How much should a tech repair shop mark up parts? There is no correct percentage, because a percentage scales with the supplier invoice and your costs do not. Price every part from its true cost, not the invoice. Then set the minimum every repair must earn in dollars: your Part 3 floor rate multiplied by the minutes the ticket takes. Cheap parts end up with a high markup, expensive parts with a low one, and both come from the same floor. A repair that cannot clear it is repriced, special-ordered, declined, or turned into a replace recommendation. Part 5 of the nine-part Fix the Shop First series, with a free True Parts Cost worksheet.

By Rob Link, Founder & CEO, Tech Care Association · October 7, 2026 · 30 min read

That is the TCA's position, and it is the second chapter in this series to take one. Part 4 ended with a promise: the fee protects labor; this week protects the part. The question, stated precisely: when a repair needs a part, how much should a tech repair shop charge for that part, and what is the least a single repair can earn before the shop should not do it?

The answer most shops carry around is a habit: double it, add fifty percent, part plus a hundred dollars. None of those rules knows what the part costs the shop by the time it is ordered, shipped, installed, and warrantied. This chapter replaces the habit with arithmetic the shop already has after Part 2 and Part 3: the true cost of the part, the floor rate, and one dollar figure every ticket must clear.

What's in this post

1. Key Takeaways
2. Invoice, True Cost, Markup, Margin, Contribution: What Each One Means
3. The Short Answer, Including What to Put in the POS Tomorrow
4. The Framework: True Cost, Required Contribution, Decide
5. What Shops Are Saying
6. What the Record Shows
7. Why Markup Is Not Margin
8. The TCA True Parts Cost Formula, Worked
9. Two Pockets, One Floor: The Minimum Contribution Per Repair
10. Why a Dollar Floor Beats a Percentage
11. Building a Declining Markup Matrix From Your Own Numbers
12. Economy, Premium, OEM, Refurbished: Same Formula, Your Callback Rate
13. Customer-Supplied Parts, RMAs, and One Supplier
14. How to Say It
15. The Two Numbers to Watch Every Month
16. The TCA's Take
17. What to Do Monday Morning
18. Quick summary
19. Frequently Asked Questions About Tech Repair Shop Parts Markup

Key Takeaways

• Markup is not margin. Markup is what you add to the invoice. Margin is what the ticket leaves behind after the part is really paid for.
• The invoice is not the cost of the part. True parts cost adds the replacement parts you supply free under warranty, shipping both ways, and an allowance for stock on the shelf. It is a pricing measure, not an accounting definition of inventory cost.
• Every repair has a floor: true parts cost plus the minimum contribution, which is your floor rate multiplied by the minutes the ticket takes. Below that, reprice, special-order, decline, or recommend replacement.
• Parts and labor are two pockets with one floor. How the ticket splits them is presentation; whether they add up is not. "Part plus $100" does not say whether the part is at invoice or above it, and in the discussions the TCA reviewed almost nobody said.
• A percentage fails at both ends. Doubling a $12 part leaves about $9 toward a ticket that needs about $104; doubling a $140 part leaves more than the ticket needs on a part the customer can price-check. The shape that works is a declining matrix with a dollar minimum underneath.
• Part tier and markup are one decision. The warranty line is the only input that changes by tier, and your callback rate by tier is the number that decides it.
• Answer "I found it online" with what the price includes, not with a discount. A transparent estimate shows the part price and the labor price; it does not ordinarily require the supplier invoice.

Invoice, True Cost, Markup, Margin, Contribution: What Each One Means

• Invoice price. What the supplier charged. The number most shops multiply. Not the cost.
• True parts cost. Invoice price plus expected warranty replacement, shipping both ways, and an inventory allowance. The number this chapter multiplies. A TCA management-pricing measure, not an accounting definition of inventory cost or cost of goods sold.
• Markup. What you add to cost, measured against cost. A $100 part priced at $150 carries a 50 percent markup.
• Margin. What you keep, measured against price. The same part carries a 33 percent margin. Same dollars, different denominator.
• Contribution. Dollars a ticket leaves behind after the true cost of the part, before rent and everything else. Part 2's gross margin per ticket, with the part priced honestly.
• Minimum contribution per repair. What one ticket must leave behind: floor rate multiplied by ticket minutes, divided by 60. A dollar figure.
• Minimum repair price. True parts cost plus the minimum contribution. The least the ticket can total before the shop should not do it.
• Warranty reserve. Callback rate multiplied by the part-side cost of a callback: the replacement part, consumables, and return shipping. The bench time on a callback is already inside a floor rate built on billable hours, so it is counted there, once.

The Short Answer, Including What to Put in the POS Tomorrow

There is no correct markup percentage, and the TCA is not going to hand you one. Mark the part up from its true cost, not the invoice, and set one minimum every repair must clear: your floor rate multiplied by the minutes the ticket takes, on top of what the part really cost you. That minimum is a dollar figure, and it does not move when the invoice moves.

For the owner who needs a number in the point of sale tomorrow, the practical answer is a declining markup matrix: a high percentage or a fixed dollar minimum on cheap parts, a moderate percentage in the middle, a low percentage on expensive parts, and the minimum contribution underneath all of them. The percentages are yours, derived from your true cost and your floor; the shape is universal, because the costs that make a $12 part expensive to handle are the same costs that make a $300 part cheap to handle. The matrix section below shows how to build one from the two numbers this chapter produces.

The Framework: True Cost, Required Contribution, Decide

Most of the argument about parts markup dissolves once shops stop using "markup" and "margin" to mean the same thing, and stop treating the invoice as the cost. The framework the TCA recommends is five lines, and the first three are arithmetic.

1. Find the true parts cost. Invoice plus warranty reserve plus shipping plus inventory allowance.
2. Find the minimum contribution. Floor rate multiplied by ticket minutes, divided by 60.
3. Find the minimum repair price. Add them. This is the floor for this repair.
4. Compare it to the ceiling. What the customer will reasonably pay, which is bounded by the manufacturer's repair price where one exists and by what the device is worth.
5. Decide. Quote it, reprice it, move the part to special order with a deposit, decline it, or recommend replacement. All five are answers. Absorbing the gap is not.

What Shops Are Saying

Observational evidence from TCA Repair Community Listening. Method and limits are in the footer.

In the online discussions the TCA reviewed over three weeks, repair professionals rarely talked about marking up parts at all. They talked about adding to them. Across the nine discussions that touched parts pricing (about 190 comments, September 9 to October 1), the parts price almost always appeared as "part plus a number," and the number was labor. Only two participants stated a markup on the part itself, and neither explained what the multiplier was meant to cover. Where the part itself earned anything, almost nobody said so.

The structures stated, from the largest pricing discussion in the set (about 45 comments on what to charge for a screen): part plus $100 from five participants, the most common single answer; part plus $120 to $150 from several, often keyed to device generation; labor of $60 or $100 keyed to whether the part cost under or over $50 from one; and full price ladders by model from several, with the part absorbed into a list price. The two stated multipliers were one and a half times the part plus $40 in labor, and one and a quarter times the part plus $120 or $150 by generation. The arithmetic later in this chapter runs all three against the series' illustrative shop, and one clears the floor.

Three comments carry the rest of the chapter. One participant, on a public page (about 35 comments), stated what the shop earns per repair by tier rather than a price: roughly $80 to $120 on economy screens and $150 to $220 on premium OLED screens carrying a lifetime warranty. One shop's figure, not a benchmark, and the only comment in the set that stated the number a markup is supposed to produce. Another characterized the economy screen install as a one-time profit of about $30, thin enough that one callback removes it. A third said most of his prices are outdated and that keeping every price current as supplier costs move is not realistically possible, which is The Data Gap in an owner's words: a markup is meaningless if the cost it multiplies is stale. No participant described checking margin before giving a quote.

"Part plus $100" does not say whether "part" means the supplier invoice or something above it. In these discussions, it almost never did. That ambiguity is the problem this chapter solves: shops know what they are adding without knowing what the ticket has to leave behind.

What the Record Shows

Community Listening tells you what owners say. Four other sources show what the practice looks like on paper, each specific to electronics repair, none a benchmark.

The TCA's 2025 pricing formula, and what it left out

In 2025 the TCA published Simplifying Your Tech Repair Shop Pricing, which set the formula as parts with markup plus labor. Part 3 superseded the labor half. The parts half was right as far as it went: the part should carry a markup. It did not say markup on what, or to what. This chapter supplies both.

Repair-shop software already assumes the markup should vary

RepairDesk, a point-of-sale system built for electronics repair, publishes a repair parts markup feature that lets a shop define markup "slabs," each with a minimum cost, a maximum cost, and a markup percentage, with the marked-up part added to the service charge on the ticket. Read the implication: even the software assumes a $10 part and a $300 part do not necessarily deserve the same markup. If the tooling many shops already run allows a declining matrix, a shop applying one percentage to every part is choosing to.

The customer can increasingly see a genuine-part price

Apple's Self Service Repair program gives individuals access to genuine Apple parts, tools, and repair manuals for out-of-warranty repair, and says these are the same parts and tools it makes available to its authorized service providers. The same page notes that for certain repair types the customer may receive a credit when the replaced part is returned. Two consequences. For supported devices and repairs, consumers can increasingly see what a genuine part costs before walking in, which makes "double every part" indefensible on the expensive end. And a core credit means the part's net cost to the shop is lower than the invoice; if the point of sale records the gross price as cost of goods, the margin report is wrong. Price from the net cost after the credit, and from the gross cost until it arrives.

Price transparency is not cost disclosure

California's electronic and appliance repair statute requires an initial written estimate before any repair, states that the estimate must include all costs for parts and labor, and prohibits charging beyond the estimate without the customer's consent. Note what it requires and what it does not. The customer is entitled to the price of the part and the price of the labor before work begins. A transparent estimate does not ordinarily require disclosure of the shop's acquisition cost or supplier invoice. Hold that distinction for the "I found it online" objection below, and know your own state's estimate rules.

Why Markup Is Not Margin

Two mistakes hide inside "mark it up fifty percent." The first is arithmetic: markup and margin are different numbers that sound the same. The second is the base: the percentage is applied to the invoice, and the invoice is not what the part costs.

The arithmetic

Markup is measured against cost. Margin is measured against price. On a $100 part:

Markup on cost	Part price	Dollars kept	Margin on price
25 percent	$125	$25	20.0 percent
50 percent	$150	$50	33.3 percent
100 percent (doubled)	$200	$100	50.0 percent
150 percent	$250	$150	60.0 percent

To keep a target share of the price, divide by one minus the target, the same move Part 3 made for labor. A shop that says "we mark up 50 percent" and believes it keeps half is keeping a third.

The base: what the invoice does not show

The second mistake is invisible on every ticket. Before a part earns the shop anything, the price has to cover what happens after the invoice.

Defective units. Some share of parts fail on the bench or come back under warranty. The supplier may replace the part; the shop still supplies the second adhesive, pays the return shipping, and often eats the first part. The expected cost is Part 2's callback arithmetic applied to the part side: callback rate multiplied by the replacement part, consumables, and return shipping.

Shipping, both ways. Every order carries inbound freight, divided across the parts in it. Every RMA ships back, and the replacement ships again. A $20 part in a six-part order with $12 of freight cost $22 before it was opened.

Stock on the shelf. A part on the shelf is cash that is not in the bank, on a model getting older at a price drifting down. A battery that turns twenty times a year costs almost nothing to hold. A display for an unusual model that sits nine months costs real money, which is why slow movers belong on special order.

The time nobody bills. Somebody looks up the part, orders it, receives it, tests it, and does the RMA paperwork, and somebody spends the second block of bench time when a part comes back. That time is real, and it is already paid for: a floor rate built the Part 3 way divides all of the shop's payroll and overhead by billable hours, so every unbilled minute is inside it. Count it there, once. The exception is a shop with no floor rate, or one paying technicians per repair, where handling and callback time are incremental and belong on the part; the worksheet has a line for it, set to zero by default.

The part the shop thinks cost $43.33 cost about $47 by the time it was installed and warrantied, and about $50 at a shop whose labor line was never built on billable hours. A markup applied to the invoice starts behind. Illustrative.

The TCA True Parts Cost Formula, Worked

True parts cost = invoice price + (callback rate x part-side callback cost) + allocated shipping + inventory allowance, plus handling time at the loaded rate only where the floor rate does not already carry it.

One sentence before the numbers: "true parts cost" is a TCA management-pricing measure built to set prices, not an accounting definition of inventory cost or cost of goods sold. Your bookkeeper's number and this one answer different questions.

A worked example (illustrative numbers carried from Parts 2 and 3, not a benchmark). Part 2's example shop spent $5,200 on parts across 120 tickets, or $43.33 per part, with a 3.3 percent callback rate. Add three placeholders: $2 of consumables on a redo, $12 of inbound freight on a typical six-part order, and $8 to ship a return. The part is a fast mover, so the inventory allowance is zero; a slow mover gets the shop's own allowance or goes on special order.

Nine percent does not sound like much until it is applied to every part the shop touches. Across Part 2's 120 parts a month, $3.76 a part is about $450 a month that a shop "passing parts through at cost" is quietly paying its supplier, its carrier, and its warranty customers.

Two Pockets, One Floor: The Minimum Contribution Per Repair

True cost tells you what the part is. It does not tell you what to charge. The second number does, and it comes from Part 3.

Part 3 said the floor rate is what every billable hour has to bring in after the part is paid for, however the shop collects it: a labor line, a parts markup, a flat price, or some of each. "After the part is paid for" means after the true cost. So the minimum a single repair must contribute is one multiplication, and the floor for the repair is one addition:

Minimum contribution per repair = floor rate x ticket minutes / 60.
Minimum repair price = true parts cost + minimum contribution.

Worked (illustrative). Part 3's example shop has a floor rate of $178.98 per billable hour and timed its common screen ticket at 35 minutes door to door. Minimum contribution: $178.98 x 35 / 60 = $104.40. Minimum repair price on the example part: $47.09 + $104.40 = $151.49. The ticket can total more. It cannot total less without the shop subsidizing it.

Parts pocket plus labor pocket equals the contribution. Three splits reach the same floor; the one the community uses most, with the part at invoice, falls short of it. Illustrative.

Run the three structures from this month's listening against the series shop, on the series' numbers and not on any participant's own:

• Part plus $100, part at invoice: $143.33. Short of the floor by $8.16, about $980 a month across 120 tickets.
• One and a half times the part plus $40: $105.00. Short by about $46.
• One and a quarter times the part plus $120: $174.16. Clears the floor by about $23.

Same part, same shop, three structures shops actually use, one that works, and none of the three participants could have known, because none described starting from the floor. If the labor line is at the floor, the parts pocket only needs to recover true cost. If the labor line is below the floor, as a flat $100 is for this shop, the parts pocket has to make up the difference, and now the shop knows exactly how much: $4.40 above true cost, a part price of $51.49, about 1.19 times invoice. Not a rule; the result of two numbers the shop owns.

When the floor is above the ceiling

Part 3 spent a section on the ceiling below the floor, and it applies to the part with one addition: device value. If a laptop is worth about $350 used, the display's true cost is about $178, and the minimum contribution on an hour-long ticket is $179, the minimum repair price is about $357. The arithmetic is not telling you to raise the markup. It is telling you this repair does not clear the floor at any price the customer will accept, and the diagnostic from Part 4 should produce the word "replace." That answer has value; the customer who thanked a shop for it in last month's listening is the proof.

Why a Dollar Floor Beats a Percentage

Here is the fault in every flat percentage, including the one the TCA's own 2025 article implied. The costs that sit on top of the invoice are mostly fixed dollars per part: the same box, the same return label, the same minutes. And the contribution the ticket needs is a fixed dollar figure set by the floor rate and the clock, not by the invoice. A percentage of a small invoice cannot cover fixed dollars, and a percentage of a large invoice covers them many times over on the part the customer can price-check.

Doubling the $12 part leaves the labor line carrying almost the whole ticket. Doubling the $140 part collects the whole ticket twice. One rule fails at both ends. Illustrative.

Both ends fail for opposite reasons, and the fix is the same: a dollar minimum on the small end, so the part plus labor reaches the contribution; and a low percentage on the large end, so the part carries its true cost and a visible share while the labor line carries the rest. That shape has a name.

Building a Declining Markup Matrix From Your Own Numbers

A markup matrix is a short table that applies a different percentage to different cost ranges, and it is the operational answer to this chapter's headline. The TCA will not print one with percentages in it, because the right percentages come from your true-cost inputs and your floor rate, and a table that works for a shop with 3 percent callbacks and $8 freight loses money at a shop with 8 percent callbacks and $20 freight. What the TCA will show is the shape, because the shape is universal.

True parts cost	What the parts pocket has to do	Shape of the markup
Small (a battery, a port, an adhesive)	Cover true cost; the labor line carries nearly all of the contribution	A fixed dollar minimum, or a high percentage that produces one
Mid-range (most phone screens)	Cover true cost and a share of the contribution, so a flat labor line does not have to carry it alone	A moderate percentage
Large (laptop displays, genuine assemblies)	Cover true cost and a visible share; the customer can see a reference price	A low percentage, with the labor line carrying the rest of the floor

Illustrative shape only. This is what a declining matrix looks like, not a TCA benchmark, and the boundaries and percentages are yours.

To build yours: take the top ten parts by volume, run each through the true-cost formula, decide what the labor line will carry on that ticket, and the parts pocket is what is left. Three tiers usually do it; do not build twelve. Then check two things once a month: that the bottom tier's part plus labor still clears the contribution, and that the top tier's part price still looks reasonable next to a manufacturer's repair price. A matrix is a rule for the counter. The floor is the reason the rule exists.

Economy, Premium, OEM, Refurbished: Same Formula, Your Callback Rate

Part 2 found the economy-versus-OLED argument in four discussions in one week and said it would stay an argument until warranty returns divided by completed repairs was a number shops tracked by tier. This month it was still an argument. Here is the arithmetic it is waiting for.

The true-cost formula does not change by tier. One input does: the warranty reserve, which is your callback rate for that tier multiplied by the part-side cost of a callback. Illustrative, with made-up tier inputs the TCA has no source for: an economy display at a $30 invoice with a 10 percent callback rate carries a $3.20 reserve and a true cost of about $35.46; a premium display at a $60 invoice with a 2 percent callback rate carries a $1.24 reserve and a true cost of about $63.50. The invoice gap is $30; the true-cost gap is about $28. On the part side alone, the economy part is still cheaper, and the formula is honest about that.

The cost it does not show is the one that lands on everyone else. Every callback is a block of unbilled bench time, and unbilled time is what lowers utilization and raises the floor rate for every ticket in the shop. A tier that comes back one time in ten instead of one in fifty is not just a $2 difference in reserve; it is a tax on every other repair, and it shows up in Part 2's number four and Part 3's utilization before it shows up anywhere else. That, plus the reputation cost nobody can put on a ticket, is the real price of the cheaper invoice. The formula makes the part side a decision instead of a reflex; the callback rate by tier tells you the rest.

Genuine or OEM-equivalent parts add one line: the customer can increasingly see a reference price, so the markup on that tier will be low and the labor line carries the floor. Refurbished parts add another: the supplier's warranty terms become part of the price, which the next section takes up. What this chapter will not do is tell you which tier is right, name a supplier, or claim one supplier's parts fail less than another's. The TCA has no data for any of that. It has a formula that lets you find out for your own shop.

Customer-Supplied Parts, RMAs, and One Supplier

Three questions come up every time parts pricing does. Each gets a paragraph here and a fuller chapter in 2027.

"Can you use my part?" You can, and if you do, the economics change and the ticket should say so. Where permitted by applicable law and disclosed before work begins, a shop can set a policy that customer-supplied parts carry no shop warranty on the part, that installation labor is charged at the full rate and remains payable if the supplied part turns out to be defective or incompatible, and that a stated bench fee covers the risk of an unknown part. Write all of it on the ticket before the device is opened. Customer-supplied parts prove this chapter's point in reverse: when the shop does not supply the part, the shop does not earn the part's contribution and does not carry the part's warranty. Those two things travel together.

RMAs. A supplier's return process is part of its price. Track two numbers per supplier: how many days a return takes to become a credit or a replacement, and what share of returns are actually credited. A supplier whose part is $3 cheaper and whose returns take three weeks and come back denied one time in four is not cheaper. The return shipping belongs in the true cost; the turnaround belongs on the bench, where a part stuck in transit is a device stuck on the shelf.

One supplier. A shop with one supplier has a cost input it does not control. A shop with two has a price it can check. The stale-prices owner in this month's listening cannot keep up with supplier cost changes; a second supplier does not fix that, but it turns a surprise into a comparison, and an RMA dispute no longer stops the bench. Carry a second source for the top ten parts by volume, even if you buy from the first one nine times out of ten.

How to Say It

Three objections, each under a minute spoken. They are also in the one-page worksheet at the end of this chapter.

"I found the same screen online for $12."

"You can find a screen online for that, and you might get a good one. What our price covers is a part we chose and tested, installed by a technician, with our warranty on the whole repair. If it fails, you bring it back and we handle it, including the part and the time. The online part comes with none of that. If you'd like to bring it in, we'll install it at our labor rate, with the warranty on the labor only. Either way is fine. They are two different things."

"The shop down the street charges less for the screen."

"They might. I don't know what part they use, what their warranty covers, or what happens if it comes back, and those are the things that decide what a screen repair costs. Ours is [price], it uses a [tier] part, and it carries a [length] warranty on the part and the work. If you want the lowest price on the block, I'd rather you knew what you were comparing than guessed."

"Why is the part more than the website price?"

"Our parts price includes finding the right part, keeping it in stock so you aren't waiting a week, checking it before it goes in, and the warranty we give you on the repair. If the part fails, replacing it is on us, not you. That is what the difference pays for."

None of these scripts reveals the invoice, and none apologizes for the price. Customers are entitled to understand what they are being charged for and what it includes. A shop that can say that in one breath does not need to hide anything.

The policy, as a card. Print it for the counter and paste it on the website. The worksheet has the same five lines with blanks.

The Two Numbers to Watch Every Month

Part 3 added a sixth number to Part 2's five: the effective labor rate. This chapter adds the seventh and eighth, and they travel together, because this chapter has spent several thousand words arguing that a percentage alone does not tell you whether the ticket works.

Parts contribution = parts revenue minus true parts cost, in dollars, by month. This tells you whether the parts pocket is putting enough money on the table.

Blended parts margin = parts contribution / parts revenue, as a percentage. This tells you whether the pricing is efficient, and it is the one that moves first when a supplier raises a price and the price list does not follow.

Parts revenue is what customers paid for parts, if your point of sale separates the part line from labor; if it does not, that separation is the first thing to fix, because without it the two pockets cannot be told apart. True parts cost is the formula above run on the month's invoices: invoices plus the replacement parts actually supplied under warranty, plus freight actually paid, plus an allowance for what sat on the shelf. Put both numbers on the same sheet as the five numbers and the effective labor rate, and watch the trend. When either drops, the cause is one of four things: supplier prices moved and the price list did not, callbacks rose on a tier, freight rose, or somebody started discounting the part to win the job. Each has a different fix, and the numbers tell you to go look.

Set your own target the way Part 2 set every target. There is no sourced benchmark for parts contribution or parts margin in independent tech repair, and the TCA will not invent one. Take last month's parts contribution. If, added to last month's labor contribution, it did not cover fixed costs with room to spare, the target is the figure that would.

The TCA's Take

This section is the TCA's position, not a finding from the community evidence above.

A shop should never quote a repair below its true parts cost plus the minimum contribution that ticket requires, and it should know both numbers before the quote, not after the bank statement. A markup is a means. The contribution per ticket is the number. Set the markup from the contribution you need, not the contribution from the markup you inherited.

The TCA's position is not that parts should carry a specific percentage, and it is not that every shop must itemize a markup on the receipt. It is that the part is a cost center with lines the invoice does not show, and a price built on the invoice alone subsidizes the supplier, the carrier, and the customer who brings the device back, in that order. Recover those costs inside the part price, inside the labor line, or inside a flat price. The choice the TCA argues against is the one most shops make by default: a multiple nobody derived, applied to a cost nobody updated, checked against nothing.

Every objection the TCA heard this month has the same answer.

"The customer can get it cheaper online." Yes, installed by themselves, tested by nobody, warranted by no one. Answer with what the price includes. If you cannot say what it includes, that is the problem, not the price.

"Part plus $100 works for me." It might. Run it against your true cost and your floor once and you will know, which is more than most of the shops stating it this month could say. On the series' illustrative shop it was about $8 short on every ticket.

"Economy parts are fine." "Economy parts are killing your brand." Run the warranty reserve by tier and look at what the callbacks did to utilization. One of you is right for your shop, and the numbers will say which.

"If I price it right, the customer will walk." Some will. A repair that cannot meet the shop's floor does not become profitable because the customer accepted it. Listening shows, it does not prove, and this month's discussions contained plenty of owners afraid of losing the job and none who described losing one to a price that was explained.

What to Do Monday Morning

Three steps put a tech repair shop parts markup on a floor this week.

1. Pull last month's parts invoices and your RMA count. Add the freight you actually paid and the returns you actually shipped, divide by parts received, and you have your true cost per part, on average. The gap to your average invoice is the number you have been giving away.
2. Run the floor on your top ten repairs. True parts cost plus your Part 3 floor rate multiplied by the ticket minutes you timed in Part 3. Put the result beside what you charge today. Circle every repair under the floor; those are the ones you reprice, move to special order, or stop offering.
3. Put the minimum contribution in dollars on the pricing sheet, and build the three-tier matrix underneath it. One line at the top: no repair leaves the shop below true parts cost plus $[your floor rate x your typical minutes]. Then post the five-line parts and warranty policy at the counter and on the website, in the same words.

The fee protected labor. The floor protects the part. Next Wednesday, October 14, Part 6 asks the question the first five chapters make answerable: now that the hour, the diagnostic, and the part are priced, which repairs actually earn their bench space, and which ones have been filling it.

Quick summary

• Markup is not margin. Markup is measured against cost; margin against price. A 50 percent markup keeps a third of the price, not half.
• The invoice is not the cost. True parts cost = invoice + (callback rate x part-side callback cost) + shipping both ways + inventory allowance. Illustrative: $43.33 becomes $47.09, about 9 percent more, or about $50 at a shop with no floor rate.
• The minimum contribution per repair is a dollar figure: floor rate x ticket minutes / 60. Illustrative: $178.98 x 35 / 60, about $104.
• The minimum repair price is true parts cost plus the minimum contribution. Illustrative: about $151. "Part plus $100" with the part at invoice was about $8 short on the example.
• Two pockets, one floor. Parts pocket plus labor pocket equals the contribution. The split is presentation; the total is not.
• A percentage fails at both ends; a declining matrix with a dollar minimum is the shape that works, and the percentages in it are yours.
• Tier and markup are one decision, and the callback rate by tier is the input, on the part side and in utilization.
• The TCA has not published a parts markup, parts margin, or callback-rate benchmark, and the structures from this month's listening are what participants stated, not an industry pattern.

Frequently Asked Questions About Tech Repair Shop Parts Markup

What is a fair parts markup for a tech repair shop?

There is no single fair percentage, and the TCA has not published a benchmark. A fair part price covers the part's true cost (invoice plus warranty replacement, shipping, and an inventory allowance) and leaves, together with the labor line, the minimum contribution your floor rate requires. The practical form is a declining matrix: a high markup or dollar minimum on cheap parts, a low markup on expensive ones.

What is the difference between markup and margin on a part?

Markup is what you add, measured against cost. Margin is what you keep, measured against price. A $100 part priced at $150 carries a 50 percent markup and a 33 percent margin. To keep a target share of the price, divide cost by one minus the target.

Should a tech repair shop pass parts through at cost and make money on labor?

Not at invoice cost. The invoice is below what the part costs the shop once replacements, shipping, and shelf time are counted, so passing it through at invoice loses money on every part. A shop can choose to collect the whole contribution on the labor line, but the part must at least be priced at its true cost.

How do I set the minimum contribution per repair?

Multiply your Part 3 floor rate by the minutes a typical ticket takes door to door, then divide by 60. That is what the ticket must leave behind after the true cost of the part. At the illustrative floor used in this series, a 35-minute ticket needs about $104. Your floor rate and your timed tickets produce your number.

Should a repair shop install customer-supplied parts?

It can, with the economics stated on the ticket before work begins and consistent with local rules: labor at the full rate and payable regardless, no shop warranty on the part, and a bench fee if the shop chooses to charge for the added risk. The customer who supplies the part takes on the quality risk the shop's markup would otherwise have covered.

How should I price an economy part versus an OEM or premium part?

Run the same true-cost formula on each tier with that tier's callback rate in the warranty reserve, then look at what each tier's callbacks do to your utilization. The cheaper invoice is only cheaper if both say so. On genuine or OEM-equivalent parts, expect the markup to be low because the customer can increasingly see a reference price, and let the labor line carry the floor.

Should I tell customers my markup?

Customers are entitled to the price of the part and the price of the labor before work begins, and to know what the price includes. A transparent estimate does not ordinarily require the shop's supplier invoice. Price transparency is not cost disclosure.

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How healthy is your shop, really?

TCA ShopCheck is a free two-minute health check built for independent repair shops. Your Run It Well score is the fast read on how the operational side is functioning. Knowing what a part really costs, and what every repair has to clear, is one of the habits behind it.

Run TCA ShopCheck Free

More from the TCA Blog

• Fix the Shop First: The TCA Guide to Running a Profitable Repair Shop (series hub)
• Busy or Profitable? 5 Numbers Every Tech Repair Shop Must Track (Part 2)
• How to Calculate Your Tech Repair Shop Labor Rate (Part 3)
• Free Quotes Are Not Free Diagnostics: Where a Tech Repair Shop Should Draw the Line (Part 4)
• Fix the Shop First: Stop Chasing the Next Thing (Part 1)
• The Data Gap Costing Tech Repair Shops $50,000+ Per Year
• TCA Resource Hub: Parts Providers
• Second Life Sessions: 19 Conversations with Tech Repair, Reuse & E-Waste Leaders

Rob Link is the founder of the TCA. He built and ran a multi-location repair chain in an earlier era of this industry, and he'd tell you today's operators have it harder. The TCA is independent of carriers, manufacturers, and insurance companies, which is exactly why it can tell shop owners the truth about growth.

Sources and methodology

• Part 3 of this series, How to Calculate Your Tech Repair Shop Labor Rate, for the $178.98 floor rate, the $22.50 loaded hourly cost, the 55 percent utilization, and the 35-minute ticket. The floor rate divides all payroll and overhead by billable hours, which is why unbilled handling and callback time are not added to the part again in this chapter.
• Part 2, Busy or Profitable?, for the $43.33 average part, the 3.3 percent callback rate, and gross margin per ticket. Part 2's $90 average callback included bench time; this chapter uses only the part side of a callback in the warranty reserve.
• Part 4, Free Quotes Are Not Free Diagnostics, for the diagnostic that produces the repair-versus-replace answer.
• Tech Care Association, Simplifying Your Tech Repair Shop Pricing, April 2, 2025. This chapter extends its parts-with-markup formula by defining the cost base and the contribution target; Part 3 superseded its labor formula.
• RepairDesk, Repair Parts Markup, product documentation describing cost-range markup slabs, accessed October 5, 2026. Cited as evidence that tiered markup tooling exists in repair-shop software; not an endorsement.
• Apple, Self Service Repair, accessed October 5, 2026, for consumer access to genuine parts and the replaced-part credit.
• California Business and Professions Code Section 9844, written estimate requirements for electronic and appliance repair dealers, accessed October 5, 2026. Other states have their own rules; nothing in this chapter is legal advice.
• Second Life Sessions, Episode 7, Jordan Notenbaum, President, MobileSentrix, Tech Care Association, 2026. No statements from the interview are quoted in this chapter.
• "True parts cost" is a TCA management-pricing measure, not an accounting definition of inventory cost or cost of goods sold.
• All worked numbers are illustrative and carried from the series example. The added inputs ($2 consumables, $12 freight per six-part order, $8 return shipping, eight minutes of handling) are placeholders chosen to show the formula, and the tier inputs in the tiers section are made up to show the arithmetic. None is a benchmark, and the TCA has not published a benchmark for parts markup, parts margin, parts contribution, callback rate by tier, or any input in this chapter.
• Stated prices and formulas from Community Listening are reported as participants stated them. Arithmetic on stated figures is labeled where it appears and is run on the series' illustrative numbers, not on any participant's shop.

About this data: The TCA reviewed approximately 190 comments from repair professionals across 9 online industry discussions about parts and repair pricing between September 9 and October 1, 2026. These discussions were voluntary and were not collected through a representative survey. Findings describe the comments reviewed and should not be interpreted as estimates for the entire repair industry. Comments from parts vendors and service resellers were excluded. Individual participants are not identified without permission.

Published October 7, 2026. Last updated October 7, 2026.