Confirm the part revenue
Use the part revenue recorded on the finalized repair invoice, excluding labor revenue when the goal is specifically to measure parts margin.
All ShopBrain answers
Margin
How do tech repair shops calculate true parts margin?
By PB DigitalReviewed July 25, 2026
Step by step
How the operating logic works.
Build the landed part cost
Start with the vendor line price, then allocate relevant shipping, tax, and order-level discounts across the purchased items using a consistent method.
Match the purchase to the repair
Connect the purchased SKU or description to the inventory item or ticket part used. Uncertain matches should wait for review.
Calculate and compare
Calculate margin at the repair, category, vendor, location, and time-period level, then compare it with the shop’s own target.
Illustrative example
A simple landed-cost calculation
If a part produces $120 in part revenue and its confirmed landed cost is $72, parts margin is ($120 − $72) ÷ $120 × 100, or 40%. If $8 of freight was omitted from that cost, the apparent margin would be overstated. This is an illustrative example, not financial advice or a customer result.
Where ShopBrain fits
Evidence first. Human decision last.
ShopBrain combines RepairDesk repair revenue with reviewed purchasing lines, allocates order-level amounts into landed cost, and surfaces missing-cost or low-margin exceptions. Financial calculations are performed deterministically; GPT-5 mini is used to explain confirmed findings in plain English.
Important limits
What this answer does not assume.
This formula measures gross parts margin, not the shop’s complete profitability or net income.
Accounting, sales-tax, warranty, and inventory-costing policies vary; use the shop’s accountant for formal reporting.
Refunds, credits, reused parts, and inventory adjustments may require additional treatment.
Keep exploring
Related ShopBrain guides
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