Let me preface this by saying I know all MSCs work differently. However, is there a ballpark figure as to how much the MSCs make compared to the shopper? For example, if the shopper makes $25 for a shop, does the MSC generally make twice that amount ($50)? Three times the amount ($75)?
Obviously, the MSC has overhead, such as schedulers, editors, website platform fees, advertising, utilities, rent, etc. I'm just wondering if anyone knows what their take is, generally. Just curious.
No, and I don't feel it's any of my business to ask. I just sincerely hope it's enough to cover expenses and stay in business, so that I can keep making a living...
I did read in Forbes or Business Week or someplace like that the the salesman who clinched the McDonald's contract a few years ago earned 20% commission on the $2,000,000 deal.
I know in restaurants that you need to price your menu at 3.5 times the cost of the food, to cover overhead and fixed costs, labors, etc. I do not know if there is a similar rule of thumb in place for MS'ing. In retail, a common markup is 35%. In jewelry, it's often in the100's -- very high overhead, and many jewelers pay staff on commission.
If you'd like a high level overview on how business is handled in the consulting world, I can chime in a little there... At least in the field I'm involved in:
Whenever we contract out to a 3rd party for our clients, we typically factor in a 15% cut right off the bat (e.g. My contractor will charge me $1, so I'll pass over this charge to my client at $1.15). We also pass over all expenses, per diem, etc. to the client as well, as part of the required expenses for the project. Then for the consultants (me and my team), we'd charge them our standard billing rates, along with a budget hours 'not to exceed' for everyone involved in the project.
If ever we go over budget, that's when the change orders come in (as long as it's justified, of course! Like client-driven scope changes, unexpected circumstances, etc.). So this is where the company makes their money from the project.... Within us consultant's billing rates, my salary is literally fraction of that. So the remainder of our billing rates is overhead, profit, consumables (office, materials, etc.), etc.
Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 28 year old male and willing to travel! Badged for Denver International Airport.
Let see they pay @#$%& to the schedulers like $1 to $3 for scheduled and successfully completed shop completed shop. Editors similar unless in house. Very little overhead and fixed expenses. The MSP is most likely making at least 4x base rate shop pay if not more which it most likely is. So shop pays $25 thy make at least $100 to as much as $250. All reimbursements are paid by the client not the MSC. That is why you should always ask for bonus money till it is a fair rate for you to do the job.
Shopping Western NY, Northeast and Central PA, and parts of Ohio and West Virginia. Have car will travel anywhere if the monies right.
In general, the MSC has the highest expenses just to get the contracts and administrate them. They have many costs to properly run the business. It is not what they gross but what they net that should be evaluated. We probably earn more per individual shop where cumulatively the MSC earns more, which is how most businesses work.
There are many, many things that would influence this. For instance. Many people take Sonic shops from that particular MSC at $5-$10. I have several that I routinely get $$65-70 for. Their contract is negotiated on the entire set of shops, but the shops don't cost them the same. To get a good multiplier, we would have to know what their average cost per shop is. I would guess it's most likely in the $15 range. My educated guess would be that they get somewhere between $30 and $50 for that shop.
There is a shop that I used to do a ton of at $24 per. I was once told by one of the locations that they pay $50 per shop. I also know that I was well above the average for that shop. I would guess, again just an educated guess, that their average was around $13 per.
There is another shop that I do that the scheduler flat out told me they get $20 per for. They pay the shoppers for that shop at $10 and they are RARELY bonused. I would guess their average would for statistical purposes still be at $10 per.
At the same time I do hotel shops that pay $25 plus reimbursement. The reimbursement comes in the way of reversing the charges. That shop requires quite a bit of editing and more back office overhead. I would guess it costs them as much to edit that shop as I get paid, meaning they would need a larger multiplier.
I would guess that for the average non-reimbursement shop, the MSC gets somewhere around 2x-3x their AVERAGE shop fee, which for some MSCs varies greatly.
Talking tough is easy when it's other people's evil and you're judging what they do and don't believe.
Edited 1 time(s). Last edit at 05/17/2017 02:41AM by bgriffin.
A very combative gas station owner once told me that he paid $50 a month for the mystery shopping program for each of the several locations he owns.
He said he didn't have a choice, the brand mandated the program, and he "had" to pay for it. Don't know if all of them work that way. The job hits the job board at $9 plus gas & $1 "small purchase" reimbursement.
I find the "speculation" of how the MSCs are earning huge amounts interesting, if for no other reason than we are paid to be observant and sometimes the answers are readily available on an MSC's website. For example:
I went to the "We go look" site to sign up to have a car evaluated. They were charging me $50 for a basic "look". When I get these basic "look" assignment offers, they offer to pay me $20. They used to offer to pay $25, which happens to be why I don't do them anymore.