You could be a really good photographer or musician. Maybe you offer math tutoring services. If you’re working with an agency, they set your prices and take a cut from your gigs, but if you do it yourself as a freelancer or a consultant, you can earn a lot more.
Well, that’s what they say anyway.
So you decided to set off on your own and then hit the brakes because you won’t know how much to charge. The anxiety of not knowing the answer to such a simple question and then the stress that might come from not landing the gig because someone else offered a lower price is a tough thing to deal with.
The question has been asked many times on Google so much and they all have the same answers.
As an example, I looked at the question “how much to charge as a photographer?” and these are the answers I got:
Quit Guessing How Much to Charge
The thing is, these numbers are kind of like weather prediction. They’re all good ballpark estimates, and they might actually work. They may also screw up your plans.
The reason they work is that people who report how much they charge have already done the work before you in figuring out how much a person will pay for the service you are offering. It just makes sense. But there’s a big mistake people make by pricing solely based on a recommendation from a website: you can’t back it up.
When you’re working at a retail store and someone asks you how much something costs, you look it up, and let them know. They don’t question it and they don’t try to negotiate it with you because someone else set the price. That all changes when the customer knows that you’re pricing the services yourself.
A client may ask you “why are you charging me $200 for one hour?” and you need to have an answer besides “well, that’s how much my time is worth.”
Your time is worth $200 per hour? You risk the chance of pissing off your potential client with this whole superiority complex of yours. Artists love complaining about this stuff and miss out on big opportunities just because they don’t know how to negotiate a deal.
If you can’t confidently explain to a client why you’re charging your fees, then you’re guessing.
Figuring Out Your Price
Sure, you could go out and list all of your equipment with their costs and figure out how much your hosting costs or how much you spent on your education… but that’s far too crazy for me. Some people like to list out all of the things they had to do to get good at their craft and try to justify their prices based on that but in reality, the whole thing comes down to demand. Quit factoring in your $10 Spotify membership to your client’s costs.
If you’re good at what you do, more people will want to work with you. When more people want to work with you, you may not have enough time to serve everybody (which secretly means that your time is worth more).
This is also the reason why most successful photographers and artists start off charging super low prices.
Successful people survive this stage, while the others won’t. What makes it tough is having to work for free. They charge a low amount and then blow their client’s mind with the quality of work. They post their personal projects online and make a portfolio that showcases their best work and more people begin to notice.
Soon, these guys won’t be charging low-ball pricing.
Okay, but you still need a starting price. What should it be?
This is where your research and understanding of “the market” comes in. Now, people get very technical when it comes to this, but I won’t so stick with me here.
The market isn’t a supermarket.
It’s the trades, sales, and negotiations that are going on right now in what ever industry you’re in.
If you’re a photographer, there are likely clients in your area looking for services right now. How many potential customers are there? No, really. Some people have to figure out how many people are looking for these services to have a really good estimate.
You can figure this out by searching for photography services yourself and reaching out to photographers in your area. Check out conferences or Facebook groups. There are always people talking about “the market” without knowing. Usually they say things like “no jobs are coming in, what’s going on?” or “wedding season is coming up!”
More people begin to look for services at different times of the year, or for different purposes year-round.
If you have a tough time figuring out the number of potential customers, you’re not alone, my friend! This is what marketers struggle with the most and charge the big bucks in order to tell you once they have a number down. Your best bet is to figure out how many photographers there are, which is much easier, and then check out a few of their fees.
Remember, these go higher when there’s a lot of demand for the type of service, and get super low when there are too many photographers in the area.
When looking for a DJ in a small town of Ecuador, I ended up interviewing exactly two DJs and still ended up with a crappy one. But I was out of options and they knew it.
When I was starting out making websites, I went over to Google, looked up “web design in los angeles” and asked a web designer for how much it costs to build a website for a small manufacturing plant. He said $1,600 USD. I said okay, can I see some of your work? And he sent me a link to his portfolio with pretty average-looking websites.
I thanked him for his time and offered my potential client a website for $1,200.
He said it was too much, and that if we could work together to lower down the pricing. That’s when I had no idea what to say. I ended up taking the job for $800 and it took too long, had too many changes, and the client went crazy after a while trying to make his own changes which then I had to come in and fix.
Now, I explain my fee structure which involves content/writer fees, image licensing, development rates, hosting and registrations, as well as other things like website audits and transfers. These are calculated by how long it takes me to do them, and it comes with a TON of trial and error. When I first started, I chose $15 per hour as my own rate (that I never really disclosed to the client directly).
Now, if a customer wants a lower price, I suggest that they get some of the services herself like hosting or domain registration and I give the specs that the site will require. They usually change their mind and want me to do it instead. If you have every fee calculated, it’s easy to lower the client’s cost without cheating you of your work.
If you’re a web developer, you can also offer to build a website without any written content (just the frame), which they can add themselves and then just charge them a flat hourly rate for consulting if they need help during their process.
- Check out how “in-demand” your services are
- Ask around for current pricing
- Make a list of your process and how much it costs you
- Learn your pricing and be able to explain it
Adjusting Your Fees
Just like everything else, you absolutely need to be changing your prices. Most people have this idea that your prices should be fixed, but the only reason behind is to avoid the awkwardness of explaining that your services cost more now. If that’s the only reason, it isn’t enough to justify keeping super low prices.
Managing a hotel let me learn the differences between high and low seasons and how to raise prices fairly. There’s always a point where clients would rather not use your services because someone is offering the same thing at a lower price.
During the summer months, people get married. I don’t know why.
This is when photographers get all booked up and their prices go really high, and it’s all a very fair process. They move with the market.
Understanding your industry and knowing who is charging what for a certain type of service is just part of running a business. My uncle used to do his market research while coming up with his pricing structure for chicken egg wholesaling. Hostels look up prices of other hostels in the area.
Doing your research instead of just looking up how much to charge is just a normal part of doing business, so take care of it.