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How should I approach price negotiation?

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    How should I approach price negotiation?

    Hi All

    Newbie here. I have an interview Tuesday morning for a 3 month extendable contract. I've been in IT for years but this will be my first contract. Given the skills required, I seem to be an ideal fit, and the agency are certain that the job is mine.

    They seem a bit woolly about the rate though. When I first spoke to them they said it would be £250 a day. I said I wanted £280 a day and they OK-ed that without hesitation. This makes me wonder if I could have asked for more and got it, particularly as they seem anxious that the client doesn't find out what they've "agreed" with me. Does this mean that the client are likely to be paying them significantly more and that I should be asking for more too?

    The sums involved haven't been confirmed in writing. It's all been a bit casual if you ask me. At what point should I ask for more, or should I just be grateful for getting a job (if I do get it!) Or is it too late to ask for more? I get the impression that they are very relieved to have found someone with my skill set.

    Is it completely out-of-order and not the done thing to talk money with the client when I go to see them? Suppose they are paying the agency £500 a day. Won't they be unhappy to know I'm on £280? Or do contractors just shrug their shoulders about this and decide what they'll be happy with and leave it at that?

    Sorry if these are naive questions. I did have a look through the archive but didn't find much about this specifically.

    Thanks all!

    #2
    Here we go again!

    Another one who should have stayed permie... you're on your own dearie

    stand or fall on your own efforts

    Comment


      #3
      Originally posted by Gold Dalek
      stand or fall on your own efforts
      I'll stand on my own efforts, GD, thank you. I'm not asking for tips on how to negotiate or how to do the job better than I already can. I can do this one as well as anyone else.

      I'm asking about contracting conventions. Being new to the game, by definition I don't know what these conventions are and need to find out. Amazing though it might seem I thought a contractors' forum might be just the way to find out. Staggering naivety, obviously.

      Sure, I can find out by making the mistakes myself and learning from that experience. But it goes without saying that that's not a great way of getting answers to what I thought were pretty straightforward questions. If I get them wrong I could lose the opportunity, which I'm not prepared to do.

      If the answer is that there are no straightforward questions in this game, then say so. Please don't patronise me and make yourself look like an oaf.

      Comment


        #4
        I hear mini-skirts work a charm....at least that's what (allegedly) keeps milanbenes5 in the job

        Comment


          #5
          Originally posted by ClarissaG
          [..]
          The sums involved haven't been confirmed in writing. It's all been a bit casual if you ask me. At what point should I ask for more, or should I just be grateful for getting a job (if I do get it!) Or is it too late to ask for more? I get the impression that they are very relieved to have found someone with my skill set.
          [...]
          To my experience only from the beginning. Negotiating a big payrise later on would be hardly justified from a business point of view, unless you took on more responsabilities or critical projects. Their point of view, indeed, is that once you accepted a certain rate, that's your value, period.
          I've seen much of the rest of the world. It is brutal and cruel and dark, Rome is the light.

          Comment


            #6
            Knowing what to charge is difficult. If you are already on site, then you can often find out what other contractors are on, and if you pitched too low, you can go for a rise at extension time. Otherwise it is a case of deciding how much you want that contract, how much they want you, and how much they are prepared to pay. Pitch too high and they might say bye bye. Pitch too low and you get stuffed. I guess I am just saying the obvious. But you can find out what sort of rates are typically charged for your skills and location from various web sites. Google should help. That at least gives you a feel for the competition and realistic rates to ask for.

            I've known contractors pitch too low, but the client raised the rates on request as they didn't like people to be unhappy. I've also known a contractor who asked for an absurd amount and got it because he didn't want the job, and only took it due to the rate. But they only kept him for a year, then got rid of him, and he was unemployed for years, eventually changing careers to teach English in South America before returning to the UK as a permie.

            Comment


              #7
              Originally posted by ClarissaG
              Suppose they are paying the agency £500 a day. Won't they be unhappy to know I'm on £280? Or do contractors just shrug their shoulders about this and decide what they'll be happy with and leave it at that?
              I know someone who the client were paying 650 a day to the agent for, but he was only getting 150. The client didn't care about the 150 at all, but got fed up with the 650 and dumped him.

              Comment


                #8
                OK thank you. So I guess that even a brief, casual conversation would be deemed as "accepting the rate". It was literally an exchange of sentences. The much longer conversations have been about the job itself.

                I think next time I'd better be more cagey -- or more assertive. I guess a lot depends on what you understand as the going rate.

                Thanks.

                Comment


                  #9
                  If it's your first contract, and you are happy with 250 a day (which is a lot of pints/burgers/chocolate bars) then take it. You will learn where you stand in the market with experience, and getting all tetchy about rates in an interview because of something you read on a bulletinboard is unlikely to endear you to the (prospective) client.

                  If you want post your location and skillset then maybe someone can give you and idea what you should expect.

                  Welcome to contracting.

                  Comment


                    #10
                    Originally posted by ClarissaG
                    I'll stand on my own efforts, GD, thank you. I'm not asking for tips on how to negotiate or how to do the job better than I already can. I can do this one as well as anyone else.

                    I'm asking about contracting conventions.
                    What are you wittering on about? You are a business... you have to negotiate... there are no "conventions" you silly billy.. You want the most, the agent wants you to have the least... and the client usually couldn't give a toss either way - it's whatever anyone can get away with... try to see the invoice from the agency to give you an idea of the margin (hard but not impossible)... and put it down to experience.

                    Now go and make me a cup of tea... and if you feel like thanking everyone for their help... get your tits out, take a piccy and post it on test please delete

                    HTH
                    Last edited by Gold Dalek; 21 May 2006, 21:46.

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