Do I break my own rules for this client?

[Jonathan]

No it does not state this. It's never been an issue. Plus on some items I make 100% or 1000% markup. Depends on the item.

For transparency sake as well as flexibility, like you noted, some you may markup 20%, others 1000%+, you may consider adding something similar to one of the items below to your agreements/contracts/initial_engagement_form:

A standard minimum of xx% markup is added to hardware provided by %companyname%

%companyname% may mark up merchandise at a reasonable percent as deemed by %companyname%

 

[britechguy]

What you're talking about is only true for small MSPs.

Which, to be perfectly honest, is what I simply presume covers everyone here in that space (and we all know I am not). Nothing that's ever been mentioned or shown suggests that most of our MSP membership are of "the large variety." Perhaps I'm entirely wrong, but I don't have any information that suggests "clean slating" is something that's going on frequently for the folks I read here.

 

[Sky-Knight]

Which, to be perfectly honest, is what I simply presume covers everyone here in that space (and we all know I am not). Nothing that's ever been mentioned or shown suggests that most of our MSP membership are of "the large variety." Perhaps I'm entirely wrong, but I don't have any information that suggests "clean slating" is something that's going on frequently for the folks I read here.

My observations match your own.

Just be aware there are MSPs out there that have bolted in the finance fees for a desktop, waps, switches, and routers, along with their tech stack and M365. They then markup that entire mess, and that's the monthly cost per user paid.

In these cases, the MSP shows up for "onboarding" with an entirely new network. EVERYTHING gets replaced. There is no fiddling with old at all, the entire enterprise is rebuilt wholesale into the new standard.

And the companies that can do that junk are the ones making millions in profit. Compared to them, everyone here is a pizza tech.

 

[britechguy]

And the companies that can do that junk are the ones making millions in profit.

Yep. And, in my opinion, are making it for doing mostly a whole lotta nothing after the initial setup.

It is (relatively) easy to set up a really low maintenance ecosystem when you have absolute control over everything from the outset and that allows you to let, in the words of Tim Rice, "the money keep rollin' in, from every side."

I've always thought the lives of our denizens are, shall we say, a bit more complicated and on a significantly smaller scale, which makes the tolerance for complication possible.

Even when it comes to MSPs, "tool to task," applies.

 

[Sky-Knight]

@britechguy I used to feel the same way, but it's not money for nothing. It's business critical infrastructure as a service.

The business doesn't have to think about machine rotation, maintenance, of any endpoints anywhere. None of the connective infrastructure, and mostly don't have to think about their cloud infrastructure too.

It congeals 100% of IT reality into an operating expense, zero capital investment required.

That has tremendous value! But it obviously doesn't fit the SMB very well. The fact of the matter is most SMBs do not have the budget to handle IT correctly. But they run that risk to get to where they can, such is the nature of business. Things change when you transition to "enterprise." And there are opportunities to service businesses all along that spectrum.

What's changing now is the general liability and cyber liability insurance providers are clamping down hard. They're done paying for ransoms of any kind. So a TON of SMBs are facing the threat of no coverage at all or fork over. Many choose the former, and if the guy tying the shoe strings together doesn't do his job correctly... one negative cyber security event ends the company.

This isn't new of course. It's just easier to happen today than it was ten years ago, and several orders of magnitude more likely.

I do not personally like critical business infrastructure to be owned by anyone other than the company that uses it. But 2020 happened, that cat is well out of the bag now.

 

[britechguy]

I do not personally like critical business infrastructure to be owned by anyone other than the company that uses it.

Amen to that! And this is but one of the reasons (age being another) that I have no desire to enter the space being discussed. The phrase, "I'm too old for that ****!," applies.

I also don't like being entirely responsible for the computing infrastructure of someone else. Thus, I stayed in the now-dying break-fix world. Surgical strikes and I'm out.

 

[brandonkick]

I can see why someone might entertain allowing the client to source their own hardware if they object to the markup, but I can't say I'd be comfortably adopting that into the MSP "basket" already in place with this client.

So here I have my fleet of proven, maintained and well groomed OptiPlex desktops while the the customer decides to add more hardware directly on their own. Ok. So now they pay me for MSP, but... it doesn't cover everything. So crap hits the fan and Bob's computer doesn't work any more. I find that Bob's machine isn't one of my machines.... but I want my customer to be happy. So I inform them that "someone" on their end has to deal with getting this machine replaced. Since it wasn't mine to begin with... do I bill them for hourly for the repair? Or do you fold it into the MSP plan with an Asterix saying you don't deal with warranty related issues since you didn't provide the equipment?

I can see the client getting unhappy, one of those "it'll never happen situations" that happens and everything is at standstill until this gets sorted out. Typically later in the day on a Friday no less.


I know it's a newer relationship and you want to start out solid, but the only option in my mind was the one in which they get the equipment through you and just pay the 20%. That's the overhead on your end and not only is it entirely fair, it will save you and the customer both a bunch of headache / heartache.

 

[Blues]

I was talking about after an MSP is already setup in my comment obviously on-boarding is a whole process to the initial MSP and its pricing and quote. I was referring to new equipment being added to an existing MSP agreement.