How do you calculate repair margin on a reconditioning job?

Subtract total cost from the quoted price, then divide by your reference base. At $125 price, $100 cost, and a $100 base, margin is $25 and 25%.

What is a good repair margin for tool sharpening?

Independent grinding shops typically aim for 30-50% gross margin on service labor. The 25% in the worked example is on the thin side and leaves little room for wheel wear or rework.

Margin vs markup — which does this use?

It depends on your reference base. Dividing the $25 dollar margin by the $100 cost gives 25% markup; dividing by a $125 price would give 20% gross margin. Pick one convention and stay consistent.

Why is my margin percent different from a colleague's on the same job?

Almost always the reference base. If one person divides by cost and another by price, the same $25 margin reads as 25% or 20%. Agree on the base before comparing quotes.

Does repair margin include carbide recovery credit?

Only if you net it into cost. If you resell recovered carbide, subtract that credit from your cost figure so the margin reflects the true economics of the job.

How do I improve repair margin without raising price?

Cut cost inputs: extend grinding wheel life, batch similar geometries to reduce setup, and recover carbide value. Each dollar off cost drops straight to the $25-style margin.

Tool Sharpening, Reconditioning & Industrial Repair Services calculator

Repair Margin Calculator

Repair margin is the profit left after you subtract the full cost of reconditioning a tool from the price you charge the customer. Estimators and owners in the sharpening and industrial-repair trade use it to decide whether a regrind quote is worth taking and to protect margin when carbide, wheel, and labor costs move. Because reconditioning competes with buying new, margins are tight and small cost creep can flip a job unprofitable. This calculator returns both the absolute dollar margin and the margin as a percent of your chosen reference base.

What this calculator does

Repair margin is the profit left after you subtract the full cost of reconditioning a tool from the price you charge the customer.
Use it when repair margin in tool sharpening, reconditioning and industrial repair services needs a clean margin number for a tool sharpening, reconditioning and industrial repair services go / no-go review.
It subtracts total reconditioning cost from the quoted price to get dollar margin, then divides that by a reference base to express margin as a percent.

Formula used

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

Inputs explained

Recondition price quoted to customer:
Total cost to recondition the tool:
Reference base for margin (usually price or cost):

How to use the result

Use it when quoting a resharpening or re-tip job, or when reviewing a price list to confirm each service still clears your target margin.
The percent depends entirely on which reference base you pick — dividing by price gives gross margin, dividing by cost gives markup, and the two are not interchangeable.

Common questions

How do you calculate repair margin on a reconditioning job? Subtract total cost from the quoted price, then divide by your reference base. At $125 price, $100 cost, and a $100 base, margin is $25 and 25%.
What is a good repair margin for tool sharpening? Independent grinding shops typically aim for 30-50% gross margin on service labor. The 25% in the worked example is on the thin side and leaves little room for wheel wear or rework.
Margin vs markup — which does this use? It depends on your reference base. Dividing the $25 dollar margin by the $100 cost gives 25% markup; dividing by a $125 price would give 20% gross margin. Pick one convention and stay consistent.
Why is my margin percent different from a colleague's on the same job? Almost always the reference base. If one person divides by cost and another by price, the same $25 margin reads as 25% or 20%. Agree on the base before comparing quotes.
Does repair margin include carbide recovery credit? Only if you net it into cost. If you resell recovered carbide, subtract that credit from your cost figure so the margin reflects the true economics of the job.

Last reviewed 2026-05-12.