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In the tutoring space markup is about $65 per hour. Tutors are often making less than 25. I don't know if there are apps for it yet, but don't pay the middle ma

In the tutoring space markup is about $65 per hour. Tutors are often making less than 25. I don't know if there are apps for it yet, but don't pay the middle man.

SilasX 7y ago
Sorry for the nitpick, but I think you mean, "buyers pay $65" or "price after markup is $65"; markup is the difference between input price and sale price.
- deleted 7y ago
  [deleted]
- coding123 7y ago
  No worries about the nitpick! However, in the market of "In home" tutoring my wife was working for a company that was indeed charging around 85 to 90. Markup was 60-65, tutor was paid 20-25. (prices depended on quality of tutor).
  - SilasX 7y ago
    Oh yikes! I had just assumed you couldn't have meant a markup/price difference of $65! Thanks for the follow-up!
WalterBright 7y ago
Back in the 1980's when we sold compilers through the mail, we had deals with various mail order aggregators. They'd run full page ads with lists of software they were selling mail order, along with prices. I was horrified that they wanted us to supply them the product for less than half of what they were selling it for. No way, I thought, they're ripping us off. I was told that there was no other way. The reality of running an aggregator business is you have to double the wholesale cost in order to turn a profit. Most lay people terribly underestimate how much money it costs to run a business. And it was worth it for us because the aggregator was reaching far more customers than we could. Don't pay the middle man is nice in theory, but the middle man exists because they are worth the money.
- deleteme3212 7y ago
  >the middle man exists because they are worth the money. I strongly disagree with this statement. Rent seekers are everywhere and it is never guaranteed that they are adding anything of value to the system, and often they are only extracting.
  - WalterBright 7y ago
    > I strongly disagree with this statement. That means that businessmen who use middle men are incompetent fools. While that is impossible, it's highly unlikely.
    - WalterBright 7y ago
      Ack. I meant "possible".
- z3t4 7y ago
  I think the problem is that you have two markets that are inaccessible from either. The business buy from one market, then sell on another market. And make a profit based on how inaccessible the two markets are to each other. For example clean water can be very expensive where there aren't any, while basically free where there's plenty. So the business takes water from where it's free, then sell it where there's demand.
  - WalterBright 7y ago
    The term for that is arbitrage. Back in the 1980's, software was sold packaged in a box. It was much more expensive in Europe for the same box sold in the US. Several companies noticed this and began buying up big lots in the US, shipping them overseas, and undercutting those markups. The arbitrage was so successful the price difference was pretty much eliminated.
asdff 7y ago
On my campus the best tutoring businesses isn't chegg, but the former TA for the class that shows up in your library for $20 an hour.

In the tutoring space markup is about $65 per hour. Tutors are often making less than 25. I don't know if there are apps for it yet, but don't pay the middle man.

SilasX 7y ago

Sorry for the nitpick, but I think you mean, "buyers pay $65" or "price after markup is $65"; markup is the difference between input price and sale price.

deleted 7y ago
[deleted]
coding123 7y ago
No worries about the nitpick! However, in the market of "In home" tutoring my wife was working for a company that was indeed charging around 85 to 90. Markup was 60-65, tutor was paid 20-25. (prices depended on quality of tutor).
- SilasX 7y ago
  Oh yikes! I had just assumed you couldn't have meant a markup/price difference of $65! Thanks for the follow-up!

WalterBright 7y ago

Back in the 1980's when we sold compilers through the mail, we had deals with various mail order aggregators. They'd run full page ads with lists of software they were selling mail order, along with prices. I was horrified that they wanted us to supply them the product for less than half of what they were selling it for. No way, I thought, they're ripping us off. I was told that there was no other way. The reality of running an aggregator business is you have to double the wholesale cost in order to turn a profit. Most lay people terribly underestimate how much money it costs to run a business. And it was worth it for us because the aggregator was reaching far more customers than we could. Don't pay the middle man is nice in theory, but the middle man exists because they are worth the money.

deleteme3212 7y ago
>the middle man exists because they are worth the money. I strongly disagree with this statement. Rent seekers are everywhere and it is never guaranteed that they are adding anything of value to the system, and often they are only extracting.
- WalterBright 7y ago
  > I strongly disagree with this statement. That means that businessmen who use middle men are incompetent fools. While that is impossible, it's highly unlikely.
  - WalterBright 7y ago
    Ack. I meant "possible".
z3t4 7y ago
I think the problem is that you have two markets that are inaccessible from either. The business buy from one market, then sell on another market. And make a profit based on how inaccessible the two markets are to each other. For example clean water can be very expensive where there aren't any, while basically free where there's plenty. So the business takes water from where it's free, then sell it where there's demand.
- WalterBright 7y ago
  The term for that is arbitrage. Back in the 1980's, software was sold packaged in a box. It was much more expensive in Europe for the same box sold in the US. Several companies noticed this and began buying up big lots in the US, shipping them overseas, and undercutting those markups. The arbitrage was so successful the price difference was pretty much eliminated.

asdff 7y ago

On my campus the best tutoring businesses isn't chegg, but the former TA for the class that shows up in your library for $20 an hour.