question about pricing and standard markup

28 Jun 2010 - 2:08pm
3 years ago
2 replies
1541 reads
tamella
2008

Hello, I have a question I'm hoping a few can answer. 
I am wondering if anyone has a standard percentage range for marking up subcontractor rates on a contract? How much of a profit is considered fair for the prime to make?  Is it normal to mark up a subcontractors hourly rate by 20% or 50% or x%.  I'm trying to be fair but make sure I am making a profit as well as covering my costs and may have some that are unforeseen given this is time and expense contract and not fixed price. Thanks,Tammy
Tammy FritzPrincipal and FounderPink Frog Interactive, Inc.http://pinkfroginteractive.com


Comments

28 Jun 2010 - 5:05pm
Richard Daddieco
2009

Hey Tammy!!!

What a small world!  Most of the agencies in the NYC area kick it up to 50%!   Anything less and its not worth their effort, or so they say.  30% sounds reasonable for the burgh.  :)

Take Care,

Rich Daddieco



On Mon, Jun 28, 2010 at 5:20 PM, tamella fritz <tamella@pinkfroginteractive.com> wrote:

Hello, I have a question I'm hoping a few can answer. 
I am wondering if anyone has a standard percentage range for marking up subcontractor rates on a contract? How much of a profit is considered fair for the prime to make?  Is it normal to mark up a subcontractors hourly rate by 20% or 50% or x%.  I'm trying to be fair but make sure I am making a profit as well as covering my costs and may have some that are unforeseen given this is time and expense contract and not fixed price. Thanks,Tammy
Tammy FritzPrincipal and FounderPink Frog Interactive, Inc.http://pinkfroginteractive.com [1]


(((Please
29 Jun 2010 - 4:40am
Sean Pook
2008

I think it should really depend on the contract length plus your involvement. This is actually very similar to recruitment agencies adding a % for freelancers, but in my experience the % is lower for recruiters as our involvement is far less (should be anyway).

My simple rule - the shorter the contract the higher the %. 100% on a 9 month contract is cheeky to say the least. On the flip side, 10% on a one week contract is pretty much charity.

Depends on what services you are providing. If your resource includes on-site project management, regular meetings with the client yourself etc - then the % is higher. If you're simply sending a body to a client then the price should be less.

For full project assurance and regular management I'd say 50%-100%, for simply passing on a person on a lease I'd say 15% to 30%

Let me know if you have any further questions.

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