Use this guide to set up material costs, supplier prices and markups, then check that a quotation achieves the intended profit margin.

Applies to: staff maintaining stock records, material plans and manufacturing quotations.

1. Understand the different pricing controls

Material markup and quotation margin are separate. The material line uses a cost-based markup even when the quotation pricing grid is configured to display Margin %.

2. Set up the material stock record

1. Open Stock and select the material record, or create a new record.
2. Check the description and supplier identify the correct material and specification.
3. Set Purchase Units to the unit used by the supplier.
4. Set Stock Units to the unit used internally for stock and material quantities.
5. Enter the Conversion Factor: purchase quantity multiplied by this factor gives stock quantity.
6. Enter the current Purchase Unit Cost.
7. Check that the displayed Stock Unit Cost matches your own calculation.
8. Enter the agreed Markup %, then save the record.

Example of purchasing bars and consuming metres

Assume you buy a 6-metre bar for £120 and record material usage in metres.

A material requirement of 2 metres therefore has a base cost of £40. A 25% material markup adds £10, giving a marked-up material amount of £50 before any quotation-level pricing adjustment.

Do not change a conversion factor simply to correct a price. RedAnt warns that changing an existing factor affects purchase orders and goods-in records and cannot be undone. Review a genuine unit change with the person responsible for stock and purchasing.

3. Maintain supplier prices and quantity breaks

1. Select the stock item and click the Suppliers label to open Stock Prices.
2. Maintain the supplier, supplier part number, description, minimum order, minimum charge and lead time as required.
3. In the Prices grid, maintain the supplier, quantity break, Price per Unit, delivery charge and notes.
4. Confirm the price basis matches the item's purchase units.
5. Finish editing the row, close the window and reopen it to check the saved values.
6. Check the resulting estimate at the relevant order quantities.

Supplier quantity prices are maintained separately from the standard purchase cost on the stock record. When checking a quotation, confirm that the correct supplier price and quantity break have been used and that delivery charges are included. Check each material line after changing supplier prices.

4. Set the default material percentage

The Default Settings screen contains a Margin / Markup % field associated with the default material markup. Agree the intended value with the person responsible for pricing before changing this shared setting.

When selecting a stock item on a quotation material line, RedAnt copies the stock item's cost, stock units, supplier and markup. Editing the material description can replace a zero markup with the system default.

If a material must have zero markup, check the final saved line after selecting the stock item and editing its description. A stock markup of zero does not guarantee the quotation line will remain at zero.

5. Check material pricing on the plan or quotation

1. Open the relevant material plan or quotation material grid.
2. Select the correct Stock ID.
3. Check Price against the stock-unit cost, not the full purchase-unit cost.
4. Confirm Units and Quantity. On quotation lines, also check Qty Per Unit and any Min Charge.
5. Check % Markup and amend it for the specific estimate where appropriate.
6. Include the required material allowance for scrap, bar ends and other usage, using the relevant estimating controls.
7. Save and recalculate or refresh the estimate through your normal quotation workflow.
8. Check the calculated material amount and final quoted price.

For a simple material line, the base amount is Quantity ÷ Qty Per Unit × Price; the material markup is added to that amount. Supplier volume pricing, minimum charges, assemblies and quantity allocation can change the calculation, so verify each quoted quantity.

When adding a new material line, select the Stock ID before entering a description so RedAnt can fill in the stock details. For an existing line, check the price, units, supplier and markup yourself after a price change.

6. Distinguish markup from profit margin

Markup measures profit against cost. Margin measures profit against the selling price.

• Selling price using markup: Cost × (1 + Markup % ÷ 100).
• Selling price using margin: Cost ÷ (1 − Margin % ÷ 100).
• Achieved margin: (Selling price − Cost) ÷ Selling price × 100.
• Markup required for a target margin: Target margin % ÷ (100 − Target margin %) × 100.

These examples exclude VAT and assume the stated cost is the complete cost basis for the calculation. A material-only margin does not establish the profit margin for the whole job.

7. Set and verify the final quotation price

Check whether the quotation pricing grid displays Margin % or Markup %. The Margin option in Default Settings controls this mode.

• Margin mode: RedAnt calculates Quoted Price from Total Cost divided by (1 − margin percentage). Enter a percentage below 100.
• Markup mode: RedAnt adds the percentage to either Total Cost or Estimated, depending on the configured markup basis.

Confirm the markup basis with your administrator before setting a company-wide pricing rule. A markup applied to Estimated can build on amounts that already contain material markups.

1. Review the material, labour, subcontract and other cost inputs.
2. Check Total Cost and Estimated.
3. Enter the agreed percentage in the quotation pricing grid.
4. Review Quoted Price, Profit Each and Profit Total.
5. Independently check the achieved margin against Total Cost and the final quoted price.
6. Repeat for every quoted quantity, and recheck after any discount or manual price change.

For example, if the complete Total Cost is £100 and the target margin is 20%, the required quoted price is £125. A material markup should be treated as part of the pricing setup, not as proof that the final quote achieves the target.

8. Maintain costs without unintended bulk changes

When an existing stock purchase cost changes, users with Stock maintenance access may receive a prompt to change the cost price for ALL Material Plans using that Stock ID. Accepting it updates matching material-plan prices using the new cost divided by the conversion factor.

Only accept the bulk update when all matching material plans should be repriced. For a quotation-specific supplier offer, review the individual estimate rather than assuming every plan should use the temporary price.

After changing a price, check the stock cost, supplier prices, affected material plans and any quotations you intend to reuse. Update the stock selling price separately where required. Always review existing quotations before sending them to a customer.

The Stock screen also has Maintenance → Selling Price Increase and Register Plan Price Increase. Their names describe different operations; choose the function that matches the records you intend to change.

Routine checks

• Review costs when suppliers issue new prices and before reusing an old quotation.
• Check units and conversion before applying a percentage.
• Review minimum order quantities, minimum charges and delivery costs.
• Check whether zero markup has been replaced by a default.
• Check the quote's margin or markup mode and its calculation basis.
• Verify the final margin after discounts, rounding or manual overrides.
• Compare completed-job costs with estimates to improve future pricing.

Troubleshooting