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How much do you add on when outsourcing projects?
What is reasonable?
beckie




msg:788807
 1:42 pm on May 14, 2004 (gmt 0)

I outsource a lot of database design, flash, and logo projects. These people are much better than I am at it.

How much do you add on to the cost to the client to make some money yourself?

I do spend a lot of time being the 'middleman', so I can definitely justify an extra amount. The question is, "How much is justifiable and reasonable?"

 

Leosghost




msg:788808
 3:19 pm on May 14, 2004 (gmt 0)

depends entirely on where you are ...
In France if we make 100 euros or dollars or whatever ...and we are self employed ( running our own business of whatever sort ) we then pay 56 % or euros or whatever to the government in compulsory heath and retirement insurance ( don't pay it they take you to court and seize your assets ..house n all ...dont make any money they say you owe them an amount that they "estimate" ..don't or cant pay it they do the same....starting out in business? ..they make you pay it "up front" ...otherwise they don't let you do business ..if you trey ..they do all the above ..aand maybe you go to jail too ) ...glad you live where you do?...: ))

What's left... we pay 12% to 50% tax on it ...
We must charge at all times around 20% TVA (sales tax in another name ) ...

So everyone here multiplies by 2.2....

you outsource for 1000 euros ...you charge customer 2200 euros ....
( you will "net" about 200 euros on this deal ..before you pay your rent , light , phone , ISP , server..wages ..food etc! )

( this is why we have a stagnant economy and 10% unemployment ).....and a public deficit of 65% of GDP..

mattglet




msg:788809
 5:17 pm on May 14, 2004 (gmt 0)

And I once thought it would be nice to live in France...

-Matt

Fortune Hunter




msg:788810
 9:49 pm on May 14, 2004 (gmt 0)

Not really friendly to entrepreneurs over there in France are they.

Beckie:

I base my mark up on the price of the service and what I think the client will pay. For example, if I can find a graphic designer who will do a logo for $200 I will double the price to the client if I think I can fit it in.

My point is that you will probably find this a very individual choice and it will depend on the client, project, and your cost to get the work done.

Fortune Hunter

Leosghost




msg:788811
 10:08 pm on May 14, 2004 (gmt 0)

entrepreneurs

actually in France is semantically equivalent to
"Vaches lait" . : (

my agent ( when I had one in the UK used to take another 50% "on top" for selling my artwork or illustrations ...and for supporting the insufferable client and saving me the experience of doing so )...

percentages




msg:788812
 8:59 am on May 16, 2004 (gmt 0)

300% minimum.....If I think the client won't ware that then we do it in-house and end up on about a 150% mark-up.

Most (95%+) will agree to the prices at 300+%, for the tricky ones we decide whether they are worth the effort of doing it in-house.

Storyteller




msg:788813
 1:31 am on May 21, 2004 (gmt 0)

Thinking in terms of markup is a wrong idea altogether. Always go from what your time is worth, and you're safe. Calculate how many hours you'll have to spend managing the outsourcing process then multiply by your hourly rate - that will be your premium on this particular job.

You can outsource to someone for $XXX and have to hold their hand all the way through, or hire another person for 2 x $XXX and just have it done. The idea of markup just doesn't work in this very common scenario.

espeed




msg:788814
 8:22 am on May 21, 2004 (gmt 0)

I always bill out at $125/hr., and if I need to subcontract something, I look for the best deal -- note that this does not mean the cheapest labor.

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