Realistic Agency Margin

[Boo]

Does it matter so long as you are happy with your rate?

Yes, if the OP would be even happier with a higher rate.

Boo

[SussexSeagull]

Rubbish. A client has a certain budget to pay for a contractor.

Unless you always work for a fixed rate "I charge £400/day" to every client, regardless what they're willing to pay - in that case I can agree with you. But most contractors seem to negotiate every contract rate. If you always charge £400/day and saw an advert for a role you liked at £600/day would you still tell the agent "I want £400/day" though? After all, you're happy to get £400/day...

If it was advertised at £600 a day I would want £600 a day. However, if I was happy with this I wouldn't lose sleep on what the agent is getting on top of this.

Each to their own though.

[SussexSeagull]

Yes, if the OP would be even happier with a higher rate.

Boo

Then ask for a higher rate and if you aren't happy then don't do it.

[Wanderer]

So whats a reasonable margin for an agent? If the contractor is on 500, 600, or 700 a day how much would we expect the agent to be charging the client?

5-15% markup on your rate for an agency, probably up to 100% for a consultancy.

Which you can do by concentrating on your own rate and not worry about a figure you probably won't be able to find out.

I know how much the client was paying for my last 4 contracts. They either told me up front or it was no secret and I found out anyway.

[sunflower]

If your agent is a preferred supplier, they probably have a fixed fee. I've know cases when that is 9%-15%. Ask your agency if they are on the pls.

Some agents have mark ups of 35%-40% and will rip both you and their client off.

[psychocandy]

As I said before found out for one role that went dead and then re-appeared that agency was taking 35%.

[Kanye]

As I've posted before, I think of agents as my salesforce, so don't really have a massive motivation to minimise their rate.

I couldn't source and sell direct work for £600 or £700 a day so good look to them if they can do this and get more for themselves too.

[XperTest]

Might just be me, but personally I see a huge benefit in finding out the agent is on a higher margin (providing I am happy with my own rate, which I will be otherwise I wouldn't have taken on the assignment), as it makes my scope for a rate rise at extension time that much bigger once the client wants to keep me beyond the initial period/project. You can just eat into the agency margin based on the fact it's now a rolling contract with little maintenance/cost for them, instead of having to go through the painful process of getting a client to agree to a rate increase. It makes no sense to be bitter about these things if you ask me; I don't ask my local bakery what his margin is on the loaf of bread, so why would I do so for an agent who I need to get paid work?

[DirtyDog]

That is until you realise that every other contractor working on your project is taking home £100 a day more than you.

This will dawn on you when they rock up in their new BMW's and Mercs.....

The OP is absolutely right to be interested.

Of course, on all projects, all contractors MUST earn the same. Any difference in daily rate is down to the agency margin. It has nothing to do with the difference in ability / experience / skills.

[DirtyDog]

I'm not suggesting you should be angry with anyone. My point is you won't feel very happy when you realise you passed on £1,000's of potential earnings, because you were "happy" with the rate offered.

So far on this contract (assuming that we've worked the same number of days), I've invoiced £7200 less than one of my colleagues.

So far on this contract (assuming that we've worked the same number of days), I've invoiced £7200 more than one of my colleagues.

I feel neither happy nor sad about these facts - there was no scope to increase the rate, so I took a very good rate that I was happy with.

(FWIW, my car is newer and shinier than the guy that I have invoiced less than)