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What is your current markup percentage for outside purchases, and do you have one markup across the board?
Also, if you charge a markup on printing, for example, do you bill for the Production Manager's time (quoting/sending jobs to print/Purchase Orders/proof review, etc.)? Is the Production Manager function non-billable?
Hi - According to Second Wind's
2014 Annual Agency Survey Report
, agencies are achieving an average markup of around 20% on printing, photography/illustration, and other outside services. Regarding billing production manager time, the answer is yes, bill whenever the PM works on specific client jobs, like collecting estimates for a print job, or sitting in on client-specific meetings. The average national hourly rate for production functions is $120. The same applies to every agency employee; if they are working on a client assignment, bill the time!
Absolutely markup product, lest you just want to be the bank for the client. We use a 25% markup on all outside services. Mind you, that does NOT mean the Price x 1.25. Instead, you're trying to achieve a 25% AGI on the printing of the job. Look at Tony's excellent explanation of markup math.
And, yes, production supervision is a separate billable item.