Why freelancers shouldn’t undercharge

Posted on: July 9th, 2010

It’s fairly common for people new to freelancing to undercharge. There are three reasons why I’d advise against doing this:

1. If you’ve quit your permanent job to go freelance, it’s pretty likely you’re good at what you do. You have skills and experience that others need, so don’t undersell yourself.

2. Being seen to be ‘cheap as chips’ sends out the message that you aren’t all that good.

3. Undercutting others isn’t fair on fellow freelancers who work in your sector.

There are lots of websites like elance.com where freelancers are prepared to write 1,000 word articles for a few dollars, or design a logo just as cheaply. That’s fine if you are trying to build up your portfolio and your experience but not if you’re trying to make a living.

You always get what you pay for

I’m of the opinion that you always get what you pay for. If you’re brilliant at what you do, then potential clients will want to hire you. And they know that, if they want a quality job, they will need to pay accordingly for it.

So, now you’re probably asking yourself: “What should I charge?”

Since I don’t know which sector you’re in or what the going rate is for your particular line of business, I can’t give you an answer to that. Rates also vary widely from country to country. One way forward is to ask other freelancers who do a similar kind of work on a freelance forum or a forum specific to your sector.

And don’t forget that, when you set your rates, the money you earn over the course of a year needs to cover your living expenses and bills for the times when you aren’t working (sickness, holidays, lean times.)

Next week, I’ll continue this topic by discussing “How much do you need to earn?”

How did you go about setting the rate you charge?

14 Responses to “Why freelancers shouldn’t undercharge”

  1. [...] This post was mentioned on Twitter by Christine Millan, Christine Millan. Christine Millan said: Stick to your guns, #Freelancers! via@The_Money_Book http://is.gd/dlErc [...]

  2. Joan Damico
    July 9th, 2010

    Hi Carole I like the new website. You’re article is right on the money (pun intended… and a poor one at that!) Many writers set their rates based on experience and industry standard rates. You’re absolutely right, that undercharging not only undermines your fellow copywriters, but also your own business as it isn’t likely to be sustainable. However, you’re also correct that often new freelancers will work on “spec” or for a low rate to build up their portfolios, which is sometimes the only way to gain freelance experience, unless you have a few clients or a portfolio from your previous steady job.

  3. Carole
    July 12th, 2010

    Glad you like my new blog, Joan. And I’m also glad you agree with my points. :)
    All the best

  4. Jane Howitt
    July 12th, 2010

    Excellent post and fab blog! Just signed up for your updates via email.

    I charge per project, rather than per hour. But — don’t tell anyone — I have to admit I’m pants at estimating how long something will take and just great at undercharging. Sigh.

    You know how illustrators have agents who work out all that kind of stuff and let them get on with the work? Well, I’d like a copywriting agent, please. Going to put it on my Christmas Wish List :-)

  5. Carole
    July 13th, 2010

    Hi Jane

    I also charge per project (unless a client specifically wants me to charge by the hour). I always keep timesheets for every project I do so that I can see how accurate I was at estimating. This helps for the next time. When I quote a job, I always specify how many meetings are involved in that cost and how many rounds of amends. I learnt my lesson by one client wanting loads of progress meetings and I hadn’t spelled out in my quote just how many meetings I’d allowed for.

    On the subject of coywriting agents – I think they’re as rare as hen’s teeth.

  6. Cookies & Java
    July 13th, 2010

    While I agree that freelancers shouldn’t undersell themselves I strongly disagree with the comment about undercutting competition and always getting what you pay for. As business owners we all benefit from an open market and that’s going to be subject to the mechanics of supply and demand.

    While there maybe other freelancers able to undercut on price that doesn’t mean they can deliver the same overall product. And of course that doesn’t mean freelancers with lower rates must be offering less either.

    This is why it’s important that your regular marketing audit includes analysis of what your target clients value and what your competition is offering. That should lead on to your marketing communications activities with the right messages that portray that value to the right customers.

    None of us are entitled to any level of lifestyle or working hours. It’s perfectly fair for someone more hungry for the work to undercut us if they can.

  7. Carole
    July 13th, 2010

    Hi Cookies & Java

    I used to belong to Communicators in Business which ran a freelance forum and this subject was always one that was debated a great deal. I often lose projects on price as I choose to set my rates higher. But that’s mainly because I’ve almost 20 years of freelance experience, so I feel I can command those kind of rates.

    I’m lucky enough to have a client base that gives me repeat business which keeps me busy. However, in today’s market of clients tending to buy on price rather than on experience, those who offer lower rates are the winners!

  8. Mel Silver
    November 4th, 2013

    Excellent article Carole and I like your new website!

  9. Carole
    November 5th, 2013

    Thanks, Mel. How are you??

  10. I am curious to find out what blog system you have been working with?
    I’m having some minor security problems with my latest blog and I’d like too find something more risk-free.
    Do you have any solutions?

  11. linkedin.com
    March 21st, 2015

    App has pests. Please fix.

  12. chiamano
    May 19th, 2015

    It’s hard to find well-informed people in this particular topic, however,
    you sound like you know what you’re talking about! Thanks

  13. Colette
    June 9th, 2015

    Amazing things here. I’m very happy to peer your article.
    Thank you so much and I’m looking forward to contact you.
    Will you kindly drop me a e-mail?

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