4 Reasons Your Low Freelance Writing Rates are a Terrible Idea

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When you begin your freelance writing career, it can be difficult to set yourself apart and build your book of clients.

Your desire to get started and earn a steady stream of income can be overwhelming, which leads many freelancers to fall into a costly trap: Competing for business based on price.

It’s true that some of the most powerful businesses in the world make their bread and butter by competing on price. Think of Walmart, or Amazon, or McDonald’s. But these are major corporations that can turn pennies into billions of dollars based on sales volume.

As a single freelancer, there are only so many hours in the day you can work.

You don’t have the luxury of turning small profits on a huge volume of jobs. You want large profits on a low volume of projects.

You need to build a business that competes on quality instead of price.

But why is it so dangerous to focus on a low price? After all, offering quality work at a low rate can make you extremely popular with clients, the same way that quality cars sold at a low price will draw in customers.

Here are four pricing issues to watch out for as you build your freelance writing career.

1. You can’t always be “on”

The biggest reason why don’t want to compete on price is simple arithmetic.

If you work 40 hours at $20 an hour, you earn $800. If you work for $50 an hour, you only have to 16 hours to earn the same amount.

Sometimes freelancers don’t realize how consuming your work can become. At a typical office job, you leave your work at the office and have a clear delineation between work and home.

For freelancers, that line blurs. Can’t sleep at night? May as well work on that project. Need to run to the grocery store in the middle of the day? You’ll just catch up on work this evening.

The result is an “always on” mentality for freelancers where you’re never off the clock. But if you charge more, then you don’t have to work the traditional 40-hour (or 50-60 hour) workweek.

Instead, you can have the freedom of lifestyle that draws many people to freelancing in the first place.

2. You are worth more than you think

It’s not just a self-esteem booster: You are worth more than you think.

Consider a company that wants a copywriter to write a new ebook. It has two routes to take. It can either make a new permanent hire, or can hire a freelancer for the project.

A new hire comes with the costs of a salary, health insurance, a 401(k), Social Security, paid vacation, office space, a computer, training and even a Christmas gift at the company party.

Freelancers come with none of the extra baggage. So when you’re bidding on a job, think of those expenses to the company. After all, you have to pay for those things. You should be bidding an amount that covers all your expenses, plus an extra charge for the convenience of the company not having to bring on a full-time employee.

Don’t be shy about your prices. Remember, people are willing to pay for what they value.

3. You’ll never win the low-price game

The ugly truth about competing on price is that you will never, ever win. There will always be someone willing to do the job for cheaper than you.

A person pitching in New York can be underbid by someone in Kansas. Someone in Kansas can be underbid by someone overseas. And someone overseas can be underbid by a person willing to do the project for free because they want the experience.

That’s not to say you won’t ever get a job. You will. In fact, you’ll find plenty of work. But over time, you’ll find yourself in a spiral of continually having to lower the price you’re willing to take if you compete on this end of the spectrum. Instead, you want to set your prices based on the value you bring to the job.

4. Your cheap clients won’t be worth your time

We’ve all had difficult clients: Those people who don’t clearly articulate what they want, but know what you produced isn’t it.

There’s no evidence that clients who pay less are more trouble than those that pay higher rates. But it’s simple logic that those clients paying less are worth much less of your time when they do cause issues.

Any bid you make on a project should be done so with the knowledge that you will have to go back and tweak things. The catch is that if you compete on price, those revisions eat into your already thin margins.

It’s easy to see that getting materials just right for a client and ensuring they are happy is no longer worth your time. You want to build a client base where no matter how much you have to adjust, tweak or revise your work, it will still be wildly profitable for you to work with them.

Have you learned similar lessons trying to compete on price? How did you adjust your business model?

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Nick Calloway is the founder of WFHGuide, a website dedicated to all things work from home.... .

Work from Home Guide | @wfhguide1

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Comments

  1. Hey Nick! Good read here.

    Quick question for you. . . I like where you’re going with this train of thought.

    Can you expand on this 1 sentence with personal examples of your own?

    “If you work 40 hours at $20 an hour, you earn $800. If you work for $50 an hour, you only have to 16 hours to earn the same amount.”

    A regular complaint we see from Write Life readers is that there’s just so many of those $20/hour projects out there, but the competition for (and availability of) the $50/hour projects…well, they’re just plain hard to get!

    Can you share a story / case study of your own in which you scaled up your earnings by appealing to $50/hour caliber clientele — AND landed their projects?

    Show us your wins, man! 🙂

  2. I agree with the writer. I have been freelancing for almost a year now. When I started out, I took any job I could so that I could build up experience and a book of clients. However, I’m now in a position where I can pick and choose my projects IF I feel I need to look for work – most of my current work come from established and returning clients. I have weeded out the clients who want my attention 24/7 at rock-bottom prices.

    Although I’m certainly not getting rich from being a freelancer, the hidden benefits cannot be bought. I work the hours I want to, I have no traffic to deal with, I spread my costs across all my projects, and perhaps the best of all, I don’t have to report to a boss, which is something I had a problem with in corporate life.

    I encourage those new to freelancing to take the cheap jobs, because that is the only way you learn. I’ve not heard of any class you can attend to give you that experience. But don’t do it for too long otherwise you will burn yourself out by trying to meet too many deadlines at slave prices and you will give up freelancing and return to corporate, thinking that it just isn’t worth it.

    • I could’ve written your response. Corporate America never really worked for me. I am bidding at around $35/hr and even did a 650 word blog post for $35. After this project, I won’t be doing that again. They definitely want you to tweak stuff or just come back with several more items when it’s 95% done. I have a Journalism degree and my business is new but I need to stay firm and know my worth. I could feel the burn out coming for a minute.

  3. Alison figueroa says:

    I learned the hard way selling myself short. I started low and the client turned into my worst nightmare. They woukd ask for things to be done at the last minute and thry would sneak in extra work trying to add it to the same charge (basically work done for free).
    It stressed me and after many years, I was able to professionally free myself from this client. Once I did that and started charging what I’m worth, i got professional clients.

    • Oh wow! I had a client who paid very well for “editing and proof reading academic papers” – just up my street.

      However, the milestones became shorter and shorter and I had to do research on top of the original brief. It slowly dawned on me that I was actually writing the client’s thesis for his doctorate and that he was stealing material from other academics!

      I very quickly terminated the project as soon as I realised that. I lost money, but at least I kept my integrity. More than can be said of that client. This experience also taught me how to spot those “less than honest” clients, so not a total loss in the greater scheme of things.

      • Milenio,
        The perfect example of “going with your gut!” Glad you kept your integrity and I hope awesome projects head your way in the future!
        Thanks for reading,
        Lisa Rowan
        Editor

  4. Yes, every freelance writer is actually worth more than they think.
    We need to squash this feeling of inadequacy because it doesn’t really help our career.
    But I still feel that as much as we’re trying not to undercharge, we should justify our rates with value. Every piece you write should be seen as a legacy.

    • The only way you can prove your legacy, is by building up a book. The rare times I have to give reference articles, the client would read the first paragraph and hire me straight away.

      It helps if you can prove your writing by giving links so that the client can see your versatility.

      As you said, you can only build up that legacy through quality work that you can prove, and it’s the only way you can get the better paying projects. But you can’t get those projects straight out the blocks though, you have to go through the slog. It’s only through experience that you can spot the clients who will want to wring out your last drop of blood for a dollar.

  5. Jolyon Sykes says:

    Hello, freelancers. There seems to be plenty of work available at around the one cent per word mark. And some of them want the research work or fact-checking included. There must be a way of building a book of successful paid work – say around 15 to 20 cents per word – without starving to death first!

    • Jolyon, unless you have a body of work you can use to substantiate the quality of your work or some kind of qualification, you are going to battle to get the better paying jobs from the word go. I can’t speak for others, but that is the way I started out. I wrote about 50 articles ranging from 500 to 1200 words, and five eBooks at those slave prices, plus editing and proof reading work. I worked 12-14 hours a day for the first six months BUT I had a goal in mind.

      Now I get clients coming to me either through websites, or through referrals from current clients. The bulk of my work now comes from clients I’ve done work for in the past.

      Too many clients want outstanding work at those stupid prices, but unless every single freelancer takes the decision to refuse those prices, the clients will not stop asking for work to be done with those requirements. With the economy in many countries forcing people to find other income (with freelancing being a perceived easy way of doing so), it is not going to be possible to unite everybody in this quest.

      I absolutely agree that freelancers should start appreciating their own value, but I also think that the dedication it takes to get to the point of having the luxury to refuse low paying jobs, will weed out the fly-by-nighters.

      So unless you have a few essays or other published work, you’re going to have a problem finding the better paying jobs.

      I know that is not what you wanted to hear, but in my experience, that is the only way you’re going to get to that point.

      • Jolyon Sykes says:

        Thanks, Milenio. I’m using a borrowed 4-G hot-spot at the moment so I’ll keep this brief. I’ve been writing for about thirty years and do have a few publications available on line. The cover a range of genres such as journalism, a government report, some academic writing, and even a bit of fiction. I wonder how I can use this portfolio to bypass the two-cents a word stage.

        • Write yourself an outstanding profile. If you’re social media savvy (which I’m not), then promote yourself all over the place. Register on Upwork and Freelancer (and any other you can find) with that outstanding profile and have people find you.

          The factories like the two sites mentioned are exactly that, but you get exposure through those sites to many clients around the world. I registered on the one only to accommodate my one client who had funds deposited there already, but she contacted me through the other after she saw my profile. I haven’t done all the tests and other stuff they push freelancers to do because I don’t see the need for it.

          Create a good profile on LinkedIn and Facebook (and all the others) and keep active, write short articles (~250 words) and post them on your pages – get people to notice you, to come to you. Upskill yourself about personal marketing – the internet is full of articles on how to promote yourself.

          Remember to keep updating your profile with any recent skills. For example, write an eBook and then you can add “eBook” and “ghost writing” to your profile, nobody needs to know it was only one book. BUT, if you can give examples of more, so much the better.

          Once you’ve registered on those sites and added your skills, you will be notified of any jobs matching those skills. I have just been notified of a 30-40k job for $750 (~3c/word). It isn’t a job I would take at this stage of my career, but I did when I was building my referral base. Remember that you don’t have to agree to those fees – I negotiate higher fees. THAT is where the belief in yourself comes in, to have the confidence to negotiate with that client. If the client doesn’t want to pay higher fees, then they can find somebody with poor skills to do their project.

          I got one of my first jobs through a career/jobs portal where the client advertised for an editor for his book. His first language is not English and I answered by correcting his advert. He says he hired me because I was the only one who did that. So look for opportunities outside the factories. Many companies on job sites now advertise for part-time or freelance writers, because that is the way companies are starting to do business; as Nick said, they see the viability in employing on a “by project” basis.

          Good luck!

          • Jolyon Sykes says:

            Thanks again, Milenio. I’ll take all that on board. Here’s a little story for your blog:
            A very short membership of a copy-mill
            Spurred on by optimistic hype from various websites, I joined a copy mill last week. I won’t mention its name – it doesn’t need the publicity and I don’t need the hassle. It operates by posting available jobs on its website, including a brief, number of words required, a deadline, and a fee. Members can then log in and accept a suitable job, that is, enter into a contract to supply suitable copy.
            I checked out the copy-mill’s reputation using Google and found a few comments, some positive, some not. Putting thoughts of dark satanic mills aside, I decided to go ahead. I did the entrance exam – researching and writing a short piece – submitted my résumé, including a list of my publications, and was accepted overnight. I felt that the list of publications had helped. I have been writing things for about thirty years, ever since I first started working in magazine publishing and later when I worked as a university journalism researcher.
            When I logged in next morning, there were three jobs listed, one of which I felt I could do reasonably well. I looked at it more closely: 500 words on a feel-good business topic with a deadline that afternoon. I thought I could research and write it in a couple of hours so that was okay. But the pay! Ten dollars was not going to be enough for even that small amount of work. I decided NOT to click the “I accept this job” button.
            Later in the day, I was curious to see if anyone HAD clicked the button and was not surprised to see that no one had. The job was still available. What did surprise me was that the deadline had moved backward by a few hours and the fee had doubled to twenty dollars.
            “Well,” I thought, “obviously, they are flexible so let’s see how flexible they really are.” I decided to research and write the article and, if by that time no one else had clicked the “I accept this job” button, I’d offer my effort at my price. Two and a half hours later, I had finished and the job was still open so I sent the following message via the website:
            “I have written the required article (reference number). It took about two hours to research and write. That’s $100 for the piece and the assignment of copyright. Looking forward to your reply, Jolyon.”
            Next morning, wondering if my gamble was going to pay off, I tried to log into the website and was immediately greeted by the somewhat unfriendly message, “Account suspended”. That’s really where the story ends. Here’s my next message to them:
            “Account suspended. Hmm… Twenty cent a word isn’t expensive. Does the client want to see my copy? Yours, Jolyon”. There was nothing further from them and now I’ll have to find a home for my as-yet unread feel-good business story. At least I still own the copyright. It might end up as background in an office romance short story. Or something. I hate waste!
            Jolyon Sykes

  6. I’m new to this “write for money” profession. Most of my previous work has been non-fiction -most of the time gratis. Just getting started writing fiction pieces. What pricing models do you use? Do you use the same one for both non-fiction and fiction?

    • Jolyon Sykes says:

      Hello, Lawrence. I’m trying to get the same hourly rate I get as a researcher, about $45 per hour. If my experience (above) is any guide, it still seems to me to be a reasonable expectation…

  7. Apologies for the very late feedback, I’ve been quite busy with wonderful projects!

    @Lawrence Paz and Jolyon Sykes – how long is a piece of string? You will be faced with two decisions as you’re starting out in this business: 1. You need connections (people in your network) if you are going to charge what you charged in a full-time job. 2. You need to build up your reputation in the market if you don’t have the connections, which means you have to start at the bottom.

    So let’s say you earned $4,000 net in corporate and you worked 160 hours per month. That makes it $25/hour. Will anybody pay you that if you are a newcomer without connections? Why should anybody hire you at that price if you cannot show published works?

    I have been a freelancer for a year now, and have worked stupid hours at stupid pay, BUT, I can now charge (and get) $500 to do a light edit of a business eBook.

    In terms of having a fixed model – it will have to go on a “per job” basis. As an example:

    The advertisement reads something like this –

    Need a content writer and blog editor, fixed pay $300 per month.

    GREAT! I can do that in my sleep… so I read further –

    blah blah blah 3 hours per day every day plus write an article of 500 words per day. You will be paid at the end of the month.

    SURE! So I do the sum as an exercise (have already decided against it, but I needed a distraction). $300/month = 3 hours per day * 25 (ave) days = 75 hours per month = $4 per hour (that is without the article writing). I’m from South Africa, so our exchange rate means that $300 will give me a nice little cushion every month, yet, I don’t undervalue myself like that.

    Another example: ~300 x 300 word articles @ $630. Yes, it’s fairly easy to write 300-word articles, but work out the per word pay (remember, it includes your research time).

    BEWARE: When an advert has anything to the effect of… “write an article on xxx and I will choose the best freelancer” – stay away. Those clients want free content without paying for it and you can’t build your portfolio like that.

    If you see a client advertise for “entry level” or “lowest price” or “best price” – stay away, don’t even waste time to reply. While you are building your portfolio, by all means GET THE WORK, but you need to value yourself as well.

    Although I’ve given examples of “per hour” charges, very few jobs pay like that. Of all my jobs over the year, I’ve only done one a “per hour” basis, but I do my calculations to see if the job is worth my effort or not.

    Value yourself and your work. Believe in yourself. You WILL get to those well-paying jobs!

Trackbacks

  1. […] Here’s a nice little reminder: don’t undercharge for your work. […]

  2. […] The Write Life, we agree. It’s important to set a precedent that freelance writers deserve to be compensated fairly for our work and […]

  3. […] 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. […]

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