Vendor Markup Policy — 15% Administration Fee
Overview
Asymmetric applies a 15% markup on all third-party costs that the agency pays on a client's behalf before passing through to the client invoice. This policy covers the real costs of administering vendor relationships: payment processing, credit card fees, invoicing overhead, and the time spent managing third-party accounts.
The policy is not intended as a profit center — it is a cost-recovery mechanism. As Mark put it: "I'm not trying to make money on any of this stuff. I'm just trying not to lose."
The Rule
If the agency pays a vendor invoice and then bills the client, apply a 15% markup to the vendor cost before invoicing.
Exception
If the vendor invoices the client directly, no markup is applied. Simply pass the invoice along.
The distinction is clean: the markup compensates for the agency's administrative burden. If the agency never touches the money, there is no burden to compensate for.
Rationale
When the agency fronts a third-party cost, it incurs:
- Credit card processing fees on the original charge
- Payment processing overhead when collecting from the client
- Administrative time managing the vendor relationship, invoicing, and reconciliation
Without a markup, the agency effectively subsidizes these costs out of its retainer margin.
Practical Examples
| Scenario | Markup Applied? |
|---|---|
| Agency pays Moz $20/month, bills client | Yes — client billed $23 |
| Agency pays videographer $2,000, bills client | Yes — client billed $2,300 |
| Printer invoices client directly | No — pass invoice through |
| Vendor invoices client directly for hosting | No — pass invoice through |
A concrete example from practice: a videographer (Dan) was contracted at $2,000 per video; the client (Crazy Lenny's) was billed $2,500 — a $500 margin that covers the agency's coordination, invoicing, and administrative work.
Scope
This policy applies to all third-party costs paid by the agency, including but not limited to:
- SEO tools (e.g., Moz, Ahrefs)
- Videographers and freelance contractors
- Print and direct mail vendors
- Software subscriptions billed to the agency
For clients with many locations or high vendor spend (e.g., multi-location clients with per-location tool subscriptions), the cumulative impact of unmarketed pass-throughs can be significant — making consistent application of this policy especially important at scale.
Implementation
Account managers are responsible for applying the 15% markup at the time of invoicing whenever the agency has paid a vendor cost. Melissa Cusumano was tasked with communicating this policy to all account managers following the November 2025 operational sync.
When in doubt, the test is simple: Did the agency pay the vendor? If yes, mark it up 15%.
Related
- [1] (source discussion)
- [2]
- [3]