3PL quote margin calculator
Add your quote lines and the job's direct costs to see gross profit, margin, markup and the price that hits your target.
| Cost line | Amount |
|---|
An estimate from the numbers you entered. It is not a quote and does not include overhead.
How this calculator works
Add up what the customer pays, add up what the job costs you to deliver, and compare the two. Everything runs in your browser; nothing you type is sent anywhere.
Revenue = sum of (quantity × unit price) for every quote line
Direct cost = labor hours × loaded rate + materials + equipment + passthrough + other
Gross profit = revenue − direct cost
Gross margin % = gross profit ÷ revenue × 100
Markup % = gross profit ÷ direct cost × 100
Price for target margin = direct cost ÷ (1 − target margin %)
Margin vs. markup: why the same job shows two different percentages
Margin is profit as a share of the price. Markup is profit as a share of the cost. They describe the same dollars from opposite ends, so markup is always the larger number when the job is profitable.
A job costs you $500 and you charge $700. Gross profit is $200. Margin is $200 ÷ $700 = 28.6%. Markup is $200 ÷ $500 = 40%.
The mistake that costs money: someone is told to hit a 35% margin, adds 35% to cost, and quotes $675 on a $500 job. That is a 35% markup and only a 25.9% margin. To get a true 35% margin you divide cost by 0.65, which gives $769. The price helper on the right does exactly that.
| Target margin | Equivalent markup |
|---|---|
| 20% | 25.0% |
| 25% | 33.3% |
| 30% | 42.9% |
| 35% | 53.8% |
| 40% | 66.7% |
The conversion is markup = margin ÷ (1 − margin). Pure arithmetic, no assumptions.
Getting the inputs right
- Labor hours are person-hours. Four people for two hours is eight hours, not two.
- Use a loaded rate, not the wage. Payroll taxes, workers' comp, benefits and paid time off sit on top of the hourly wage. If you don't know your burden, the container labor cost calculator lets you build a loaded rate from wage and burden percentage.
- Passthrough costs dilute your margin percentage. If you rebill a $600 drayage at cost, gross profit dollars don't change but margin percentage drops, because revenue went up and profit didn't. Many 3PLs track margin on their own services separately for that reason.
- Price each line from your card. If you don't have one yet, start with how to build a 3PL rate card.
What this calculator does not cover
- Overhead. Rent, management salaries, software, insurance and the WMS are not in direct cost. A healthy gross margin still has to pay for all of them before you see net profit.
- Idle and rework time. If the crew waits two hours for a late container, that time is a cost whether or not it is billable. Enter it as labor hours if it happened.
- Accessorials you forgot to quote. Margin on paper is only as good as the charge list. See warehouse accessorial charges for the lines that most often go missing.
- Payment terms and bad debt. A 40% margin on net-60 terms is worth less than it looks.
This calculator only knows the numbers you type in. Rapid Ai 10x works from your own rate card: Adriana prices each line of an incoming request against it and prepares the quote for a person on your team to approve, and Luis turns accepted quotes into jobs and plans the labor, so the hours you quoted and the hours you staff come from the same record. See how the agents work together.
Common questions
Margin is gross profit divided by the price; markup is gross profit divided by the cost. A job that costs $500 and sells for $700 has a 28.6% margin and a 40% markup. Adding 35% to cost gives a 35% markup, which is only about a 25.9% margin.
Divide direct cost by one minus the target margin. For a 35% margin on $500 of cost: $500 ÷ 0.65 = $769.23. The calculator does this for you and shows how far the current quote is from it.
Include them in direct cost so gross profit dollars are right, but remember they lower the margin percentage when billed at cost. Many 3PLs also track margin on their own services with passthroughs left out.
No. Gross margin only subtracts the direct costs of the job: labor, materials, equipment and third-party costs. Rent, management, software and insurance come out of gross profit afterward.
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