Rates and How Not to Sell Yourself Short [A Writer’s Perspective]
A Guest Post by Robert James.
Imagine you are a new freelancer and you’re testing the waters of the online freelancing world.
You take with you nothing but what the brick and mortar world has given. You go on a search for your first ever client, applying to virtually every job you think your skills are good for. It takes a lot of waiting and you wonder if any of your applications reached their destination.
It all seemed hopeless until you are greeted by an email the next morning with one client, out of the hundreds who never replied, asking you for an interview. You excitedly agree, set the schedule, give him your Skype or whatever form of communication you prefer, and wait for their call.
Let’s say you and the client discussed the project thoroughly to the tiniest details. You know you can ace this project with an unbelievable turnaround time and the client is impressed by your wits, skills, and experience. They say “Yes” and you say “Thank You” but then this question comes up: “How much?“
This is your first time and you don’t know how much this project would cost. It’s in dollars and the only dollar transactions you’ve done is when you order a book or a toy from Amazon. It’s been a full minute and the client’s wondering if you’ve heard him or if you’re still there. You contemplate whether to tell them you don’t know or simply take a wild guess.
Both have risks but so much time has passed and its late where your client is. If you throw a random number, it might deter the client or you might end up shortchanged and it’s the same if you admit you know nothing of rates. What do you do?
Setting Your Rate: Not as Easy as It Sounds
If the story above sounds familiar, don’t be ashamed: it happens to everyone, even the veterans in the field. If you find rate setting an easy task, then perhaps you’re doing it wrong but you’re not one to blame. After all, rate setting seems simple enough: You put a price on your time or on the project, how much per hour or per scope of work. Done, right? Not really. There are many reasons setting rates can become difficult but I was able to narrow it down to just five.
Side note: I’ll also be inserting personal experiences I don’t normally share especially when it comes to money matters. I’m only going to since I want others to see it’s not impossible for a Filipino freelancer, specially writers, to complete with international freelancers bidding international rates.
1. Different rates attract different clients
It’s no secret: The big budgets belong to big time clients while the small ones are those usually from startups or young entrepreneurs. Your rate would naturally attract either one of the two and rarely both. What defines low-bids and professional rates are up for debate, especially when it comes to currency exchange, but most usually compare it to U.S. rates.
Big time clients
- Have more experience in hiring pros
- Veteran in the business world
- Knows what they want
- Have a good idea how much anything costs
- Not afraid to pay premium but often doubt low-bidders
- Contracts are short-term; can end in weeks or days
- New in the scene therefore little to no experience in hiring
- Budget is limited and unstable
- May not always have plans or outlines
- Often wonders how much is a fair price
- Would shun professionals and try low-bidders with enough experience
- Likes to keep contractors for months or even years
I started full-time freelancing last Feb 6 2015 and I went with $8/hr. for two months. I attracted the kind of clients who really didn’t care how long you do a job so long as the outcome is stellar. These clients also made me do things outside the job description of being a writer i.e. image searching, editing, and news curating.
They paid me $200 per week regardless of activity but when the job became too hard to bear, sometimes exceeding the weekly limit, I naturally had to demand more money. The original contract was breached and became too difficult to handle for $8/hr.
It wasn’t until I asked for $2 more that I realized how cheap this client was and how I was selling myself short. I discussed it with him and his “assistant” about why I was charging them extra but they didn’t listen and paused the contract. I only worked until June (7 months) and decided to terminate the contract this year when I decided I was no longer worth $8/hr. Yes, I fired them.
(Click to enlarge, this goes for most of the images in this blog)
After reading a bit about international freelance rates, I decided to promote myself to a higher price of $13.33/hr. on my third month. I got clients who got more technical but not too serious. These clients at least knew the kind of outcome they want and will definitely tell you if something’s wrong but will still be friendly. I then decided to focus on my niche and played with $16.67 for a few months.
I attracted clients who own big businesses and wanted quality content for their sites. The jobs got more technical and articles required more research time. Shortly after, I raised it up to $18.89 this January and it’s $25.56 today.
The kind of clients I now get offers from, and who hire me, really know what they want. They would sometimes micromanage until they see you working the way they hired you for. They have professional assistants, signed agreements, and some even required manual invoicing (private clients).
Working for the big guys is certainly difficult but it’s worth the time as it builds credibility as well as teach you a thing or two about their business and methods. They also respect you as a professional and won’t hesitate to pay extra if you tell them why they have to pay extra. Bonuses are rare, though, but with the rate you’re getting paid, every hour might as well be a bonus.
Side note: The odd price tags are due to the 10% fees on UW and 5% fees on Paypal. I want the client to pay for those.
2. Rates and job difficulty are like a couple
When a client thinks a job is difficult he usually thinks it’s going to be worth more than $5/hour. Likewise, if you as a freelancer were to find a job to have some form of difficulty then you must also bid accordingly. After all, data entry isn’t exactly as difficult as writing an academically researched article of 5000 words with no grammatical errors and with proper references from credible, government-funded research institutes.
3. Rates vary per type of work
There is no such thing as a universally accepted rate. As Einstein insisted, everything is relative and $20 may seem a lot for a few jobs while others see that as the entry, inexperienced rate. Be mindful of how much you bid in different categories as what may seem cheap or expensive to you may not actually be realistic to the job you’re applying for.
A good example would be if you’re paid $70 for original, well-researched articles but only $40 or even $20 for rewrites and articles requiring minimal to zero research. There’s a difference between offering discounts in platforms and private jobs but I’ll get to those in another article.
4. Competitive rates will drive you lower or higher
The notion of Filipinos being equivalent to cheap labor or work is due to what we call “international rates.” Globalization means we get to compare each other’s price tags and determine who is a better bargain. That usually sucks for first world freelancers but is seen as the holy grail by their third world counterparts i.e. Filipinos, Indians, people from the Mid-East, Vietnam, Thai, etc.
Being competitive is not always about being the lowest bidder, though. Definitely not. If that were the case, then public platforms such as Upwork will no longer have any Freelancers from the US or UK and we wouldn’t see people getting hired for $40 and up.
A competitive rate means you stand out and you can prove why you deserve to be hired for that rate compared to other freelancers.
Some clients don’t know how much anything costs and often times the price displayed on platforms is just a place holder. When I spot a good job post (I’ll teach you that later) I apply with my max rate since I know the freelancers I’m going up against are also charging more or less the same.
I don’t always get the job but it’s surprising how sometimes the client goes for the higher bidder. I thought charging 7 cents per word is expensive and yet the client hired someone who charged 20 cents per word. I know because the client hired a friend of mine from the U.S. and she’s become my “rival” in many jobs.
Another example of me overcharging a client but this time I got hired:
The client’s budget was barely $50 and the post had 20 or so applicants by the time I got there. I applied because I knew I my way around research and scientific journals. I knew this job is like a walk in the park for me. I was so confident, I even implied it on my cover letter. The result? He paid me almost twice as much for a 5-hour job. Sweet.
The moral of the story? Always bid the amount you know you deserve and back it up with facts and a bit of sales talk. Who knows? You might just bag yourself a great client!
Protip: If the budget is high and the job description is vague, just insert how much you’ll do for a certain milestone. I found out clients prefer applicants who know how much a project’s worth so they can gauge if they can afford a freelancer without wasting time interviewing them. See example below:
5. Rates can be used as a sign of quality
Depending on where you live, $10 per hour can seem expensive or cheaper than a decent meal at Mickey D’s. To many Filipinos, getting hired at rates equal to or more than $10 is a sign of expertise, long tenure, and success outside the norms of an ordinary 9-5 day job. It can also be the same for our friends in India or the Middle East but not so much for our friends from the West.
To Westerners, $7-$8 per hour is minimum wage and belongs to uneducated and unskilled workers who couldn’t find a normal paying job and had to settle for whatever that’s left on the table.
I’ve done my share of snooping around freelance pages and forums and I realized one thing: Our Western counterparts often equate South East and Mid East Asians, specially Filipinos and Indians, with cheap rates. Luckily, the same Westerners mostly see Filipinos as a source of cheap labor and not cheap work. The difference between the two is the quality of the finished product:
Cheap work means lackluster quality which explains the price. This type of work is akin to what we call “rushed jobs” or work that you know an expert wouldn’t have anything to do with.
Cheap labor means decent/satisfactory work for a low price. Filipinos are known for providing good to excellent work despite a low-budget project. I can definitely attest to this since sometimes clients pick me because I’m from the Philippines.
We owe our measure of skill to our mostly Westernized country (especially our fluency in the English language) and I believe that is one reason why most clients prefer Filipinos over any other Asian workers when it comes to freelancing jobs. This is one of the reasons why job posts such as “Filipinos only” exist. We are known for good quality for a desirable price tag.
Despite all the hype, however, the stereotype is still there: If you charge less than the perceived “average price” per hour, your quality of work is automatically categorized either into “okay” or “not worth my time.” (Other sources: 1, 2, 3, 4, 5, 6)
Side note: I’m sure I ruffled a few feathers with these bold statements so kindly take them with a pinch of salt. This is only based on what I’ve seen and discussed with our Western counterparts and they seem to agree jobs belonging to $15 per hour and below are the kind of jobs requiring little skill or mastery. Heck, there have been recent protests with regards to pushing the minimum wage to at least $15 per hour.
Although in their defense, the cost of living in their countries are a lot higher than our own so this is understandable when discussed in context.
Advantages and Disadvantages
We have no absolute basis as to what high and low rates are. I’ve done the research and everything points to the general conclusion of “Whatever rate justifies the amount of effort you’ll use.”
I don’t know the going rate for other job categories but for writers, I always base mine on international references such as the EFA, Freelance Writing, and Writer’s Market but even these rates aren’t absolute specially when dealing with freelance platforms.
Speaking of platforms, here’s what Upwork recommends clients when it comes to pricing on a few jobs. Regardless of whether how much something costs, the advantages and disadvantages are still the same.
Advantages of Low Rates
- Potentially more jobs available
- Good hire percentage
- Usually “easy” jobs or jobs requiring no technical expertise
- Noob friendly, even high school graduates can do
- Lots of long term potential
- Jobs usually offer “bonuses” and other perks
Disadvantages of Low Rates
- Work a lot to earn a lot to compensate for low rate
- Low potential for growth due to job choices and platforms usually drive rates lower
- Jobs may not use preferred skill set i.e. you’re a business expert and you’re in Data Entry
- Often monotonous/repetitive work
Advantages of High Rates
- More money for less work time
- You’re seen as a premium freelancer
- Clients see you as an equal or a guide and not as an “employee”
- Technical jobs will pay more specially if you focus on one type or niche
- High potential for growth
- You will learn how to scrutinize a job post and whether it can pay you or not
- Each project has its own twists and turns, not repetitive
- Jobs could teach you plenty of new things
Disadvantages of High Rates
- High budget jobs are either limited or scarce
- Hire percentage is usually just “average” or “below average”
- Clients often try to haggle specially if previous lower rates are visible
- You might end up with no work for some time
3 Things to Consider in Determining Your Rate
Let’s say you got it all figured out but are you sure you’re not selling yourself short? Again, it’s always up to you whether your rate is good enough or has room for increase but here are three things to consider if you’re a bit confused.
1. Educational Attainment
I know a Filipino doctor who freelances on the side, writing medical articles at around $28/hr. For our country, that’s a great deal but for his level of education, not so much. Let me remind you of competitive rates and globalization. We’re not competing against fellow Filipinos but with foreigners who aren’t afraid to charge double your rate simply because its standard in their country.
You don’t have to limit yourself at $20/hr. if you know your level of education is the same with those charging $40/hr. It would be crazy to think if a PhD were to charge $10/hr. for a solid, well-researched book.
Let’s say you never finished schooling. Does that mean you’re limited to $5/hr. jobs? Not really. If you think you are well-versed or even better at anything these degree holders are capable of, and you can prove it, then bid as high as you want.
2. Skills and Experience
There was a guy in one Facebook page who considered newbie freelancers who charge upwards of $15 to be “arrogant.” Everyone has to start somewhere, right? But just because you’re a complete newbie doesn’t mean you have to start by scraping the bottom of the barrel. If that’s how you got along then good for you but that’s not what everyone should do.
Going back to my personal experience above, I started at $8/hr., a few dollars above the “standard” $5-$6/hr. then moved it on an almost quarterly basis all the way to $25.56 and yes, I still get almost one invite a day.
How was I able to get so many invites and even get hired for a “steep” rate? Well, my skills and experience matches the type of job the post demands. You naturally apply to posts you know you’re damn good at so you can set the price tag at max. Of course, if you can talk the talk then you have to walk the walk. In layman’s terms: prove your price tag.
Below is a private client’s message when I applied for a position for his writing company:
This was when I was still charging $50 per 1000 words, an “arrogant” price tag.
This is from my first ever private client. He knew I didn’t exactly match his requirement for an experienced writer but I was able to prove it from having published material from previous clients.
Side note: I still write for him and looks like I’ll be his writer for at least 6 more months. We have since discussed a deal on fixed payments every two weeks, regardless of how much time I use up. I provide him an invoice and he sends payment via Paypal.
Protip: You can earn plenty of money doing fixed price contracts whether on a platform or off-platform. Just make sure you can finish the job quick while ensuring near-perfect quality and you’ll end up earning twice as much as your hourly rate for less time.
3. Preferred Work-Life Balance
For me, I see freelancing as the perfect way to get the most out of life without sacrificing income and I see the ultimate goal of freelancing as being able to work only a few hours a week but get more than enough money come payday. When you want to achieve this, you have to think about how many hours you prefer to work per week and compare that with your proposed hourly rate.
The math is simple: Say I wanted to earn $600 a week but I don’t like to work longer than 40 hours, the amount I should charge is at least $15/hr. What if you’re like me who hates working longer than 30 hours a week? I would then charge a minimum of $20/hr. That means I only get to work 4-5 hours a day and have the rest all to myself. I can sleep longer, read more books, play more games, exercise longer, and basically have more “me” and family time.
Now I understand not every job allows a “high” rate but that doesn’t mean you’re supposed to resign yourself to working 70-80 hours a week (or more if you count manual time) for the rest of your life. You simply have to ask how you can charge higher and what should be the skills and tools you need to get to a point where you no longer have to work longer than 40 hours a week.
Granted some of us have grown accustomed to freelancing for 60+ hours a week, sitting in front of a computer all day and not “living” will definitely take a toll on your health if you don’t find a way to break the cycle.
Personal experience: I once worked 75 hours a week for three weeks and while I did get plenty of money, I didn’t like how my body felt weak and lazy no matter how hard I exercised. My metabolism got slower and I kept getting headaches. Not to mention how my shoulders and fingers started to hurt and twitch. I had to see a massage therapist to get my muscles back to normal. I eventually had to fire a few clients too, especially the low-paying ones.
Side note: You can also consider overhead cost specially if your job requires you to invest on equipment or double your energy consumption.
Protip: If you’re still clueless, aim for the best rate for the most time you have for work
Rate Setting: Platforms vs Private clients
Setting rates on platforms and rates on private jobs are vastly different. Here’s why:
- Your rate will be compared to others specially during applications
- Clients will say things like “the going rate is…” and insist on lower price tags
- Haggling will occur frequently specially if they see you working for lower rates
- Sticking to one rate will make it hard increases in the future
- No visible competition, set your preferred rates
- Clients don’t usually haggle, they often set the rates for you
- You can raise your rate whenever you want (provided they’re cool with it)
Obviously, getting private work is better when it comes to rate setting but that also means you have to apply manually or put some effort in making sure clients find your online portfolio. I’ve been applying to a lot of private work and I only got 2 out of possibly 30 applications so searching for private clients is one of those challenges that barely go rewarded but when it does it’s beautiful.
Side note: Raising existing rates is different from setting new rates since the client has already agreed to hire you for the price you offered. Should you increase your rate for existing clients? As a writer, I would personally say no. I apply grandfathering (a.k.a. exception to the new rules) to my old clients unless I have a better reason for raising rates which in most cases I don’t.
It’s up to you and the client’s need of your work. If they value you as a contractor, they will definitely say yes but if they don’t and see you as replaceable, you might end up losing a job. It’s also bad news for platform users since feedback is publicized and one immature client can put a dent on your clean record.
The Danger of Low Rates
There’s nothing wrong with setting low rates specially if you know it’s more than enough for you. What I am worried about is what I call “Rate Dilution” on a global scale. Again, we’re working with international markets and if majority sets the bar too low then we’ll all have to crouch to get through and no one wants that.
You should believe $3.33/hr. for what you can do is too cheap and if competition gets hired for $10/hr. then why can’t you? What do they have that you don’t? If you know you can do it just as good or better then let it reflect on your rate, even if you’ve been working with that rate for years.
If you know you can set a higher rate, be it one or ten dollars, then go for it. You are helping the global community rid itself of the minimum wage. This is one of the reasons why I like being a member of Freelancing PH. These people understand how important it is to set decent rates. Honestly, if you’ve been freelancing for more than three years and your rates have remained mostly static then you’re not making any efforts to move forward specially if you’re not satisfied with your pay.
Side note: This one of the main reasons why I go for private clients instead. Not much competition against cheap bids and there’s a chance to raise your rates without knowing what you charged before. If you can live with $5/hr., then that’s good but I still think if we’re just as good as first world freelancers then our rates should also reflect that as well.
How about high rates?
Is there no danger to setting higher price tags? There could be but it only happens when clients decide to only hire at a specifically high rate but who can say how high is high? I’ve seen freelancers in my category get hired for more than twice my rate. If they can charge high and get jobs, then there’s an even bigger chance I’ll be hired as my rate is considerably lower than my peers.
Searching for clients is hard and setting your rate makes it a lot harder. I don’t have much to say after all that and it has been quite a lengthy post. What I can offer is one last piece of advice:
Surround yourself with amazing and successful people so you too can become successful like them. Likewise, if you surround yourself with those who think they’re no better than the minimum rate then you’ll end up just like them, doing the same things while being paralyzed by fear of not getting hired.
About The Author:
Food Scientist. Fitness and Health Aficionado. Investor. Writer.
Robert James likes to tell people how to grow their money and how to naturally lose body fat. owns Fit And Write, a website catered to his passion to write about health and fitness. His main weapon against weakness is the kettlebell.