What's the difference between markup and margin?

Markup is the amount you add on top of what you paid, measured against your cost. Margin is the portion of the final price that is profit, measured against the price you charge. For the same job the markup percentage is always higher than the margin percentage, so treating one as the other means undercharging every time.

How much should I mark up materials?

There's no universal figure, because it depends on how much sourcing and handling the materials need and how competitive your market is. Set it from your own costs: work out what sourcing, collecting and carrying materials genuinely costs you over a year, and choose a markup that recovers that across your jobs. Then apply it consistently on every quote.

Why can't I just charge materials at cost?

Because sourcing, collecting, storing and returning parts is real work, and mispriced or damaged orders come straight out of your labour if the materials don't carry them. You also fund the cost of the parts until the customer pays. A markup charges for that handling and risk; charging at cost means running an unpaid supply service alongside your trade.

Should materials and labour be on separate lines?

Yes. Itemising materials separately from labour shows the customer what the money buys, reduces haggling, and turns mid-job extras into cleanly priced new lines rather than end-of-job arguments. It also makes your labour-only price clear when a customer supplies their own materials.

How do I account for waste and wrong orders?

Build them into the materials price rather than hoping they won't happen. Offcuts, the extra bought so you don't run short, returned wrong parts and trips to the merchant are all real costs. Estimating materials a little generously also means you come in under quote rather than going back to ask for more, which customers much prefer.

How to price materials: markup and margin, explained

Updated 21 July 2026

Charge for materials at more than you paid for them. The extra, your markup, pays for the time you spend sourcing and collecting parts, the cost of getting it wrong, waste, returns, and the money tied up while you wait to be paid. The trap that quietly drains profit is confusing markup with margin: they describe the same job from different ends, and mixing them up means undercharging on every single job without realising. Here's how to price materials so the parts pay their way.

Why you mark up materials at all

Passing materials on at cost feels honest, but it means every hour you spend sourcing, collecting, storing and returning parts is unpaid, and every mispriced order or damaged item comes straight out of your labour. Suppliers mark up; merchants mark up; the whole chain does, because handling stock costs money.

A markup on materials isn't overcharging. It's charging for the real work of getting the right parts to the job, and for carrying the cost of them until the customer pays. Skip it and you're running a small unpaid delivery service alongside your actual trade.

Markup and margin are not the same number

This is the confusion that costs people money. Markup is the extra you add on top of what you paid, measured against your cost. Margin is the share of the final price that's profit, measured against the price you charge. The same job has a higher markup number than margin number, always.

A worked example makes it plain. Buy a part for 100 and sell it for 150: that's a 50% markup (you added half your cost) but only a 33% margin (50 of the 150 you charged is profit). A trader who wants to keep a third of the price as profit but adds a third as markup ends up short on every job, because they aimed at margin and applied it as markup. Know which one you mean, and a markup-margin calculator (there's a free one at /tools/markup-margin-calculator) will keep the two straight.

What to actually add

There's no universal figure, because it depends on how much handling the materials need and how competitive your work is. The right way to set it is from your own costs: what does sourcing and carrying materials genuinely cost you across a year, and what markup recovers that across the jobs you do?

Whatever you land on, apply it consistently. A markup you use on some jobs and forget on others isn't a policy, it's a mood, and the forgotten ones are pure loss. Build it into how you price every quote so it happens by default rather than by memory.

Don't forget waste, collection and returns

Materials cost more than the price on the receipt. There's the offcut you can't reuse, the extra length bought so you don't run short, the wrong part collected and returned, and the trips to the merchant that burn fuel and an hour you can't bill. All of it is real, and all of it lands on you unless the markup carries it.

Estimating a little generously on materials also protects the customer relationship: it's far better to come in slightly under a quote than to go back asking for more because you under-ordered. A price that holds is worth more than a price that looked keen and then crept up.

Show materials and labour on separate lines

Whatever you mark materials up to, put them on the quote as their own lines, separate from labour. The customer sees an itemised breakdown rather than one number they can't interrogate, which builds trust and heads off haggling before it starts.

Itemising also protects you when the job grows. The extra part becomes a new line at your normal markup, agreed before you fit it, instead of an awkward sum at the end. And when a customer supplies their own materials, a clear split makes it obvious what your labour-only price is, and reminds them the sourcing they've taken on had a value too.

Common questions

What's the difference between markup and margin?: Markup is the amount you add on top of what you paid, measured against your cost. Margin is the portion of the final price that is profit, measured against the price you charge. For the same job the markup percentage is always higher than the margin percentage, so treating one as the other means undercharging every time.
How much should I mark up materials?: There's no universal figure, because it depends on how much sourcing and handling the materials need and how competitive your market is. Set it from your own costs: work out what sourcing, collecting and carrying materials genuinely costs you over a year, and choose a markup that recovers that across your jobs. Then apply it consistently on every quote.
Why can't I just charge materials at cost?: Because sourcing, collecting, storing and returning parts is real work, and mispriced or damaged orders come straight out of your labour if the materials don't carry them. You also fund the cost of the parts until the customer pays. A markup charges for that handling and risk; charging at cost means running an unpaid supply service alongside your trade.
Should materials and labour be on separate lines?: Yes. Itemising materials separately from labour shows the customer what the money buys, reduces haggling, and turns mid-job extras into cleanly priced new lines rather than end-of-job arguments. It also makes your labour-only price clear when a customer supplies their own materials.
How do I account for waste and wrong orders?: Build them into the materials price rather than hoping they won't happen. Offcuts, the extra bought so you don't run short, returned wrong parts and trips to the merchant are all real costs. Estimating materials a little generously also means you come in under quote rather than going back to ask for more, which customers much prefer.

SoloDesks for your trade

Put it into practice

SoloDesks sends the itemised PDF quote, gets the yes in writing, and chases the invoice, from your phone, free to start.

Start free