Story: How much is an appropriate price?
I worked as a graphic designer in Tokyo, Japan for 6 years. I often sent an estimate to clients at that time. However, the price was almost fixed by convention. I didn’t need to consider it.
When I started as a freelance designer in Vancouver, British Columbia in March 2016, I didn’t have any clues about pricing. Because it can not be helped, I decided the price based on hourly and ambiguous sense.
Now I think, my estimate was too low. I could get enough projects, at least 5 ongoings during a whole year. I was always busy. I worked day and night, 7 am to 9 pm every day.
I asked other designers at Meet Up and gradually realized something wrong. When I was in trouble, I found @TheFutur, Jose Caballer & Chris Do, on YouTube below.
Ref.01: How to estimate and bid projects
©TheFutur
7:00 Four things to consider when estimating a project bid
1. Does the budget match the concept?
2. Do you want to work with them?
3. Are you the 3rd bid?
4. New relationship/account.
12:00 Types of Estimates
1. Project Based
2. Hourly
3. Cost + / Time and Materials
4. Value-Based = Based on client’s upside
5. % of Revenue
22:07 Example Project Bid Estimate Breakdown
25:15 Law of Contrast (Soft Close)
Action: No more a piece of printing project
I response above:
1. ?
2. Yes
3. No
4. Yes
I didn’t consider developing a future portfolio at that time. I had enough amount of work. I just had the confidence to achieve a client requirement. Looking back now, it becomes proof of my skills though.
After I watched the video, I gradually shifted my estimate, from hourly to project-based or value-based*. I basically don’t take just graphic design for printing anymore.
*Value-based pricing is setting prices based on the perceived value to the customer, rather than just production costs. It involves understanding customer needs, segmenting markets, and adjusting pricing to capture the value customers see in a product or service. It often leads to higher profit margins when done effectively.
For example, I can provide a well-organized flyer, but a client doesn’t feel much value on it anymore(at most $500?). A client can make it by the online free template if they don’t mind customer impression. In addition, a client cannot distinguish a designer’s work and template even if you put the effort into detail, font, font size, letter spacing, letter heights, color, margin, and trimming.
The problem is not only external factors. To be honest, I’m not sure whether a flyer contributes to achieving a client’s goal (e.g. increasing sales) or not. Social media marketing may be a better contribution than that. That’s why my current projects are web design instead of printing graphic design.
Result: Shift hourly-based to project/value-based
I applied this pricing immediately without explaining it to existing clients. A few clients had disappeared. I’ve reflected on it. I had to call and show appreciation first, but I learned it later at @TheFutur.
After all, I could maintain a time instead of making money. Shortly afterward, new clients contacted me for a web project. The price increased from a few hundred dollars to a few thousand. I’ve been able to utilize time for my learning/improvements, such as user experience design, new portfolio, social media marketing, and public speaking, Toastmasters.
I don’t look back on previous works. Now I just focus on short-term goals in 2019.
Recap: What did I learn?
1. Don’t estimate for getting a project. High estimation even potential client rejects is much better than low estimation. Possess confidence.
2. Shows your values. How much profit or likes/followers will you increase for clients?
3. Use time to improve your skills. UX, video editing, and presentation/communication skills are very effective.
Reference:
Update: November 6, 2021
I published this blog on Oct 25, 2018, 3 years ago 😮. Google mentioned that some people checked this blog in October 2021. So, I would like to update the current situation.
The project ratio in 2021:
– Website: 50%
– Branding: 30%
– Graphics: 10%
– Digital Marketing: 10%
Where inquiries come from:
– Upwork: 50%
– Reference: 30%
– Local(Google search): 20%
*Contract work included.
I am still working on graphic design, flyer/brochure etc, US$300-$500 per project. It does not have any stress for me. Digital marketing indicates Facebook Ads and Google Ads. It’s between $200-$400 per month. The ads running cost is paid for by the client. The majority of my work is web design(WordPress/Webflow/Wix) and branding projects. The minimum engagement is $2000.
I don’t need to look back this process right now, but I was learning something new during this 3 years continually. In 2021, I keep expanding my area of work, WordPress, Webflow and Wix. Often a project has come before I learn. Either way, I take full responsibility for the project.
I am quite an ordinary designer. Therefore, it takes 3 years. I am just doing what I love. This is cliche, but I could come to this point. You can do it and can beyond my business as a freelancer.
Please send me your experience of a freelance journey. I look forward to hearing from you. 👋🏻
Update: October 30, 2023
I didn’t recall when I last updated this blog. Since 2021, I’ve gained experience. In 2022, I worked as a contractor for a local design agency, mainly on brand identity, brand guidelines, and web design projects, while continuing to freelance.
My mistake was not staying active on Upwork until August 2023, causing my connects (a kind of point for bidding the project on Upwork) to exceed 600. If you’re an Upwork user, please keep bidding for future projects. Offline sales are much more difficult.
Skilled designers and native English speakers can also consider Toptal, although I faced rejection from them.
The project ratio in 2021:
Branding/Website: 75%
Graphics: 10%
Digital Marketing: 15%
(*Branding projects often include web design)
Lead generation in 2023:
Upwork: 50%
Local (Google search): 25%
References: 25%
(Contract work included)
Graphic design skills are core, but I have not had any graphic design projects. After I developed and delivered a website for a client, I have helped with updating and optimizing the website (SEO). It is making MRR (recurring revenue).
Pricing is still not easy. I estimate the project, $50/hr or $2K-10K/project. I have missed the projects last few months.
In 2023, the world is unstable. AI will be real. Please keep learning. I look forward to hearing your story. 👋🏻
A good review is always helpful. Upwork can be one of local SEO.
Please do not forget to check your business on Google. One of the questions for brand strategy is, ‘How potential clients find your business?‘
