Freelancers - Why You Should Never Underprice Yourself

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Pricing is always a confusing topic for beginners in freelancing, no matter what field they've chosen. There are many ways to look at the problem, and how you approach its solution is going to play a major role in determining your future success as a freelancer.

A common mistake beginners tend to make is to sell themselves short, hoping to attract buyers more quickly. And while you definitely will get more offers that way, it will also set a trend for your work which will be very difficult to get out of.

Because, at some point, you’re likely looking to boost your prices to what you believe are acceptable rates, right? But then, you’ll have to immediately drop most, if not all, of the clients you acquired at your original lower rate. And the work you've completed for them will hardly be worth anything in terms of a portfolio for higher-paying jobs.

So, the answer is simple but somewhat painful – you’ll have to grind through those first few months and hold your ground at whatever rate is acceptable for you. Don’t quit your day job just yet, and treat this as the secondary source of income it’s realistically going to be for a good while. Finding work will be very slow at this stage, but you have to be persistent.

Because, as long as you’re realistic about your prices and you've drawn the line appropriately, sooner or later clients will start contacting you. And once you've completed those first few jobs, opportunities will just keep pouring in. Your resume will grow, so will your reputation, and your clients will possibly also put you in touch with their partners and clients of their own, which will very quickly expand your network of connections in your field. From then on, you just have to maintain the same level of quality that built you this reputation in the first place.

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Awesome tips, pricing is my problem for now.

 

When I first started freelancing so very long ago (over 15 years, now!), I would always try to undercut everyone else.

I offered "packages" and "flat rate" pricing for my services that were about what a large company could offer. I would often get clients that would talk to me for hours about their issues, trying to describe what needed to be fixed, and, being the nice guy that i was, I wouldn't charge them for it. Then, when it came time to do the actual work, it only took me 15 minutes or so. At one point I was putting in 12-14 hour days and making less than minimum wage. I was lucky that I could handle some of my freelancing jobs while I was working my normal day job.

Fortunately, the vast majority of the clients that wanted my services only needed one or two odd jobs done. I was able to slowly weed them out, then quietly raise my rates before accepting new clients again.

It was a great learning experience, don't get me wrong, but if you're a sole proprietor, don't try and undercut "the big guys" just so you can get an extra $20 in your pocket. price yourself what you think you're worth. Make posts, help people out, and eventually people will hire you.

My current freelance rates are 6 times what I started out at way-back-when. (after I quit my job to pursue freelancing full time, at least!) If I had started out at this rate, or even half of this rate back then, I would have saved myself a lot of headaches.

 

Good post! Many people earn a full-time income freelancing, and if you start off trying to undercut your competitors you may never get to that level! When you price your services at what you know you are worth and people start seeing you deliver, you will get good reviews and many more clients sent your way.

Especially if you try to market to a certain niche, you can charge much more than normal and still get clients. Instead of trying to cover all bases, narrow your focus into one or two lucrative markets and charge others what you think you are worth.

 

Great advice Ethan, I cannot stress this enough, If your client don't have a budget to hire you, you should NOT lower your prices just to get the client.

 

Very good post!
This is true in every niche and business actually.
It's true on a psychological level.
In my solo ads business this happens to me sometimes.
People trying to bash the service and starting to say things like " sure there are people that sell for a lower price".
The other day somebody wanted to buy traffic from me and he wanted cheaper prices. Of course I didn't even want to sell for a cheaper price. Not only that I didn't want this guy as a customer cause he just didnt give me a good vibe. Its a great feeling to choose your own customers.
And let me tell you, a day after that I got 3 other customers that paid more! And they know how to appreciate the service I provided.
Sometimes its better not to sell and get better customer, instead of selling for low prices and dealing with people that are looking only the cheap stuff.
The problem is that when you go into low prices game you cant win really for the long term. You just brand yourself as a "cheap service provider". And you attract the customers that don't really appreciate quality. They don't even know how to spot quality. This strategy is bad for small and medium businesses. This maybe works for giant companies because they sell a lot, and they are more about the quantity.
Also the price is always relative to the benefits of your service.
You just have to:
1. Provide high quality service and add at twist of your own to it.
2. And you have to be able to explain the difference between you and cheaper services. Let me tell you this one is a competition killer in the long run.

 

There is a better way.... make them pay the most they'd pay. Nothing else beats this method.