Pricing Strategy for Your Biomedical Repair Shop
Pricing Strategy for Third-Party Biomedical Repair Shops: Getting the Numbers Right
Pricing is one of the most uncomfortable topics in the biomedical service industry. Most shop owners learned their craft as technicians, not as business strategists — and many undercharge for their work because they have never done the math to know what their work actually costs.
This post covers how to think about pricing for the three main revenue streams in a third-party biomedical ISO: time-and-materials repairs, preventive maintenance visits, and flat-fee service contracts.
The Foundation: Knowing Your True Cost of Service
You cannot price intelligently without knowing what it costs to deliver service. For most biomedical ISOs, this includes:
- Direct labor cost: Your technicians' fully-loaded hourly cost (salary, taxes, benefits).
- Parts cost: The actual cost of parts plus procurement overhead.
- Vehicle and travel costs: For field service, vehicle costs plus technician travel time.
- Equipment and tool costs: Calibration costs, test instruments, and hand tools.
- Software and administrative costs: Your CMMS platform and administrative staff time.
Pricing Time-and-Materials Repairs
For break-fix repairs billed on a time-and-materials basis, your invoice includes labor hours, parts cost plus markup, and any travel fees.
Setting your labor rate
A typical labor rate for a BMET at a third-party ISO in the U.S. ranges from $90 to $180+ per hour depending on geographic market and device complexity.
Parts markup
Standard parts markup for biomedical repair shops ranges from 15% to 35% above cost. The markup covers procurement overhead and inventory carrying costs.
Pricing Preventive Maintenance Visits
PM visit pricing should reflect the actual time required to perform the PM — including travel, setup, documentation, and any consumables used.
Per-visit pricing
For one-off PM visits, bill for actual time plus parts and travel. Some ISOs publish flat per-visit rates for common device types to simplify quoting.
Contract PM pricing
In a service contract, PM visits are typically priced at a per-unit-per-period rate rolled into the monthly fee.
Pricing Service Contracts: The Annual Calculation
A service contract monthly fee should recover estimated PM labor, consumable parts for PMs, an allowance for unscheduled repairs (if covered), administrative overhead, and your target margin.
The most common pricing mistake in service contracts is underestimating the repair allowance. Price contracts with historical repair data where possible, or build in explicit carve-outs for high-cost repairs.
The Value Argument: Why Your Price Should Not Be the Lowest
The way you escape commodity price competition is by being unambiguously in the professional segment: better documentation, faster turnaround times, professional service reports, and a track record of compliance you can demonstrate with data.
When you can show a client three years of 97% PM completion rates and same-day service reports, the client who is choosing the lowest price is not your best client anyway.
FAQ
What is a typical labor rate for a biomedical technician?
Labor rates for third-party ISOs in the U.S. typically range from $90 to $180+ per hour for time-and-materials repairs, depending on the market and device complexity.
How should a biomedical ISO price a service contract?
Service contract pricing should cover estimated PM labor, consumable parts, an allowance for repair labor and parts, administrative overhead, and your target margin based on actual cost analysis.
Should a biomedical repair shop mark up parts?
Yes. Marking up parts above your cost is standard practice — it covers procurement overhead, inventory carrying cost, and sourcing time. Typical markups range from 15% to 35%.