Should I mark up sublet machine work, and how much?
Short answer
Yes, 15 to 25 percent over what the machine shop charges you, because you're managing the vendor, the timeline, and the quality risk on the customer's behalf. Passing sublet costs through at zero markup means you're doing project management for free.
You're not just a pass-through, you're the one on the hook
When you send a block out for boring and honing, you're the one coordinating the drop-off, the spec sheet, the pickup, and the inspection when it comes back. If the machine shop's work is off spec, it's your build schedule that slips and your customer relationship that absorbs it, not theirs directly. That coordination and risk is worth a markup, the same as any other sublet trade work.
15 to 25 percent over the machine shop's invoice is typical, scaled by how much risk and coordination the specific job carries; a simple resurface is closer to 15 percent, a full line bore and align with tight tolerances closer to 25.
Inspect before you install, every time
Never install a subletted part or machined component without checking it against spec yourself first. If it's out of tolerance and you install it anyway, the failure becomes your labor cost and your reputation, not the machine shop's, because your customer never saw the machine shop's invoice or name, they see yours.
Keep a short relationship with one or two machine shops you trust rather than shopping around every job for the lowest price. Consistency in a vendor relationship reduces the number of surprises that eat your build schedule.
Tell the customer sublet work is marked up, don't hide it
Line-item sublet costs on the invoice with your markup included, rather than folding it silently into a bigger number. Customers in this trade generally understand and accept a sublet markup once it's explained as covering your coordination and quality-check responsibility, and hiding it looks worse than stating it plainly if they ever ask.
Sublet machine work markup example
| Machine shop invoice: bore, hone, deck | $650 |
|---|---|
| Markup applied | 20% |
| Amount billed to customer | $780 |
| Markup covers | coordination, pickup/drop-off time, inspection, schedule risk |
The math: Sublet markup = machine shop's invoice cost x your markup percentage, scaled to the coordination and quality risk of that specific job.
Before installing any sublet-machined part
- 1.Check the returned part against the spec you sent, don't assume it's correct
- 2.Confirm any tolerances (bore size, deck height, etc.) with your own measuring tools
- 3.Line-item the sublet cost and markup on the customer invoice, don't bury it
- 4.Keep a small trusted list of machine shops rather than shopping every job to the lowest bidder
Where owners get this wrong
- Passing sublet costs through at zero markup and doing project management for free.
- Installing a machined part without independently checking it against spec.
- Hiding the markup instead of stating it as covering coordination and quality control.
Ask your version of this question
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