Mark-up for Models?

A client wants me to handle looking for and getting SLAs made.

Do designers typically mark-up the cost of the models? If so, what is a reasonable % mark-up for rapid prototypes?

The client is assuming we do the legwork to deal with RP shops for free but I think there should be something in it for me to do all the quote gathering and CAD file transfer work.

The mark-up may be all I make on this one so any advice and tips on typical practices welcome.

I think that depends on the type of contract you have with him from the beginning. Are you being paid per job in a lump sum, hourly…? If it’s hourly you can charge the time it takes you to do all the leg work. If it’s something he is adding onto a lump sum, then you should talk to him about increasing the pay. Having money talks with clients sucks but you have to do it.

15% - 20%

This is an interesting question.

I think you should base your decision on your level of involvement. Do you get a sourcing fee if the item gets produced? If you do, then just amortize the model/mock ups. If you don’t then you should add between 5-20% (big range I know) depending on the cost.

Also be careful, you should always let your clients know what something may cost upfront, you don’t want a deal to go sour because of a couple of hidden charges/fees. We make a lot of outsole models, and I think they cost about 60 bucks to get made, and to have RP’s made cost about 300 bucks, but this won’t even come up if we do production for the outsole (we eat it mock up/model costs).

They’re called dispersements. You purchase an item on behalf of a client. A typical mark up is 15% that accounts for your time to purchase, and manage is pretty common.

good to know!

It’s actually disbursements (with a ‘b’)

(Apologies for being snippy)

yes. 10 - 15% is what I usually charge. Depends on client relationship and dollar amount. Goods’ purchase is typically always charged a markup for reimbursement of time involved and also for risk. In business, risk is a commodity that is bought, sold, or insured.

Some companies that do this also adopt policy of pay when payed. Don’t do it, it is an absolute guarantee to piss off everyone involved, and be refused business next time. Pay up according to terms negotiated, and charge your markup accordingly.

The jerk is asking for the name of my model shop. I am going to tell him no, I don’t divulge that info. I think he is trying to bypass me, use my legwork and go to the source to not let me make any money for my management time. What a cheapskate. It’s like free sourcing and quote comparison work. I am going to quote a competitive price and he can take it or leave it. I figure he’d be hard prssed to do the same leg work himself and find a better price. The client doesn’t even own CAD software to do the file preparation work himself yet wants me to do all this for free.

Client dependent obviously, but I generally run 15%ish.

@mpdesigner, you’re obviously doing more work than you had anticipated (either hourly or lump sum it doesn’t really matter), so address this with the client. If you want a 3D print, it’s going to cost.

You are correct…my knowledge of accounting is just enough to make me dangerous.

Don’t take it personally, everyone wants it done cheaper.

However, learn from it. Be upfront with the client. If they want it done cheaper, they have to do it themself. If they want you to manage it, you will be happy to, but you mark everything up 15%.

The downside to disBursements is that you have to cover the cost of the models. If the client fails to pay you, you are on the hook for the models. If they are to pay for the models directly, then you can’t expect to have them pay a mark-up. You can, however, expect them to pay for the time you spent getting the model maker lined up.

If you’re on a fixed bid…next time you will remember to add in that project management fee :wink:

PS: make your terms for any disbursements COD or no more than NET/15…cashflow is a small company’s best friend.