Daniel Nisbet

Episode 82  |  October 16, 2018

Working with vendors: Who pays?

At some point while you work with clients, it become inevitable that you'll need to bring in a third party product, service, or company to work on the project.

Aside from how to hire or find that resource, one of the biggest questions I hear is how to handle paying them. There's usually two avenues you can take: make the client pay them directly or pay them yourself and charge the client back.

Both options have their pros and cons.

Let's start with making the client pay. The beautiful part about this, is that they have the direct relationship with the vendor. If anything goes wrong between those two, it can stay between them. A good example of what I like to make the client pay directly for is web hosting. Over the years, I've learned I don't enjoy handling this myself. It's not what I do and I don't enjoy it. I don't want to deal with the monthly or yearly fee and billing.

Going this route means I have to be there to help set up the service. While that can be a downside, once it's set up, you don't have to worry about it. I also sell this as a positive to the client: they own their website outright no matter if they work with me or not.

So how about paying the vendor yourself?

Off the bat, the nice thing is that you can tack on an additional fee to the cost. Common ranges I've seen go between 10% to 30%—you have to figure out what's appropriate for the type of service and its cost. I usually go this route if I'm doing any print work for a client.

It gives me one opportunity to go through and make sure that everything's coming out the way I intended to. If there's any kind of issue, it gives me the opportunity to rectify it before the client sees it. It takes a lot of stress off their shoulders as well as mine, because I know what I'm looking for when I'm dealing with a printer. What's also great about going this route is that if I ever decided to change the vendor that I work with, a client doesn't even need to know. It would feel like a seamless transition to them.

On top of that, if I can get a better deal elsewhere, I'm not locked into having to work with that same vendor over and over again.

Generally speaking, this route has saved my bacon more than a few times. I started doing this after having a client place a business card order only to find the vendor made a printing error. The stress we both went through wasn't worth it.

At the end of the day, we all want to make sure that our clients are having a positive experience. We want to make sure that anybody who is helping us achieve a result for our client are doing it at the same level that our client would be expecting of us.

While there are situations where alternative options come up, these are the two you'll run into the most. You don't need to commit 100% to one or the other—and you shouldn't. That said, if you can pay the vendor and get the quality control check, it's a good default. You'll look more professional to your client and they'll appreciate getting the work moved off their plate.