Feb 4 in Sales
Markups and Margins on Outsourced Work
I am trying to work out pricing for my various SEO and website packages. I would like to have relatively clearly defined packages ready when I am talking to clients.
If you outsource a piece of work entirely (e.g. website) how much do you mark it up?
I totally get targeting a 60% margin for work done in-house. But marking up outsourced work that much — the prices start to feel premium.
So, for example, we design and build premium custom websites in-house that we sell starting at $5900 for a 7-page site including 5000 words of content.
I can outsource a 7-page website with 5000 words of content for $3250. I think it is likely to be a nice site but our premium sites are really great.
To get a 60% margin, I would need to sell the outsourced site with content at $8200 — much higher than our in-house premium sites.
So (at least) one of a few things is wrong here, either
- we are currently underpricing our premium sites at $5900
- my cost to outsource client sites (with this vendor) is too high
- I shouldn't expect a 60% margin reselling websites
- I am underestimating the price tolerance of these niche markets
I expect it is a combination of a few of these but I would love to hear your thoughts.
William
3
6 comments
Markups and Margins on Outsourced Work
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