Setting Your Freelancing Rate

The topic of rates often turns into a heated discussion, whether it’s in the Upwork Community Forums or any other freelance outlet. I think it was summed up best by Rebecca in this post:

You know, I think the people who start the threads don’t realize that this topic has come up repeatedly, and searching first doesn’t occur to them – I never do that, to tell you the truth. So then they get the accumulated disgust of all the people who have been reading these things for months or years. And since they’re always new people, it seems inhospitable.

In-person, people often don’t think before they speak. On the internet, people don’t search before they post. Either way, misunderstandings can occur and it will lead to resentment on both sides.

With all this hostility, pent up or otherwise, sometimes it’s hard to get a straight answer. But in the words of Kenny Rogers, “There’ll be time enough for counting talking when the dealing’s done”…so let’s talk rates, shall we?

Taking advice from The Gambler

Know when to hold ’em – If you’re a professional in your field, you should have a proven track record readily available. Set your rates according to what you think you’re worth, and be able to back it up with a solid portfolio. Even if you are competing in a global market, there will always be buyers willing to pay you what you’re worth – but you have to be able to prove it.

Know when to fold ’em – If you’re just starting out, and don’t have a rich portfolio to show for it, be willing to lower your rates some to compete in the global market. Remember, some providers are living in countries where $10/day goes a lot further than it would here in the US. Remember: you’re just getting your foot in the door, you’re not going to keep this rate forever.

Know when to walk away – Of course, there are certain job categories that simply don’t go hand in hand with high paying rates. Data Entry can be done by almost anyone with a computer. It doesn’t take special degrees or vocational training to send an email or record names in a spreadsheet, and price becomes the deciding factor in 95% of these jobs. You have two options in this case:

Lower your rates to compete, even if it is only temporary
Don’t bid on the job

Know when to run: Some buyers are simply unreasonable in their requests – some of it has to do with the large amount of providers in other countries able to work for lower rates. If a buyer’s expectations are too high for the amount they are willing to pay: don’t apply. It’s as simple as that. Don’t say it’s illegal, because it isn’t. You may say the buyer is cheap, but it is definitely not illegal since you are an independent contractor.

Breaking free of the commodity trap

Unless you have absolutely zero marketable skills (or live in a country where the USD goes a long way), don’t get into Data Entry. If you’re a native English speaker and can form complete sentences, pick up a few grammar resource books and try to break into writing. While there will always be buyers looking for the lowest bidder, writing jobs typically pay higher rates.

The Insider said it better than I can, so I’m just going to link to the posts from their “Make More Money” series here.

Escape the Commodity Trap
You’re Worth How Much? Prove It!
How to Get a Buyer to Pay You More Money
Upwork, How it Works

Just remember, your rates are dictated by you. Yes, there are times when a buyer simply cannot afford to pay what you are asking for, but there are definitely people out there who will.