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Marking up things
So one of the things we do is design and build studios. We’re currently working on finishing our latest studio. I try to be transparent by posting the individual prices for the equipment my subcontractor purchases. My subcontractor charges list price, and I’m sure he’s charged dealer prices. That’s not something I benefit from. I figure my client can see the price for everything online. I’ve been doing this for several years, but with this client they are complaining that there’s a mark-up. I need to make something off of this project. My question is what do you think is fair for marking up production equipment? Labor is easier to mark-up. Thanks so much.
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4 Replies
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Hey Greg,
it is difficult to work out what is the right mark-up, if any?
Do you do it by percentage, or flat fee?What to take in to account when explaining the mark-up:
Are you paid upfront for buying the equipment?
Did the client tell you what to buy, or did you research and propose the kit?So many variables.
If the percentage fee is a one off on a separate line, it should be OK.
But, if you have marked the kit up, and supplied the original price to the client, but not stipulated this mark-up in your T&Cs it might be a bit more difficult to claim for.Just giving you an opinion.
Atb
Mads -
Hi Mads, typically I do it by a flat fee where I just mark up labor and custom items like a custom light grid and cyclorama.
Yes we are paid upfront for buying the equipment, as the equipment can cost well over $100,000
We tell the client what they need, or in rare instances they give us a wish list, but that doesn’t include additional items like cables and connectors. We research and propose a full list. That takes a lot of work!
The whole enchilada is easy to quote without showing any mark-ups. But when they just as for 2 additional lights to be hung on the grid, I can’t hide the mark-up, but I deserve to be paid a fee for my time. Does that make sense?
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Hey Greg,
That all sounds fair.
Now you just need to get the client onboard with understanding how much work is put in.
I’m guessing that you also have a grace-period where you support the client, so they don’t have to return to dealer for support.Many reasons for why your charge is fair.
Atb
Mads -
Thanks Mads. Actually they never have to return to the dealer. As far as I’m concerned we are the dealer. Thanks for your help.
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