How do you calculate quote margin on kitchen equipment?

Subtract delivered cost from selling price to get the dollar gap, then divide by your revenue basis. On a $84,500 quote with $68,200 delivered cost, the gap is $16,300 and the margin is about 19.3%.

What is a good margin on commercial kitchen equipment?

Dealer gross margins on equipment packages typically run 18-30%, with installed and custom-fabrication work landing higher than straight equipment resale. The 19.3% in the example is workable but leaves little cushion once overhead and commission come out.

Margin vs markup: what's the difference?

Margin divides profit by selling price; markup divides profit by cost. The example's 19.3% margin equals a markup of about 23.9% on the $68,200 cost. Confusing the two is the fastest way to underprice a kitchen quote.

Should freight and rigging go in delivered cost?

Yes. Delivered equipment cost should capture the equipment, inbound freight, rigging, and any liftgate or stair-carry charges. Leaving freight out of a heavy refrigeration or hood quote is the most common reason actual margin comes in below the quoted figure.

Why use a separate revenue basis instead of the selling price?

The revenue basis lets you express margin against the equipment portion alone or the full contract value including labor. Keeping it equal to the selling price gives a clean equipment gross margin, as in the worked example.

Commercial Kitchen Equipment calculator

Quote Margin Calculator

Quote Margin tells a kitchen equipment dealer or fabricator exactly what percentage of a quoted job is profit before overhead. Estimators and sales engineers use it on every package quote for ranges, refrigeration, hoods, and stainless to make sure the delivered cost (equipment, freight, rigging, and install) leaves enough room. It matters because foodservice equipment quotes carry thin, competitive margins, and a freight or fabrication line item underestimated by a few thousand dollars can wipe out the profit on a six-figure kitchen. Running it before you send the proposal keeps you from winning a job you lose money on.

What this calculator does

Calculate quoted gross margin for a commercial kitchen equipment line item or customer package.
checking margin on a kitchen equipment quote before release
It computes the gross margin percentage of a quote by dividing the price-minus-cost dollar gap by the quoted revenue basis.

Formula used

Quote Margin dollar gap = quoted equipment selling price - estimated delivered equipment cost
Quote Margin = dollar gap ÷ quoted revenue basis

Inputs explained

Quoted equipment selling price:
Estimated delivered equipment cost:
Quoted revenue basis:

How to use the result

Use it at quoting time on every equipment package, and again at change-order time when scope or freight shifts the delivered cost.
It is a gross margin on delivered equipment cost only; it does not include shop overhead, sales commission, warranty reserve, or payment-term financing cost, so net profit will be lower.

Current U.S. benchmarks

Industrial natural gas averages $4.9 per Mcf (EIA, Apr 2026), down 7.7% from a year earlier, with industrial electricity at 8.66 cents per kWh. Process heating and refrigeration budgets track both.
Steel mill PPI stands at 348.53 (BLS, May 2026), up 6.7% from a year earlier. New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate quote margin on kitchen equipment? Subtract delivered cost from selling price to get the dollar gap, then divide by your revenue basis. On a $84,500 quote with $68,200 delivered cost, the gap is $16,300 and the margin is about 19.3%.
What is a good margin on commercial kitchen equipment? Dealer gross margins on equipment packages typically run 18-30%, with installed and custom-fabrication work landing higher than straight equipment resale. The 19.3% in the example is workable but leaves little cushion once overhead and commission come out.
Margin vs markup: what's the difference? Margin divides profit by selling price; markup divides profit by cost. The example's 19.3% margin equals a markup of about 23.9% on the $68,200 cost. Confusing the two is the fastest way to underprice a kitchen quote.
Should freight and rigging go in delivered cost? Yes. Delivered equipment cost should capture the equipment, inbound freight, rigging, and any liftgate or stair-carry charges. Leaving freight out of a heavy refrigeration or hood quote is the most common reason actual margin comes in below the quoted figure.
Why use a separate revenue basis instead of the selling price? The revenue basis lets you express margin against the equipment portion alone or the full contract value including labor. Keeping it equal to the selling price gives a clean equipment gross margin, as in the worked example.

Last reviewed 2026-05-12.