How do you calculate quote margin?

Subtract fully loaded cost from quoted price, then divide by your reference basis. With a $125 quote and $100 cost, the dollar margin is $25 and dividing by the 100 reference gives 25%.

Is 25% a good quote margin for rotating equipment?

For assembled pumps and compressors, 25-40% gross margin is common because warranty and field failure risk is real. The 25% in the example is on the lean side once you load in seal and balance warranty exposure.

What's the difference between margin on cost and margin on price?

Dividing the $25 by the $100 cost gives a 25% markup; dividing by a $125 price gives a 20% true margin. The calculator uses the reference you supply, so decide which one your finance team reports.

What should be in the fully loaded cost?

Everything to ship a good unit, bill of materials, direct assembly labor, balancing and test time, consumables, and an allowance for warranty and field failure cost. Quoting off BOM alone is how programs go underwater.

Why is my quote margin thinner than expected on delivery?

Usually because field failure cost and rework were not loaded into the cost side at quote time. If per-unit field failure cost runs $38 on a $25 margin, the program is losing money on every return.

Quote margin vs. contribution margin, which do I use?

Quote margin here is price minus fully loaded cost. Contribution margin subtracts only variable cost and is useful for make-versus-idle decisions; for bid go/no-go on rotating equipment, use fully loaded quote margin.

Pump, Compressor & Rotating Equipment Assembly calculator

Quote Margin Calculator

Quote Margin is the difference between what you quote a customer for an assembled pump or compressor and your fully loaded cost to build it, expressed both in dollars and as a percentage of a chosen basis. Estimators and sales engineers on rotating-equipment programs use it to make sure a bid covers the real cost of seals, bearings, balancing, run-in testing, and warranty exposure, not just the bill of materials. It matters because rotating equipment carries hidden cost of quality: a thin quote margin gets wiped out the first time a unit comes back for a seal or balance failure, so the margin has to carry that risk.

What this calculator does

Quote Margin is the difference between what you quote a customer for an assembled pump or compressor and your fully loaded cost to build it, expressed both in dollars and as a percentage of a chosen basis.
Use it when quote margin in pump, compressor and rotating equipment assembly needs a clean margin number for a pump, compressor and rotating equipment assembly go / no-go review.
It computes the margin between quoted price and loaded cost, both as an absolute dollar figure and as a percentage of a reference basis.

Formula used

Quote Margin margin = available value - required value
Margin percent = margin ÷ reference value

Inputs explained

Quoted price per assembled unit:
Fully loaded cost per assembled unit:
Reference basis for margin percent:

How to use the result

Use it while pricing a bid, comparing two quote structures, or checking whether a program still clears margin after warranty and field failure cost are loaded in.
The percent depends entirely on the reference basis you choose, dividing by cost gives markup, dividing by price gives true margin, so label which one you mean.

Current U.S. benchmarks

Industrial electricity averages 8.71 cents per kWh across the U.S. (EIA, May 2026), up 5.1% from a year earlier. Energy-intensive steps carry this directly into unit cost.
Manufacturing hourly earnings average $30.35 (BLS, Jul 2026), up 4.2% from a year earlier. Median machinist pay is $28.24/hr (OEWS 2025), with state medians on each state page. Manufacturers have 481k open positions nationally (BLS JOLTS).
Steel mill PPI stands at 374.203 (BLS, Jul 2026), up 22.5% from a year earlier. New factory orders are up 7.4% year over year (Census).
The U.S. has 21,668 machinery manufacturing establishments employing about 1,086,146 workers (Census County Business Patterns, 2023).

Common questions

How do you calculate quote margin? Subtract fully loaded cost from quoted price, then divide by your reference basis. With a $125 quote and $100 cost, the dollar margin is $25 and dividing by the 100 reference gives 25%.
Is 25% a good quote margin for rotating equipment? For assembled pumps and compressors, 25-40% gross margin is common because warranty and field failure risk is real. The 25% in the example is on the lean side once you load in seal and balance warranty exposure.
What's the difference between margin on cost and margin on price? Dividing the $25 by the $100 cost gives a 25% markup; dividing by a $125 price gives a 20% true margin. The calculator uses the reference you supply, so decide which one your finance team reports.
What should be in the fully loaded cost? Everything to ship a good unit, bill of materials, direct assembly labor, balancing and test time, consumables, and an allowance for warranty and field failure cost. Quoting off BOM alone is how programs go underwater.
Why is my quote margin thinner than expected on delivery? Usually because field failure cost and rework were not loaded into the cost side at quote time. If per-unit field failure cost runs $38 on a $25 margin, the program is losing money on every return.

Last reviewed 2026-07-13.