In practice
Sub-vendors work in the chain below a prime. They receive requirements from the vendor above them and submit candidates up the chain.
Each layer adds margin, so a sub-vendor’s bill rate is lower than the rate the end client pays.
How it shows up
The end client pays a prime at one rate. The prime pays a sub-vendor a smaller rate. The sub-vendor pays the consultant a rate that still leaves its own margin.
How a staffing team uses it
Work out your floor margin before you submit. In a long chain there may be little room, and it is better to know that first.
Common mistakes
- Not asking how many layers sit above you.
- Agreeing to a rate before checking your margin.
- Submitting the same consultant through another vendor in the same chain.
Frequently asked questions
How do I know my position in the chain?
Ask who holds the contract with the end client and who you would invoice.