Hi all. When subcontracting work for/from another company (using own equipment, no mileage reimbursements, etc), what is the average/going rate as a commission % one should receive? I assume it would be 75%+ as the other company is only performing the administrative/paperwork side of it.
Thanks for the insight!
I’m not sure but if I was to sub out work I’d prob do 60%.
Correct. If utilizing all one’s own equipment, insurance, fuel/no mileage reimbursements…basically performing and completing the job from A-Z, shouldn’t this be the floor? The business subbing the work only does the invoicing. I believe Jersey mentioned on a podcast that 75% should be the absolute minimum.
You market and land the job, do the invoicing and contacting for the sale of the job, etc. - there has to be a charge for that the other company doesn’t have to think about.
Basically a finder fee I guess? And if they don’t do a good job who’s reputation is at stake. (Hint: Both of you, but who’s are you more worried about?)
So, not so low that the sub isn’t all in, but not so high that you wash your hands of it. Word of mouth makes or breaks a business.
Therefore decipher between a “Finder Fee” and walk away from it, and a “Sub-Contractor Fee” and be involved.
a business ideally would have a pricing structure that supports a 50% cap for operations wages, employee insurances, taxes, vehicles, supplies etc. (anything a sub would have,do, provide)
that 50% would ideally be satisfactory to an independent contractor (the other 50% is allocated to marketing, finance, admin and profit which may not be a direct expense but represents the involvement and sustainability of those areas past present and future, since they all had a share in the job being procured and available to sub in the first place. many model cleaning companies pay at 50% to independents
60,75% is irrelevant, the resulting pay for what is put into the job should be satisfactory to the group that would be interested in subbing work
calling a sub who is already well established with a full schedule is unlikely to want to take on sub work