In today’s unpredictable business landscape, navigating uncertainties requires a keen eye on every aspect affecting your budget. One factor that often remains hidden is the standard practice of markups on hardware by Managed Service Providers (MSPs). Let’s delve deeper into why these markups aren’t just financial burdens but potential hindrances to your company’s growth and efficiency.
The Silent Financial Drain
The average MSP marks up hardware they are selling to their clients 20%-28%. This includes everything from servers and networking equipment to computers and peripherals. This markup hides beneath the surface, blending within the final invoice, impacting every hardware acquisition your company makes.
Why Markups Matter
The problem of unnecessary markups and fees goes beyond the wallet and touches many aspects of your business and your business relationships.
Immediate Financial Impact
The most tangible consequence of markups is the strain on your organization’s budget. These undisclosed costs accumulate with each hardware purchase, leading to a significant financial drain over time.
In a landscape where keeping costs down is key to success, unnecessary markups can put your company at a disadvantage. Not only do these markups affect your internal expenditures, but they also have a ripple effect on your end customers. Elevated IT costs can directly influence your product and service pricing, potentially resulting in higher rates that may be less attractive to potential customers.
Trust and Intentions
The practice of markups raises a critical question for businesses: Is my MSP recommending hardware based on genuine business needs or because it maximizes their profit margins? This uncertainty can erode trust and create a sense of skepticism about the motivations behind hardware recommendations.
The Annual Impact: Calculating the Hidden Cost
Let’s put this into perspective. If your company purchases 20 laptops annually, each with a base price of $1,200, a 20%-28% markup could add an extra $4,800-$6,720 to your yearly expenses.
To visualize this impact, consider that with the money spent on markups, you could have purchased an additional 4 to 6 laptops. Over a 3-year period, this translates to an opportunity cost of acquiring 12 to 18 additional laptops, almost a full year’s budget worth.
The Better Way: Transparency & Pass-Through Pricing
Zero Markup Policy
At Wireguided, we break away from the standard MSP practices by not marking up computers. This not only lowers annual IT expenses but allows clients to know recommendations we make are for the benefit of their organization and not our bottom line.
Beyond eliminating markups, Wireguided actively monitors vendor pricing and cost trends to find the best time to purchase hardware. We also leverage our partnerships with companies such as Dell, Cisco, and Microsoft to find out about future price changes to assist our clients with long-term budgetary planning.
Choose our pass-through pricing option for direct invoicing from the vendor. Wireguided also provides our clients with invoices from vendors ensuring complete transparency.
The Path Forward: A Future without Hidden Costs
Understanding the impact of MSP markups on your IT purchases is crucial for decision-makers. Wireguided invites you to embrace a future where transparency and trust redefine your IT partnership. Contact Wireguided today for your free IT budget review to uncover how much your organization could be saving. Discover the Wireguided advantage and usher in an era of informed and efficient IT budgeting.
Here’s to smarter spending!