tiered markup keeps small parts profitable without making expensive equipment look overpriced.
Where to start
Create a simple tiered markup table and apply it in your software.
An example
A company moved from a single multiplier to tiers. Small-part jobs became profitable and big equipment quotes stayed competitive.
Common mistakes
Selling at cost, one markup for everything and no policy for customer parts.
What to track
Track gross margin on parts.
Questions to ask
What does carrying parts cost us? Are small parts profitable? How do we handle customer parts?
Price every call so it pays.
We help service businesses set clear policies, book better jobs and turn more calls into profitable work.
Frequently asked questions
What is a typical parts markup for service companies?
It varies by trade and part price. Many companies use tiered markups, with higher percentages on inexpensive parts and lower percentages on expensive equipment.