Reply to: What's a standard agency cut / percentage

[timh]

Now based on the above ongoing discussion how do u know what is the agent's margin/markup etc.I have been asked whats my daily rate and i give him/her a number.I was under the impression that thats an all inclusive rate and the agent does not get anything from my figure.Is my understanding correct?

Your understanding is correct.. Your agent will add a lump on top of what you say when he talks to the client, and not tell them what you're getting and what the agency's getting. Agencies do not like it if their margin is anything less than extortionate - which is fine, it's just part of the ecosystem. Sometimes, however, their markup will scare off clients and lose you work.

You can usually get them to tell you their cut with a bit of perseverence - they may act a bit shocked that you're asking because it's in their interests to propagate the idea that we shouldn't talk about it. The only other way of finding out is by talking to the end client (which is the main reason why an agent will say "don't discuss rate, leave that to me!" before you go to an interview).

Sometimes you find out when the client doesn't renew your contract because you're too expensive - then you have the discussion and he/she is shocked to find that you're actually working for peanuts and the agency is raping both of you.



Since I'm back in this thread, I might as well update: As of this morning, my wonderful agency representative has informed me that I'll be getting the full meagre sum I requested - though I'm not sure if he's done that by reducing his take or shafting the client, or a bit of both. Hopefully the former.

[srennocks]

Hi,
Iam a newbie to contracting and have been called by many agents after they have seen my CV.Now based on the above ongoing discussion how do u know what is the agent's margin/markup etc.I have been asked whats my daily rate and i give him/her a number.I was under the impression that thats an all inclusive rate and the agent does not get anything from my figure.Is my understanding correct? Please clarify...
Cheers
AJ1977

Ok, first mistake was quoting a rate... don't! Either get in early with the question, 'what will the client pay?' (and take with pinch of salt) or just give a vague answer that your rate is between x and y, but isn't something you can quote until you've visited the client and assessed the requirement in more detail.

The agents markup/margin might be fixed if they're on a preferred supplier agreement, so you can always ask - might be as low as 7%. Simple answer is, there is no easy way of knowing the agencies rate - tends to be something you discover well into the contract. Best advice is not to worry about it too much and just continue to push for the highest rate for yourself.

Agents margin will be on top of your quoted figure.

There is a difference between margin (which is the agency works to) and markup which is your perception of whats happening. For example, with you getting £250 and the agency getting £60, they see an margin of about 20% but you see a markup of 24%.

But as Mal said, you either like the number you're getting or you don't.

Hi,
Iam a newbie to contracting and have been called by many agents after they have seen my CV.Now based on the above ongoing discussion how do u know what is the agent's margin/markup etc.I have been asked whats my daily rate and i give him/her a number.I was under the impression that thats an all inclusive rate and the agent does not get anything from my figure.Is my understanding correct? Please clarify...
Cheers
AJ1977

[Royston Vasey]

R E A S O N A B L E ?!?!?!


NOTHING IS REASONABLE!!!!!!!!

I suppose you're right - good point

[Maxamus]

I guess my agency taking £30 from £400 is reasonable then.

R E A S O N A B L E ?!?!?!


NOTHING IS REASONABLE!!!!!!!!

[Royston Vasey]

I guess my agency taking £30 from £400 is reasonable then.

[malvolio]

Malvolio - it's a good project, in a really convenient location, for a nice company.. I've spec'd everything up, we've had meetings and organised timescales etc, I consider them my client already - and dropping out of the process without further effort would be letting them down. It's just this agent pissing about which is interfering with the process.

Nobody's signed anything; what's the legal position if after fruitless further efforts we just ditch the agency? I haven't done this before and wouldn't normally contemplate it, but...

If the agency is likely to lose you the business, discuss it with your potetnial client. It looks like the agency has done zero work to get the gig, so they should be on a minimum to cover the cost of invoice factoring - no more than 10%.

Then if you want the job and the client wants you, let the client argue with the agency - they're the ones with the money - although it would do no harm to let slip what you expect to receive for your side! I've been in the same position (acting for the client, that is) and I've told an agency to either go with what I'm telling them, or I find someone else. Faced with low income or none at all, the agency is not likely to argue.

[timh]

For example, with you getting £250 and the agency getting £60, they see an margin of about 20% but you see a markup of 24%.

Well, I've been trying to see it from their perspective (which is a margin of 24%) and that's too high IMO. From a different angle they're adding 32% onto the £190/day they're trying to palm me off with, which looks even worse!

[abc]

..in South Wales / SW England..?

In the last year or two I've been working through agencies in London who typically take £40-50 of a £340/day rate. Now I've got an agency who wants to take £60 of a £250/day rate in Wales - surely that's excessive?

All feedback welcome.

t.

My agency is on 12.5% (for me) and 25% for the guy that sits next to me!

And I'm sure they would take even more from a total newbie.

(These are %margin figures).

[Pondlife]

There is a difference between margin (which is the agency works to) and markup which is your perception of whats happening. For example, with you getting £250 and the agency getting £60, they see an margin of about 20% but you see a markup of 24%.

But as Mal said, you either like the number you're getting or you don't.

[timh]

Malvolio - it's a good project, in a really convenient location, for a nice company.. I've spec'd everything up, we've had meetings and organised timescales etc, I consider them my client already - and dropping out of the process without further effort would be letting them down. It's just this agent pissing about which is interfering with the process.

Nobody's signed anything; what's the legal position if after fruitless further efforts we just ditch the agency? I haven't done this before and wouldn't normally contemplate it, but...

[timh]

Thanks, I was thinking that 20% is the most I'd be able to stomach.
(And, funnily enough, 20% is exactly the figure me and the end client are happy with.)

(I know 40/day of 340/day is abnormally low - I counted myself lucky on those!)

[malvolio]

Although yuo need to be a bit careful with margins on lthe lower end of rate scale - there is a lower limit to what the agent can take and still make a commercial margin (but £60 a day isn't it... )

The real question is are you getting the rate you want? I guess not, in this case, so walk away.

[tim123]

..in South Wales / SW England..?

In the last year or two I've been working through agencies in London who typically take £40-50 of a £340/day rate. Now I've got an agency who wants to take £60 of a £250/day rate in Wales - surely that's excessive?

All feedback welcome.

t.

Yes it's excessive, bit IME 40 pounds from 340 is abnormally low, not typical.

tim

[Maxamus]

its normally around 15-20%

my agency takes 16.4% to be exact