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Pricing · Jul 21, 2026 · 11 min read

Why a flat markup on fulfillment cost never improves the P&L

A flat markup assumes every account costs you the same to hold. It does not. Two clients at identical spend can differ by a factor of five in how much of your week they consume, and none of that difference appears on your fulfillment invoice.

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The variable that predicts your cost is not ad spend. It is decision volume: how many times a month someone at your agency makes a judgment call, writes an explanation, or absorbs a client anxiety.

So your price sheet needs a second axis. Score every prospective account as low, standard, or high decision volume and attach a fixed dollar amount to each band on top of the fulfillment cost. A dollar amount, not a percentage, because the work is not proportional to spend.

Three costs are almost always missing when we audit a partner pricing model: unbilled account management time, sales cost amortized over expected tenure, and churn drag. Load them in and the margin you thought you had usually drops by half.

A floor is only useful if you can say it out loud without flinching. Ours: nothing enters the book below 45% gross margin after those three costs, and nothing below a fixed monthly minimum regardless of percentage.

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