Why I Won’t Discount My Rate for You

Posted on Saturday, April 19th, 2014 No Comments

contractor pricing

Yesterday I had a conversation that strongly reinforced my decision to set up my pricing the way I have.

Someone called me asking for an estimate on a small project. I could tell immediately that this person wasn’t going to hire me because he was setting up an affiliate website selling diet pills. I don’t necessarily mind working on that kind of website, but generally a person trying to make money with a scam isn’t going to hire someone for quality consulting work.

I gave him an estimate for the project. He emailed me later to say, “Actually, your estimate is way over my budget. But I hope we can work something out because I want to find someone for a lot of work in the future.”

Nice try. What this really means is that not only does he want me to discount my price now, but he wants to set a precedent for which I have to always discount my price for him. (And there won’t be any projects in the future anyway.)

It seems like this happens a lot in the freelance world. Something about it makes people think they can, or even should, try to negotiate a lower price.

I’m not a car salesman. I didn’t put up an inflated sticker price with the assumption that I’d let it be negotiated downwards later.

My rate is very reasonable. In fact, I could raise it by about 50% and it would still be reasonable.

Here’s why:

Non-Employee Savings

1. Since I’m not your employee, you save a ton of money on employee taxes.

2. Since I’m not your employee, you save a ton of money on benefits. You don’t have to pay me for sick time, personal time, or health insurance.

3. Since I’m not your employee, I don’t take up space in your office and I don’t use any of your equipment, software, furniture, or supplies.

4. Since I’m not your employee, you hire me for only the hours I actually perform work. I don’t sit in your office looking at Facebook and Reddit the rest of the time.

I Pay for All That Stuff

1. Since I’m self employed, I have to charge a reasonable amount because I pay self-employment taxes.

2. Since I’m self employed, I have to charge a reasonable amount because I have to pay for 100% of my health insurance.

3. Since I’m self employed, I have to charge a reasonable amount because I buy all of my own equipment, software, furniture, and supplies.

4. Since I’m self employed, I have to charge a reasonable amount because I only get paid for the actual work that I do. I don’t charge you for things like phone conversations, my time spent on invoicing, or the time I spend on my own marketing.

My Time is Worth the Cost

I’ve been working on websites in various capacities since 2000, and I wouldn’t be offering a service if I wasn’t good at it. I do work that requires a high level of technical skill and experience. I keep up with the industry by reading and researching every day. Quality work costs money, and you get what you pay for.

I display my hourly rate so that you can leave if you feel it’s too high. If you want to hire someone to work for $10 an hour, it’s a waste of both of our time for you to contact me.

If you’re hiring a website consultant, that means you have work that needs to be done and you can’t do it yourself. When you take your car to a mechanic, you understand that you’re paying them for their expertise and experience. You can’t fix your car, so you pay someone who has the training and knowledge to do it. You don’t try to con them into lowering their price by promising to come back to them again. Maybe he will offer you a coupon if you come back, or refer a friend. Count that as free money for you.

Some Customers Aren’t Worth the Time

A few years ago when I was doing freelance graphic design, I had a client call me and immediately ask for a lower price than advertised. She wanted it lowered by about 40%. I was just trying to earn some extra cash, so I agreed, figuring it was more money than I’d have if I said no.

She wanted a business card created, and after I gave her the file, she took it to some cheap place to get it printed, like Staples or some other office chain. She didn’t like how they printed it and used that as an excuse to demand her money back from me, as if I had anything to do with it.

I told her I’d given her what she paid for, and to get someone else to work on her business cards next time. But it was the second or third time that someone asked for discounts upfront and then tried to get out of paying later.

So nowadays, if you start a conversation with me by asking for discounts, that tells me that you’re going to be too much trouble and you don’t value my time.

I Value YOUR Time

My work process, and my habit in general life, is to be as efficient as possible. I call you when I say I will. I meet with you when I say I will. I send proposals, contracts, and invoices when I say I will. I keep you updated during a project and I do my best to stick to an estimated timeline. I make everything as simple as possible, which is always better. That’s the main reason why I decided to make Zen the theme of this website.

Nothing about what I do is an attempt to devalue your time or your business, and I expect the same from anyone else that I work with.

Ask me for a list of references and you’ll get contact information for people who will tell you that my time was valuable and that I valued their time.

Pricing and Income are Scalable

Writing this blog post has almost convinced me to raise my rate. Others have doubled and re-doubled their rates and got just as much business as before. In fact, it seems that the higher the cost, the more people value the product or service.

What do you charge?

I will keep my rate the same for now, at $65 per hour. I won’t double it to $130 or re-double it to $260 because I’m not interested in hurting small businesses. But that does not mean that I will let anyone de-value my time or my work.

What does your business charge for your service or products? Do you try to charge the lowest amount possible, or do you charge a higher rate for higher value?

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