Squeezing the agent's margin/markup at renewal

[kingcook]

Renewal time is almost here. Client has asked if i'd like me to stay on the uncompleted project. "Yes of course i would", says kingcook.

Agent has begun the phone calls asking how i'm getting along and if i've heard if the client are keen to renew.

Unbeknownst to the agent, i know his margin is 20% (or 25% markup).

IMO, agent has had his ROI and i want to grab some of that margin/markup (without passing on the cost to the client).

Should i be blunt and say, "you've had your ROI, now i'm looking for a bit of your margin"? Or is it best to just use inflation as a reason (increasing costs of B&B's, train fares, etc)? Or both

Just looking for opinions, what has worked best for people and what hasn't?

[northernladuk]

I don't think that is the approach. Doesn't seem like much of a negotiation.

You gotta prove your value and then set your rate (or vice versa). Prove you are invaluable to the project, tell them what you consider fair and then stick to your guns with the threat of you walking. Not a half veiled threat, agents will see straight through that. Be prepared to walk, if not you are probably pissing in the wind.

Maybe set something a but higher and let the agent offer what you would accept and so on. Just saying you got this and I want some won't work.

There have been a number of length threads about re-negotiating so hate to say it but if you do a search you will find some pretty good stuff.

BTW 25% is high, 20% isn't that bad. Absolute lowest for agents on fixed margins is generally about 12% so not that much wiggle room. Always worth knowing the agents take and second guessing what he will take. No point pushing him down to 5%, it just won't work etc...

[Goatfell]

I don't think that is the approach. Doesn't seem like much of a negotiation.

You gotta prove your value and then set your rate (or vice versa). Prove you are invaluable to the project, tell them what you consider fair and then stick to your guns with the threat of you walking. Not a half veiled threat, agents will see straight through that. Be prepared to walk, if not you are probably pissing in the wind.

I'd agree with that approach if you were negotiating with the ClientCo to justify a rate increase, but in this situation the ClientCo isn't in the loop.

Your case to the agent is "You've covered the recruitment expense, if I go then ClientCo will have to replace me, with the risk that one of your candidates may not get the gig. 15% margin is better than nowt."

[blinko]

I will add that 15% is usually the lowest a agency will go and that will usually be due to volume and PSL. so 15- 20% is about as low as it will get or it won't get past finance.

you should count yourself very lucky my agent makes approx 46% mark up on me !!!

OR

31% margin which isn't really fair but what can you do negotiation is the only way.....

[Wanderer]

I will add that 15% is usually the lowest a agency will go and that will usually be due to volume and PSL. so 15- 20% is about as low as it will get or it won't get past finance.

My agency takes 7% of the contract value.

you should count yourself very lucky my agent makes approx 46% mark up on me !!!

You are getting raped! Go and ask them for a payrise, they can easily afford to give you another 25% without even blinking.

[Wanderer]

You gotta prove your value and then set your rate (or vice versa). Prove you are invaluable to the project

Actually you don't need to prove your value to the project because you aren't asking the client for a rate increase.

The agent needs to prove their value to you as a business. Initially they had value based on the fact that they found the contract and recruited you to do it but since then all they've been doing is factoring the payments and a trivial amount of admin so they aren't worth that fat margin any more so they can give up some of it. Thank you very much.

[kingcook]

My skill is pretty hard to find, and the agent knows this (and i know this).

Without trying to sound bigheaded I have to take into account that my replacement will have to be found, also a bit of "ramp time" will be needed. And of course there's always a chance that the agent might lose business to another agency.

I like the sound of the tactic of going in high, and the agent haggling (which will hopefully get me what i'm after anyway).

I'd be happy to reduce the agent's margin to around 13%.

[Wanderer]

my replacement will have to be found, also a bit of "ramp time" will be needed. And of course there's always a chance that the agent might lose business to another agency.

Especially as you will be looking for a new job and telling every agent you talk to that the client are recruiting to spite the ex-agent for taking too much of the cake.

I'd be happy to reduce the agent's margin to around 13%.

That's the spirit, good luck!

[Taita]

Actually you don't need to prove your value to the project because you aren't asking the client for a rate increase.

The agent needs to prove their value to you as a business. Initially they had value based on the fact that they found the contract and recruited you to do it but since then all they've been doing is factoring the payments and a trivial amount of admin so they aren't worth that fat margin any more so they can give up some of it. Thank you very much.

Bit like asking for a discount on the fifth pint- you have made enough profit out of me thank you very much!

Seriously, if you feel you are worth more now than when you started, there is nothing wrong in asking for an increase in rate on extension. Does it really matter whether it comes from the client, the agent or both?

[blinko]

My agency takes 7% of the contract value.



You are getting raped! Go and ask them for a payrise, they can easily afford to give you another 25% without even blinking.

Mate tell me about it, I know this  But I am new to this and I now I know the ropes and so on. But when you don’t have anyone to show you how these things are done you are going to make mistakes.

My agency takes 7% of the contract value.

Well done earning such a high margain, you might be central to the project. The lowest I saw was 5% and that was when the funds were purely being passed through the agency. Although from an agency POV 7% return is awful. Either way well done.