Adding mark up on outsourced work?

[Lettherightonein]

Namechanged for this.

If you outsource some of your work as you are busy, how do you charge your client? If the outsourced resource is cheaper than you, do you still charge your client your hourly rate for the hours they did or do you just pass on the cost by reflecting your hours to cover the cost only?

I have just finished my accounts for last year and have realised even though I earnt quite a bit more, my take home isn't that different as I outsourced so much but generally used cheaper freelancers and only charged my clients the cost. Am I being nice & ethical or a fool!?!

When I freelanced many years ago, I'd bill my usual hourly price for any time I spent liaising with other freelancers, checking and integrating their work, then pass on the cost of outsourced job as-is.

I would have charged my normal hourly rate. They are getting the work of 'your' quality.
If a factory uses apprentices to make 'your' washing machine, you don't get it cheaper, but equally it is the same quality as the other ones, with the same guarantee.
It is not about being ethical, it is about charging the value for the job. If I was a customer of yours, I would demand you outsource it because it is cheaper, but also demand the same standard as your normal work.

Gosh, don't undersell yourself

I used to manage professional services type contracts many moons ago. Basically we were paying a consultant to manage some contractors who did a bunch of stuff. Not only did the consultant charge by the hour for every scrap of time they spent managing their end of things, they added 12% to every bill the conractor sent them, then sent it to us. :)

Thanks for the replies.Interesting that some of you do charge your rate. Food for thought....

I would also charge my rate unless I was trying to be competitive on price to win a tender. I need to find more freelancers who charge less than me though, most charge about the same.

My clients buy from me. So I can't see how I could charge them more than my rate... That's why I struggled with outsourcing. Also the work I had to put into outsourcers to make sure the work was at my standard and sounded enough like me, meant it wasn't lucrative enough.

I guess it does depend on your industry maybe?