Bike repair pricing calculator

Every bike repair price is two things added together: the labor, and the parts. The calculator above takes the minutes the job should take on your bench and multiplies them by your hourly shop rate. It takes what you paid for the parts and adds your markup. It adds those two lines, applies the sales tax rate you enter, and gives you the quote.

Labor is minutes divided by 60, times your hourly rate. A 45-minute job at a 100-dollar rate is 75 dollars of labor. Parts price is cost times one plus your markup. A part that cost you 30 dollars at a 60% markup sells for 48 dollars. Add the two, then add tax.

The minutes should be the time the job takes a competent mechanic on your bench, start to finish: getting the bike in the stand, doing the work, test riding, cleaning up and writing the ticket. Not the time it takes your fastest mechanic on a good day. If you run a flat-rate menu, the minutes are your book time for that job.

This is the mistake that quietly costs shops the most. Markup is what you add on top of cost, as a percentage of cost. Margin is what you keep, as a percentage of the selling price. They are never the same number.

In the example, the parts cost 30 dollars and sold for 48. The markup is 18 divided by 30, which is 60%. The margin is 18 divided by 48, which is 37.5%. If you told yourself you run '60% on parts', you are keeping 37.5 cents of every parts dollar, not 60.

To convert: margin equals markup divided by one plus markup. Markup equals margin divided by one minus margin. If you want a 40% margin on parts, you need a markup of 0.4 divided by 0.6, which is about 66.7%. If you want a 50% margin, you need a 100% markup, which is the old keystone rule: double the cost.

Decide which number you are managing to and use it consistently. Your accountant and your profit and loss statement talk in margin. Your price stickers and supplier catalog talk in cost and markup. Know both.

The quote is only as good as the rate you put in. If you have never worked out your labor rate from your costs, do that first with the labor rate guide; a rate copied from the shop down the road tells you nothing about your rent, your wages or how many hours your mechanics actually bill.

Parts cost should be your landed cost: the price on the invoice plus freight, divided across the order. A tube that cost 5 dollars from the distributor and 1 dollar of shipping cost you 6.

Sales tax rules differ by state and sometimes by city. In some places labor on a repair is taxable and in others only the parts are, and separately stated labor can be treated differently from bundled labor. Check with your accountant or your state revenue department. If only parts are taxable where you are, work out the tax on the parts line and add it yourself.

In BIKE.co Service, each quote line carries its own taxable flag, so a labor line can sit untaxed next to a taxed parts line. Put the labor and each part on separate lines, mark the extras the rider may skip as optional, and once the customer says yes, the approved quote converts into a job with the lines they chose carried across.