Quick answer
To calculate AMC charges, add up the cost of the preventive visits, the expected breakdown visits, a parts reserve (for comprehensive AMCs), a share of your overheads, and then your margin. Adjust for equipment age, number of units and site conditions. Rates vary by city, brand and scope, so build your own numbers instead of borrowing someone else's.
Why most AMCs are underpriced
Small service businesses often set AMC rates by asking what the competitor charges, then going a little lower. The problem: the competitor may be losing money too. Underpricing shows up later, as unpaid breakdown visits and technicians stuck on low-value contracts during peak season.
The five building blocks
| Block | What it covers | How to estimate |
|---|---|---|
| 1. Preventive visits | Scheduled services in the contract | Visits per year × cost per visit |
| 2. Breakdown visits | Complaints during the year | Expected complaints × cost per visit |
| 3. Parts reserve | Comprehensive AMCs only | Likely part replacements, weighted by age |
| 4. Overheads | Office, telecaller, phone, software, fuel | Monthly overheads ÷ active contracts |
| 5. Margin | Your profit and risk buffer | A percentage on top of blocks 1–4 |
Cost per visit
This is the number most owners skip. Take a technician's monthly cost (salary, incentives, phone, travel allowance) and divide it by the visits they realistically complete in a month. Add consumables used on a typical visit. Do this separately for helpers or senior technicians if their cost differs.
Expected breakdown visits
Use your own history if you have it. If not, start with a conservative estimate and correct it at renewal. Older equipment, heavy usage and dusty or coastal sites usually mean more complaints.
Parts reserve for comprehensive AMCs
A comprehensive AMC means you pay for parts. Estimate which parts are likely to fail in a year for that equipment and age, and put aside a share of their cost in the price. Exclusions and caps (see comprehensive vs non-comprehensive AMC) keep this reserve under control.
A worked example
Illustrative numbers only — not market rates
Non-comprehensive AMC for one split AC, three preventive services a year.
- Cost per visit: ₹400 (technician time, travel, consumables)
- Preventive visits: 3 × ₹400 = ₹1,200
- Expected breakdown visits: 1 × ₹400 = ₹400
- Overhead share: ₹300
- Total cost: ₹1,900
- Margin of 30%: about ₹570
Price before tax: about ₹2,470. Your own figures will differ — the point is the method.
Adjust for the real-world factors
- Equipment age — price older units higher, or offer only non-comprehensive cover.
- Multiple units at one site — travel is shared, so a lower rate per unit can still be profitable.
- Distance — sites far from your base cost more per visit.
- Usage — commercial equipment running long hours needs more attention.
- Response commitment — a faster promised response ties up technicians.
- Season — for AC work, summer complaints compete with paid jobs. Factor that in.
Simple pricing structures that work
Many small businesses offer two or three clear options per product instead of a custom quote every time:
- Basic — non-comprehensive, fewer preventive visits
- Standard — non-comprehensive, more preventive visits
- Comprehensive — parts included with listed exclusions, for equipment under a set age
Fixed options make quoting faster for your telecaller and easier for the customer to compare.
Review your prices every year
Pricing is a guess until you have data. At each renewal, compare what the contract earned with the visits and parts it actually used. Units that consistently cost more than they earn need a new price or a different contract type. That review is much easier when every complaint is logged against its contract in your AMC software.
To see how contracts and complaints sit together, look at our AMC management software overview, or check setups for your trade on the industries page.
How AMCFlow helps
- Every complaint is logged against its AMC with a complaint number — the history you need to check whether a contract is priced right.
- Record an AMC per unit with start and end dates, so multi-unit sites are priced and tracked unit by unit.
- Expiry dashboard shows AMCs nearing expiry, giving you time to review the price before renewal.
Frequently asked questions
How do I calculate AMC charges?
Add the cost of preventive visits, expected breakdown visits, a parts reserve for comprehensive AMCs, a share of overheads, and your margin. Then adjust for equipment age, number of units and site conditions.
What is a fair AMC price?
There is no single fair rate. AMC prices vary by city, brand, equipment age and scope. A fair price covers your real cost per visit and risk, plus a margin.
Should I charge less for multiple units at one site?
Often yes. Travel and setup time are shared across units, so a lower rate per unit can still be profitable. Work it out from your cost per visit.
How often should I revise AMC prices?
Review at every renewal. Compare what each contract earned with the visits and parts it used, and adjust units that cost more than they earn.
Is GST charged on AMC contracts?
Tax treatment depends on your registration and the nature of the service. Check the applicable GST rules with your tax advisor before quoting.