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50% mark-up on a product (the tech writer) I guess is OK if the
agency can get it, but geez, that sure seems high to me.
I worked for Willow Valley Software, a *working agency* (the owner writes
on contract, has writers as both employess and 1099s, uses them on-site and
off-site), and one of our contracts was with Hewlett-Packard. The agency is
expected to mark-up the empolyee's rate by a minimum of 25%, and is not
permitted more than 35% mark-up.
This is in writing, and strictly enforced by HP, because the agency must
disclose the employee's rate on every invoice, and make their records
available for inspection at any time.
I have contracted with other agencies, and always like it when the facts
are disclosed to me. I want to know that the agency is not going below
about 22%, otherwise their cut afer employer-paid taxes is so low that they
may have payroll cash-flow problems (if I'm paid as a W-2, if as a 1099,
that's different). I also don't want to see them billing much above 35%,
since the client generally is only aware of the invoice rate, not what I'm
getting paid. I don't want the client to feel that because they are paying
big bucks, I must therefore walk on water. I do my very best, and
expectations are generally high, but I don't want to cultivate expectations
of completely unrealistic performance.
My 2 cents.
Lynda Straus
Sr. Technical Documentation Specialist
The Money Store
Sacramento, CA
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