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Glossary Shop business & metrics

Gross margin

Definition

How does a shop work out gross margin on a job?

  • Gross margin — Revenue minus COGS, shown in dollars or as a percentage of the price.
  • It's the number that tells you whether a busy calendar is actually profitable.
  • A wall-menu list price is a revenue number; margin is the profit number underneath it.

Why it matters to a shop

Margin is the number a shop owner should be able to see before sending a quote, not after reconciling at tax time. A price list tells you what you charged; margin tells you whether the job was worth doing at all. On seeing it before the quote goes out, read margin quoting software.

FAQ

Gross margin questions, answered

How do you calculate gross margin on a job?

Take the price the customer paid, subtract the direct cost of delivering it — film and consumables at what you actually paid for them, plus install labour — and you have gross profit. Divide that by the price and you have the percentage. The part shops get wrong is the film: costed from a list price rather than the roll, the number is fiction.

What is the difference between gross margin and markup?

They are two views of the same gap and they are not the same number. Markup measures the gap against your cost; margin measures it against the price. A job costing one hundred dollars sold at one hundred and fifty carries a fifty percent markup and a thirty-three percent margin. Quoting to a markup habit while thinking in margin is a reliable way to earn less than you planned.

What gross margin should a shop aim for?

There is no figure worth publishing here, because it depends on your market, your overhead and your mix of work, and a made-up benchmark is how shops end up chasing somebody else's business model. The habit that matters more than the target: see the margin on every quote before it is sent, and compare profit per bay hour across jobs rather than ticket size.

Go deeper

Related terms

More from shop business & metrics — The owner-side numbers that decide whether a busy shop makes money.

Live-margin quoteA quote that shows projected profit in dollars and percent as you build it, costed from the real material on your shelf — so an underpriced package gets caught before you send it, not at month-end. Service VIN's core difference from a flat estimate.Film tracked to the footInventory that counts film by the linear foot remaining on each roll, at the real cost you paid, with lot numbers and reorder points — instead of treating a four-figure roll as a single line item. It's what makes true material COGS and reorder alerts possible.Average ticketThe average revenue per completed job. Raising it with upsells (a coating over PPF, a windshield film, a maintenance plan) is often faster than chasing more leads, because it earns more from work you already booked.Close rateThe share of quotes or leads that turn into booked, paid jobs. A low close rate usually points at slow follow-up or unclear pricing more than at price itself — which is why quote follow-up and speed-to-lead move it the most.Speed-to-leadHow fast you respond to a new inquiry. The shop that answers first usually wins the job, so replying in seconds — even with an AI lead responder after hours — beats a polished reply that lands the next morning.DepositA payment collected when a customer books, to hold the bay and commit them to the job — the money you order film against. Deposits turn a hopeful maybe into a committed booking and are the single biggest lever against no-shows.

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