Photo from PPDIGITAL
There’s another great article over at Freelance Switch, about pricing and quality of work. Lea makes a great point and I agree with the fact that $10-15 / hour sounds great for some freelancers who live in less than first world countries. In Romania the medium wage is about $450 / month, so you can imagine that most freelancers would be happy to earn >$1000 / month.
Still… I don’t entirely agree with this pricing strategy:
How do I do it?
When I started out as a freelancer I used to charge $30 / hour. Just to get the idea what this means to a freelancer from Romania, that allowed me to earn 3 times as much as I earned at my last full time job. Now my hourly rates range between $50 - $80 / hour, although I do prefer pricing per project.
While some fellow freelancers might find these rates very high, I find them average rates for someone delivering quality services like I do. I rarely charge less than $50, because I value my work and also out of respect for other freelancers.
Does that work?
I find my rates to be average compared to US or UK rates and astronomical compared to what other freelancers in my country are charging. That’s why I always try to teach younger freelancers to put the right price on their work and don’t settle for less. It took me some time to realize that too.
How do I manage to stay in business? By providing high quality work, by speaking good English and by having great people skills. Do you want to know what happened when I increased my rates? More clients started knocking at my door, I now have more time to spend with my family. These are the reasons I started freelancing in the first place.
Do small prices work?
Like I said, I don’t think this is a viable pricing strategy, for 3 main reasons:
- You’re up against a lot more competition than if you were to charge an average or higher rate
- You will attract the wrong kind of clients
- On the long run, you will not make profit, or at least not enough to justify the effort of being self-employed
What should I do then?
Ok, I understand that the cost of living allows you to, but why would you set your rates 10 times lower, when you can set them let’s say 2 times lower and still keep your clients happy? You should also research what others are charging and update your rates accordingly. Find your buoyancy point.
So my advice to freelancers: if you really have to set your rates lower, don’t undercharge too much. There are other ways to keep clients coming back. You started freelancing in order to make more money and have more time for yourself.
Charging slightly less than average will help you achieve that. Charging $10 / hour will only make you feel like you just got a new full time job, but you’re working from home now.
