Is an 18% markup the same as an 18% margin?

No. Markup is a share of cost; margin is a share of price. An 18% markup is a 15.3% margin, and an 18% margin needs a 22% markup.

Should freight to the plater be marked up?

Mark it up if you pay and arrange it: it is part of the cost of getting the work done. If the customer pays freight directly or you bill it at cost, enter zero here.

What belongs in handling cost?

Work that exists only because the parts go out: the purchase order, packing and shipping, receiving inspection, certificate review and chasing the vendor. Price those hours at loaded cost; leave out inspection the job needs anyway.

What if my customer caps markup on outside processing?

Enter the cap as your markup. If the margin after handling falls short, recover handling another way, such as a lot charge, or ask the customer to buy the service directly.

Contract Manufacturing, Job Shop Quoting & Make-to-Order calculator

Outside Processing Markup Calculator

Price an outside processing line such as plating or heat treat, and see the margin your markup earns after handling. You need the vendor's lot price, freight, handling cost, lots and a target margin.

What this calculator does

Markup dollars on outside processing, and whether that markup still earns your margin once your handling is paid.

Formula used

Cost base = (vendor price per lot + freight per lot) × lots; handling cost = handling cost per lot × lots
Markup dollars = cost base × markup; line price = cost base + markup dollars
Margin before handling = markup dollars ÷ line price; margin after handling = (markup dollars − handling cost) ÷ line price
Line price at target margin = (cost base + handling cost) ÷ (1 − target margin)
Markup for target margin = line price at target margin ÷ cost base − 1

Inputs explained

Vendor Price per Lot: The plater, heat treater or coater's quoted price for one lot.
Freight per Lot: Shipping to the vendor and back, when you pay it.
Handling Cost per Lot: Purchase order, packing, receiving inspection and certs, at loaded cost.
Lots Sent Out: Separate shipments or purchase orders to the vendor for this job.
Markup on Outside Processing: Percentage you add to vendor price plus freight.
Target Margin After Handling: Profit you want on this line, as a share of its price.

How to use the result

Best suited to quoting plating, anodizing or heat treat, answering a customer's cap on pass-through markup, setting a standard outside processing markup.
Ignores the cash you carry between paying the vendor and collecting from your customer. Does not check vendor lead time, lot minimums or vendor scrap.

Current U.S. benchmarks

The U.S. prime lending rate is 7.00% (Federal Reserve via FRED, 2026-10-02). Payback and financing math should start from today's rate, not a remembered one.

Common questions

Is an 18% markup the same as an 18% margin? No. Markup is a share of cost; margin is a share of price. An 18% markup is a 15.3% margin, and an 18% margin needs a 22% markup.
Should freight to the plater be marked up? Mark it up if you pay and arrange it: it is part of the cost of getting the work done. If the customer pays freight directly or you bill it at cost, enter zero here.
What belongs in handling cost? Work that exists only because the parts go out: the purchase order, packing and shipping, receiving inspection, certificate review and chasing the vendor. Price those hours at loaded cost; leave out inspection the job needs anyway.
What if my customer caps markup on outside processing? Enter the cap as your markup. If the margin after handling falls short, recover handling another way, such as a lot charge, or ask the customer to buy the service directly.

Last reviewed 2026-10-01.