Outsourcing Question? Want to expand my service offerings

by him77
1 replies
Besides selling website I want to start offering services like facebook ads and good adwords marketing.

I found a few people on upwork charging anywhere from $35 to $90 an hour to do such work for me.

How much would you mark up the price offering to a possible customer?

And how would you bundle it into a web site package offering?

Is it better to find a white label firm to do this ?

Thank you for your time!
#expand #offerings #outsourcing #question #service
  • Profile picture of the author hittjw
    When helping my clients to do staffing arbitrage using direct hired individuals, there is often a 5 to 10 times mark up. My CPA is firm on no less than a 5 times markup on direct labor costs.
    The short answer is to mark up price as much as the market will tolerate.
    There isn't much margin because the multiple often covers management, overhead, and paperwork associated just with having those staff. Add on top of that the cost of marketing and delivering services.
    If the going rate on Upwork is $35 to $90 an hour, then you'll need to value add the offer to be sold at $175 to $450 an hour. It might not be possible. You may have to back out overhead on the costs -- there may be need to restructure your offer.
    One way to do this is go up market. Selling to larger premium customers packages of work with a fixed amount of work and a large amount of value add deliverables like information -- that can be produced once and sold many times.
    It all really depends on what else you can offer. Maybe $35 to $90 is the top end for those services, so only use them on the front end.
    Ideally you'll have a certain package of services that you can eventually direct hire individuals at a direct hire rate. The person charging $90 might have 2/3 of that in overhead, with really only a $30 per hour salary.
    You will also need to determine how much time you need to have the Upwork's people working so they are available when you have customers. What I've found over there is keep people busy or they will wander off.
    There are some really nice white label firms out there. Let them take care of the overhead associated with choosing and owning staff, instead use the white label to recover marketing costs who repeat purchase from you.
    White label has other benefits of being able to do work while you sell more, or do other work. They take care of most everything for you. There is just the problem of lock in.
    If you start using a white label then (a) doing get the service you expect, or (b) out grow them quickly, then you still may need to hire. In that case, hire project managers and marketers to on-board new accounts.
    At one time I was a hosting reseller because my company was doing internet marketing for clients. It worked out really well until I dropped that line of services. At that time customers get stuck with a new provider -- it caused some confusion when I turned off the reseller account.
    Before you line up contractors it will be a real good idea to find yourself customers. Find out how much they will spend. And, start a few customers as a pilot to make sure hiring from a freelance platform will leave you enough margin to be happy.
    Sincerely,
    Justin
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