The margin most resellers get wrong
Here is a deal. You sell a placement for $150. The publisher charges $70. Your margin is $80.
Except it is not, and the gap is large enough to matter.
The cost that goes missing
Around four out of five guest post deals require you to supply the article. The publisher is selling space and their audience, not editorial work.
So someone writes it. A freelancer at $20 to $30, a writer you keep on retainer, or you, on a weeknight. Whichever it is, that cost belongs to that placement.
The honest sum is:
profit = sale − publisher cost − content cost
On the deal above, with a $25 article, the real margin is $55 and not $80. That is a third of the profit, and it is missing from every deal, always in the same direction.
Why it stays hidden
Because the publisher's price arrives as an invoice and the content cost does not.
The $70 is a number someone sent you. The $25 is spread across a writer's monthly payment, or it is your own time, which feels free because no money moved. Costs that arrive as invoices get counted; costs that arrive as effort do not.
Multiply it out. A hundred placements a year at $25 of hidden content cost is $2,500 of profit that never existed. If you are pricing off the naive margin, you have also been quoting too low all year.
What it does to markup rules
If you price by rule — cost plus forty percent, say — it matters enormously which cost the rule applies to.
Apply it to the publisher's price alone and the article's cost comes straight out of your margin:
$70 × 1.4 = $98 sale price
$98 − $70 − $25 = $3 profit
Three dollars. Apply the same rule to both costs together:
($70 + $25) × 1.4 = $133 sale price
$133 − $70 − $25 = $38 profit
Same rule, same site, same client. The difference is entirely in what you counted as cost. The first version can turn a placement into a loss without anyone noticing until the year is over.
The other number that decays
Prices are quotes, and quotes have a shelf life.
A publisher who said $70 in March may say $110 in September. If you quote a client from a price you were given four months ago, the difference comes out of you, because you have already committed and they have not.
Every agreed price wants an expiry date on it — not to delete anything, just to say plainly this needs asking again before you quote it. A price you have not confirmed this quarter is a guess.
What actually needs recording
Four numbers per placement, and they are all easy to lose:
- What the publisher charged
- What the article cost
- What you sold it for
- When the publisher's price was last confirmed
With those, the margin is arithmetic. Without the second one it is optimism, and without the fourth it is history.