Guides
How to Price a Pool BuildCost Categories, Markup vs Margin & Allowances
October 8, 20269 min readBy the Ardovia team
To price a pool build, estimate the full cost of every category — excavation, steel, plumbing, electrical, shotcrete, tile and coping, decking, interior finish, equipment, permits, and job-specific overhead — then set the selling price with a target margin: price = cost ÷ (1 − margin %). Add allowances at their face value outside your margin math, and keep material costs current with supplier pricing so the number you quote is the number you earn.
How do pool builders price a pool?
Pool builders price a pool by building it on paper first. You break the job into cost categories, estimate quantities and costs for each, add the costs of running your business, and then apply a markup or margin to reach the selling price.
The two ways it goes wrong are missing costs and the wrong math. A forgotten haul-off or a markup mistaken for a margin can quietly eat a large share of the profit you planned.
The rest of this guide walks through both: what to include, and how to turn cost into price.
Pool cost categories to estimate
Estimate each category from the design, site visit, and your current supplier and subcontractor pricing. Typical drivers are listed so you know what to measure.
| Category | What it covers | What drives the cost |
|---|---|---|
| Design & engineering | Plans, engineering, surveys | Pool complexity, site, jurisdiction |
| Permits & fees | Building permit, HOA fees, utility fees | Local fee schedules |
| Excavation & haul-off | Dig, grading, soil removal | Volume, access, soil and rock |
| Steel | Rebar, forming, steel labor | Shell size and engineered spec |
| Plumbing | Pipe, fittings, drains, returns, labor | Run length to the pad, number of features |
| Electrical | Power to the pad, bonding, lighting circuits | Distance to panel, panel capacity, features |
| Shotcrete / gunite | Shell material and application | Shell surface area and thickness |
| Tile & coping | Waterline tile, coping, setting labor | Perimeter length and material choice |
| Decking | Concrete, pavers, or stone and labor | Square footage and material |
| Interior finish | Plaster, aggregate, or other finish | Surface area and finish type |
| Equipment | Pump, filter, heater, sanitation, automation, lights | Model selections and features |
| Start-up & cleanup | Fill, chemicals, start-up visits, cleanup | Pool volume and your process |
| Job overhead | Supervision, equipment rental, dumpsters, portable toilet | Job length and site needs |
Company overhead — office, insurance, vehicles, sales commission — is covered by your margin or by percentage operating expenses, explained below.
Markup vs margin: the formulas
Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. They use the same dollars but different denominators, so the same percentage gives you different prices.
- Price with markup: price = cost × (1 + markup %)
- Price with margin: price = cost ÷ (1 − margin %)
- Convert markup to margin: margin % = markup % ÷ (1 + markup %)
- Convert margin to markup: markup % = margin % ÷ (1 − margin %)
Worked example: markup vs margin (hypothetical numbers)
Suppose a hypothetical pool's estimated cost is $50,000 and you want to earn 35%. Here is what happens depending on which math you use.
| Method | Calculation | Price | Gross profit | Actual margin |
|---|---|---|---|---|
| 35% markup | $50,000 × 1.35 | $67,500 | $17,500 | 25.9% |
| 35% margin | $50,000 ÷ 0.65 | $76,923 | $26,923 | 35.0% |
All figures are hypothetical and rounded. The point: a 35% markup is only about a 26% margin. If your business needs a 35% margin, applying a 35% markup under-prices this job by about $9,400.
Which should you use?
Margin is usually the better target for setting price, because your overhead and profit goals are naturally a share of revenue. If you know your company needs a certain percentage of every sale to cover overhead and profit, price to that margin.
Markup is still common for individual catalog items and subcontractor pass-throughs. That is fine, as long as you check the blended margin on the whole job before you send the proposal.
Whichever you use, be consistent. Mixing the two across estimators is one of the easiest ways to end up with jobs that look profitable on paper and are not.
Gross margin vs net margin: account for operating expenses
Gross margin is price minus job cost. Net margin also subtracts the expenses that scale with each sale, such as sales commission, financing fees, warranty reserves, or a company overhead percentage.
If commission is a percentage of the sale, a hypothetical $76,923 job at 35% gross margin and an 8% commission keeps about 27% after commission. Model these expenses on every job so you know your true net, and set a minimum margin you will not quote below.
How to handle allowances in a pool price
An allowance is a budget amount for something the customer has not chosen yet — landscaping, a fence by others, or upgraded lighting. It is included in the contract total, and the final amount is reconciled once the customer chooses.
Allowances are pass-through money. Add them to the customer's total at face value, but keep them out of cost, margin, and profit calculations — and do not apply commission percentages to them. Otherwise a large allowance inflates your apparent margin and your commissions.
Hypothetical example: a $76,923 pool plus a $5,000 landscaping allowance is an $81,923 contract. Your margin is still calculated on the $76,923 pool, not on $81,923.
Spell out how overages and savings are handled in the contract. Our construction proposal template has example allowance wording.
Step by step
Build pricing templates and assemblies
Most pool builders sell variations of the same build. Pricing templates turn your estimating knowledge into a repeatable system.
- 1
Group costs into assemblies
Bundle the items that always go together. A "pool shell" assembly might include excavation, steel, and shotcrete, with quantities calculated from length, width, and depth.
- 2
Drive quantities from a few inputs
Use formulas so perimeter, surface area, and volume calculate from the dimensions you enter. Tile, coping, finish, and start-up chemicals then price themselves.
- 3
Turn choices into selections
Equipment, finishes, and decking materials become dropdowns with their own costs. The salesperson picks the option and the price updates.
- 4
Set guardrails
Define a minimum margin, standard draw schedule, and default allowances, so every proposal follows the same rules no matter who builds it.
Keep prices current with supplier pricing
A pricing template is only as good as the costs inside it. Equipment, tile, and other materials change price, and a template built on last year's costs can erode margin on every job.
Review supplier price lists on a regular schedule, update the items you use most, and give every proposal an expiration date so you are not honoring old prices indefinitely. When costs move, re-check the margin on proposals that are still open.
Change orders need the same discipline. Decide whether a change order is priced at today's supplier cost or at the price locked in when the contract was signed, and apply that rule every time. See our change order template.
Pool estimating in Ardovia
Ardovia's pricing tool lets you build formula-driven pricing templates from sections, objects, and products linked to your catalog. Catalog items can be priced by markup, margin, or a flat price, with location-specific pricing for multiple branches and a price history for every change.
Allowance items are added to the contract total but always excluded from cost, margin, and profit, and templates can set minimum and warning net margins that include operating expenses like commission. The Heritage distributor integration links catalog items to Heritage products and syncs branch-level pricing, with each change written to price history; SCP / Pool360 is coming soon. Learn more about pool builder estimating software.
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Frequently asked questions
How do you calculate the price of a pool build?
Estimate the total cost of every category — design, permits, excavation, steel, plumbing, electrical, shotcrete, tile and coping, decking, interior finish, equipment, start-up, and job overhead. Then divide the total cost by one minus your target margin. For example, a hypothetical $50,000 cost at a 35% margin gives a price of $50,000 ÷ 0.65, or about $76,923. Add allowances separately at face value.
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 35% markup on a $50,000 cost gives a $67,500 price, which is only about a 26% margin. To earn a 35% margin, the price must be $50,000 ÷ 0.65, or about $76,923. The numbers here are hypothetical.
Should allowances include profit?
No. Allowances are pass-through budget amounts for items the customer has not chosen yet. They are added to the contract total at face value but should be excluded from cost, margin, profit, and commission calculations. Any overage or savings is reconciled with a change order or credit once the final choice is made.
What overhead should be included in a pool estimate?
Include job-specific overhead directly in the estimate, such as supervision, equipment rental, dumpsters, and portable toilets. Cover company overhead — office staff, insurance, vehicles, software — through your target margin, and model sale-based expenses like commission as a percentage of the sale so you can see your net margin.
How often should pool builders update their pricing?
Review supplier pricing on a regular schedule and whenever a major supplier announces changes, and update the items you use most first. Give every proposal an expiration date so old pricing is not honored indefinitely, and re-check margins on open proposals after costs change.
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