Outsourcing: How big are your margins?

12 years ago

It depends on your price point and the quality of your service and of course which service it is. I tend to pay about 50% to outsource webdesign but then I do have quite a low price point at the same time I'm expecting top quality work.

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SkyeFWP

12 years ago

Personally my margins are 70-90% but the client Is paying for my strategies and direction rather than hard product.

I'm struggling with how to systematise my marketing consulting business as I cant outsource it because you need to see the business to know what to recommend.

How are you guys freeing up your time?

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redcell1

12 years ago

Originally Posted by maxrezn

I've just recently launched a marketing agency and my goal is $20,000 in monthly billings through selling direct mail, SEO, social media services, and consulting. Completely possible with a running sales pipeline, but I need to outsource 90% of the work in order to have the time I need for sales.

My question is, what do you typically pay for your outsourced services in relation to what you charge for them?

Percentage wise this can be from 50% to 90%. Then again it depends on what your outsourcing vs selling. Your profit margin on SEO might be higher then direct mail.

Originally Posted by SkyeFWP

Personally my margins are 70-90% but the client Is paying for my strategies and direction rather than hard product.

I'm struggling with how to systematise my marketing consulting business as I cant outsource it because you need to see the business to know what to recommend.

How are you guys freeing up your time?

Well your like a doc. You see the business to see what to recommend then outsource the work that needs to be done.

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drees5761

12 years ago

If your outsourcing then pay 40-50% to the person doing the work, obviously that can be negotiated but that's what i tend to get from the people i do work for.

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andreasup

12 years ago

Originally Posted by maxrezn

My question is, what do you typically pay for your outsourced services in relation to what you charge for them?

I agree that you have to build your expertise into the percentage equation you charge.

You also have to consider that if you find high quality people to outsource the work to, that you have to pay them a little higher percentage to make sure that those quality providers are willing to keep taking your projects.

One of the biggest mistakes can be to find quality providers to outsource to and then try to negotiate them down to take a smaller price.

Ultimately your outsourced workers are doing the bulk of the work for you so make sure you find great people who do quality work and pay them a good percentage to make sure they stay available to you.

If you don't have quality providers than you are the one who ultimately pays the price of unhappy customers.

Good luck to you.