Quote thresholds

Floor price vs profit margin for laser jobs

A no-loss floor and a target-margin price are not interchangeable. The first asks whether modeled cost is recovered. The second asks whether the chosen price reaches a margin target after included costs and fees.

What a floor price means

The modeled floor price is the customer price that covers the costs included in your model and the selling fees applied to that price. It does not automatically include every real business cost, so it is only as complete as the inputs.

Floor price = (modeled cost + fixed fee) ÷ (1 − percentage fee)

If a job sells below this threshold, the model says the selected price does not recover the included cost and fees. That statement is arithmetic, not an accounting or tax conclusion.

What target margin means

Margin is usually expressed as profit divided by selling price. Markup is usually profit divided by cost. They produce different prices and should not be mixed silently.

Target price = (modeled cost + fixed fee) ÷ (1 − percentage fee − target margin)

For example, adding 30% to cost is a 30% markup, not a 30% margin. The resulting margin is lower because the denominator is selling price.

Why percentage selling fees change the formula

If a platform charges a percentage of the final customer price, the fee increases when the price increases. Adding a percentage fee to the cost once will understate the exact recovery price. Solving through the denominator accounts for that relationship.

Use statuses as review prompts

A quote checker can compare a planned price with both thresholds:

Below modeled floor: included cost and fees are not recovered.
Above floor but below target: cost is recovered in the model, but the chosen margin is not reached.
At or above target: the arithmetic reaches the selected threshold, assuming inputs are complete and correct.

A PASS is not approval. It cannot confirm demand, scope, customer fit, tax treatment, input accuracy, or whether the job is operationally sensible.

Guard impossible assumptions

When percentage selling fees plus target margin reach 100%, the denominator becomes zero. Above 100%, it becomes negative. A responsible calculator should stop and explain the problem instead of returning a misleading price.

Other invalid states include nonpositive quantity, negative time, blank unit cost, and missing machine or labor rates. Some inputs may legitimately be zero, but the model should distinguish an intentional zero from an omitted core value.

Use sensitivity checks before sending the quote

Recalculate with higher waste, longer labor, lower quantity, or a changed fee. If a small input shift destroys the margin, the quote is fragile. Sensitivity checks help you decide where better measurement or a contingency is needed.

Practical review sequence

Verify material, waste, machine, labor, and overhead inputs.
Confirm current fixed and percentage selling fees.
Calculate the modeled floor.
Choose and calculate a target margin separately.
Compare the planned quote with both thresholds.
Review scope and customer-facing terms before sending.

Scope note: This guide is an arithmetic explanation, not a recommendation for a particular margin or price. It does not provide tax, accounting, legal, or market-demand advice.