Re: Agencies-response (markups)

Subject: Re: Agencies-response (markups)
From: Sella Rush <SellaR -at- APPTECHSYS -dot- COM>
Date: Wed, 14 May 1997 13:09:24 -0700

A couple of points that haven't been made yet, I think. I'm not sure
that 50% is totally outrageous, I'm just commenting on the arguments
supporting it.

1. The argument that markup is not the TW's business and does not
affect the TW is specious. Agencies don't take a TW's hourly rate and
then slap 50% on top of that--they can't. Everyone knows that a market
will bear only so high a price, and it is this price that determines
what share goes to the writer.

2. You really can't compare physical products (such as books) with
services in this case. One of the reasons books stores or any other
retailer requires such a high markup is because they have to maintain a
significant inventory, a large percentage of which must be bought but
will never sell. Another reason is that books will only generate a
profit once--when they're sold. In contrast, agencies do not gamble on
any investment in a tech writer--they don't pay non-working writers
(except those that offer vacation time). Any money they pay out to the
writer has already been supplied to the agency by the client. The
agency does, of course, gamble with expenses for marketing people and
client seduction, but this isn't the same thing--retail stores also have
these types of overhead costs. Also, the tech writer generates profit
with every hour worked.

The reality is that the markup will be whatever the market can stand.
If there are lots of tech writers and no jobs, or if there's only one or
two agencies who have a lock on the local market, the markup will be
high. As always in these capitalist <pig> days, the tech writer has to
involve themselves in the business, know what their worth is, and fight
for it.
Sella Rush
sellar -at- apptechsys -dot- com
Applied Technical Systems, Inc. (ATS)
Bremerton, Washington USA
Developers of the CCM Database

>From: Walker, Arlen P[SMTP:Arlen -dot- P -dot- Walker -at- JCI -dot- COM]
>Sent: Wednesday, May 14, 1997 6:04 AM
>Subject: Re[2]: Agencies-response
>From: Arlen P Walker on 05/14/97 08:04 AM
> To be very crass about it, 50 percent mark-up on a product is not
> outrageous. And in this context, the TW is the product. (By the
> way, I suspect it was way below that on my projects with them.)
>Jim makes a very valid point here. I wonder if anyone who gets upset at
>this kind of markup buys books at their local Half-Price Books store? That
>book you buy for $4.98 (or $7.98, or whatever) cost them about 25 cents
>tops. If you're skeptical, try this experiment: take a couple of books that
>you want to get rid of off your shelf and sell the books to them (unless
>they're fantasy/SF -- give me first shot at those ;{>}). Count your money.
>Now go back in a couple of weeks and see what they've priced them at. (This
>is not meant to be a dig at HPB. They have some good reasons for such a
>high markup.)
>Throughout many industries a 50% markup is normal. Trace the price of
>software through the channels.
>Have fun,
>Chief Managing Director In Charge, Department of Redundancy Department
>DNRC 224
>Arlen -dot- P -dot- Walker -at- JCI -dot- Com
>In God we trust; all others must provide data.
>Opinions expressed are mine and mine alone.
>If JCI had an opinion on this, they'd hire someone else to deliver it.
> TECHWR-L (Technical Communication) List Information: To send a message
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