Where TSA cost-plus mark-up actually belongs, by service category — and the line at which it stops being cost recovery and starts being margin.
A Transition Services Agreement priced cost-plus is supposed to recover the seller's cost of providing a service, plus a thin margin for the trouble. When the mark-up on a commodity service crosses into the twenties, it is no longer cost recovery. It is the seller monetising the buyer's lack of alternatives.
Here is the buyer-side read on where mark-up belongs, as a representative benchmark range, not a quote:
| Service category | Defensible mark-up band |
|---|---|
| Commodity IT (hosting, email, endpoint) | 3–8% |
| Transactional finance / payroll processing | 5–10% |
| Specialist / scarce engineering support | 10–15% |
| Anything quoted above ~15% | Challenge or carve out |
The move is not to argue the mark-up down line by line at signature. It is to set a category cap in the pricing schedule, so a 30 percent number on a commodity service never appears in the first place. The cap is one clause. The argument it prevents is twelve months long.
One letter every two weeks. One tactic, one benchmark, one pattern. Short, signal heavy, buyer-side.
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