IT Consultants/Contractors...Markup on HW?

Philbert

Hi,

IT Consultants/IT Contractors.

When providing hardware as part of your service what kind of markup(if any) do you put on hardware?

Am very interested in your replies.

Thanks.

snappieT

I charge for labour only. If the person is ordering a €400 graphics card versus a €40 graphics card, it's still the same amount of work for me. Standard rate for sitting down at the PC, opening the PC, having to use my screwdriver inside the PC etc.

Philbert

snapscan1212p wrote:

I charge for labour only. If the person is ordering a €400 graphics card versus a €40 graphics card, it's still the same amount of work for me. Standard rate for sitting down at the PC, opening the PC, having to use my screwdriver inside the PC etc.

Thanks snapscan. But do you take into consideration the time it takes you to source and collect/take delivery of parts? And if so, do you incorporate this into your labour?

Nuttzz

15% profit margin (not Markup!) in general for HW

dahamsta

Nuttzz wrote:

15% profit margin (not Markup!)

There's a difference? Apart from political correctness in front of customers that is, which doesn't apply here...

Nuttzz

dahamsta wrote:

There's a difference? Apart from political correctness in front of customers that is, which doesn't apply here...

yes there is. if something costs you €10 and you sell it for €15 thats 50% markup but only 33% margin. A lot of people make the mistake of assuming they are the same.

snappieT

In general, I bring most necessary cards with me. A cheapo GFX card, 56K modem, NIC, sound card, IDE cable etc. I get these back in in bulk. If the person wants their own choice of, say GFX card, usually they seek my advice on which one to get, and that's where I get my profit on the ordering of the item on their behalf. Also, since I have to return to the premises to actually installl the card, I have 2 call-out charges.

I'm sure there's a more profitable way, but I'm happy with my way, as are all my customers. I do no advertising. I'm purely by word of mouth. I give each new client 5 of my business cards, and it works from there.

De Rebel

Sorry, but i'm going to offer a contrarian opinion here. And will probably get eaten for it.

In my experience, a lot of IT people are almost too honest, to mathematical in their outlook, and not financial savvy enough.

This country, in almost every aspect of its business dealings, is full of sh1sters who will r1de joe public for every cent they can take. The Banks, builders and property developers, clothes shops, cd retailers, etc would be at the top of that list.

Your baseline should be to maximise your profit. Frankly, if you can sell a printer that costs you €500 for €750 because the lazy millionaire buying it wants it delivered, installed and all problems that occur in the next 3 years solved free gratis, then good luck to you.

That may sound ridiculous. But consider this. How many industries out there make margins of 50%, 60% and 70% on a daily basis. Of the ones I worked in, cosmetics, pharmaceuticals, white goods, healthcare all have the potential to do so, and many others besides. And that’s without mentioning "financial services", the legal “profession”, accountancy firms, etc. who harbour among them the slimiest money grabbing weasels of all.

So why shouldn't a hard working god fearing IT consultant make a few quid along the way. You invest your time and effort researching product and brands, understanding a customer's requirements and recommending most appropriate solutions, being up front and giving an honest opinion and coming back time after time taking mobile calls late at night and ulimatly resolving issues that have nothing to do with you.

Stop whimpering and stand up and be counted, and charge whatever the market will pay. That’s how every other industry works.

MrPudding

De Rebel wrote:

Sorry, but i'm going to offer a contrarian opinion here. And will probably get eaten for it.

In my experience, a lot of IT people are almost too honest, to mathematical in their outlook, and not financial savvy enough.

This country, in almost every aspect of its business dealings, is full of sh1sters who will r1de joe public for every cent they can take. The Banks, builders and property developers, clothes shops, cd retailers, etc would be at the top of that list.

Your baseline should be to maximise your profit. Frankly, if you can sell a printer that costs you €500 for €750 because the lazy millionaire buying it wants it delivered, installed and all problems that occur in the next 3 years solved free gratis, then good luck to you.

That may sound ridiculous. But consider this. How many industries out there make margins of 50%, 60% and 70% on a daily basis. Of the ones I worked in, cosmetics, pharmaceuticals, white goods, healthcare all have the potential to do so, and many others besides. And that’s without mentioning "financial services", the legal “profession”, accountancy firms, etc. who harbour among them the slimiest money grabbing weasels of all.

So why shouldn't a hard working god fearing IT consultant make a few quid along the way. You invest your time and effort researching product and brands, understanding a customer's requirements and recommending most appropriate solutions, being up front and giving an honest opinion and coming back time after time taking mobile calls late at night and ulimatly resolving issues that have nothing to do with you.

Stop whimpering and stand up and be counted, and charge whatever the market will pay. That’s how every other industry works.

Harumph!

MrP

Paddyo

Are you invoicing the client for the Hardware? If so get about 10-15% or as someone else has said - as much as you think the client is willing to pay.

If you are buying from a distributor the the price you buy at should allow for the markup. If you are buying from a retail shop the client could get peed off if he sees the same part at a cheaper price.

You should always at least charge for the time spent advising on and sourcing the hardware/software.

Paddyo

On another note--

How much do people charge for IT consulting and installation/setup?

SouperComputer

it depends on the client really, how much they appricate your time, how hard the product is to get, how much R&D you have to do to pick it out. Always try to thing of the "value" of a good/service rather than cost.

I usually apply about 15-20% margin, sometimes more for "messy" items that need extra support or handholding.

Labour I charge 65ex vat Callout, which includes 1hr labour. 65per hour after in 15min increments. This will probably go up to 85 in a while, ideally you want to be taking equipment back to base for work were its more cost-effictive. You could then charge a collect and return fee.

Charging a bit more for labour means you can afford to be more flexible and give your clients extra service. Cutting it to the bone means more stress and an unprofitable business. Start on the high side, then work your way down if you need to. Again charging more gives you more room to accomadate.

If you are not setup already, start off as a sole trader. Limited liability means nothing if you are not insured. Start off as sole MAKE SURE YOU GET INSURED!