A while back I did a discussion post asking people to share their rates for what they charged for specific services and products. While that turned out to be a pretty helpful discussion for those new to the freelancing world, I wanted to start a similar discussion for those who are more advanced in the freelancer world.
What I would like to talk about today is how you set your prices.
When it comes to tangible products its pretty easy to figure out a price. You just take the cost of the product and increase it based on supply and demand. An old rule of thumb is a 75% increase based on what you pay. Obviously this isn’t always the case as supply and demand can play a major role in pricing.
With digital products and design services though it isn’t that easy. There are a lot more factors to consider and usually a lot less costs involved. Some people set their hourly rate based on skill level, while others come up with their hourly rate based on how much money they need to survive.
I know there are a number of tools out there to help you get that magic number, but I am more interested in hearing how established designers, developers, and freelancers have come up with their rates for hourly and per project charges.
8 Comments
Most of my pricing is done on a per project basis. I have a cap that I generally don’t go over to keep me within the realm of freelance pricing but I’ve found that due to varying financial circumstances as well as each individual business needs it’s hard to properly quantify in terms of hourly rates or hard set global pricing.
In short I set my pricing based on my customer’s needs, wants, and what won’t prove to be a financial burden on them. After all, isn’t that the beauty of freelance? Flexibility?
I charge by the hour. I provide a detailed estimate upfront that’s about 20% higher than I expect the project to be that way I usually come in under budget.
This isn’t a hard and fast rule though. For example I will often go over the hours I set aside for a project if I feel like it will make a great portfolio piece or if I’m having an off week and I think my work stinks. I don’t charge the client for that time, because it’s my choice to put something extra into it.
I also like charging by the hour because if the scope grows i can let the client know as we go. If the client is the reason I spend more hours on a project then I do bill for those hours. It’s not something I want to do (charging over the estimate) but I truly feel that the folks I’ve worked with have a lot more respect for my time and abilities when they know I’m keeping the budget in mind.
The key to billing by the hour is clear communication, letting the client know what your doing and why is essential.
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I’ve always worked on a fixed fee basis, per project. I believe it gives the client confidence that the cost isn’t going to run away from them.
I initially worked this fee out by having a “behind-the-scenes” hourly rate and I would guesstimate how long a job would take and give this total to the client. Obviously this could come back and bite me if a project takes longer than planned or a client is particularly awkward but it would push me to keep to deadlines and at least the client is always happy … (most of the time!)
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Pricing is so subjective that it can’t be captured with a simple set of rules. Every region, industry, and client base tolerates prices differently. It can be very tricky to come to terms with an appropriate price but, as always, the price should be set to “whatever the market will bear.”
With that being said, freelancers new to the game should, in my experience, start low and gradually increase their numbers as they encounter more projects. They should be testing the ceiling at all times. And when I say start low, I mean start lower than an agency would charge and perhaps more than you think you can get. But definitely keep testing the ceiling.
Ultimately, every client and project is different. Putting out feelers during initial discussions will help you best assign a value to a particular project.
I usually work with fixed prices per page. The price depents on the complexity of the project. So if I need to make a small brochure of 4 pages I mainly ask 75 euro per page. And on top of those cost some administration costs.