What Prices to Charge as a Freelancer or Artist

I got this from CGArchitect, please visit the following link and check the comments below;

http://www.cgarchitect.com/news/newsfeed.asp?nid=4824

What Prices to Charge as a Freelancer or Artist

Intro­duc­tion
Unless you’re intent on liv­ing on the streets, work­ing side jobs, or are for­tu­nate to have the sup­port of wealthy par­ents and bene­fac­tors, most of us at one point or another have to ask our­selves — “what prices should I charge?” Pric­ing out and valu­ing your work is a great mys­tery. If you look around the Inter­net and even ask oth­ers for advice, the amount of money — espe­cially for artists, ranges a very wide gamut. The price point is very dif­fi­cult to gauge with so many peo­ple out there. Of course to some degree, what you can charge is indica­tive of your skill level, but for the sake of this arti­cle I’m just going to dis­cuss what an aver­age busi­ness­man, free­lancer, artist, and even pho­tog­ra­pher should be charg­ing at the very minimum.
For the sake of this arti­cle, I’m going to use my expe­ri­ence as a free­lancer for close to the past 10 years and run­ning my com­pany, LunarStu­dio. The same expe­ri­ence should apply to most peo­ple in a vari­ety of dif­fer­ent situations.

The Inter­net — The Global Price Mediator
At one point before the Inter­net grew in size and pop­u­lar­ity, if you wanted a tele­vi­sion, you would drive around town to var­i­ous elec­tron­ics store. The price would have prob­a­bly remained rel­a­tively fixed. If you drove to a com­peti­tor in the same neigh­bor­hood, you might have found sev­eral hun­dreds of dol­lars in sav­ings. If you drove even fur­ther — per­haps to another state — the price may have gone down or up sev­eral hun­dred instead. There really was no base­line com­par­i­son from place to place. Prices were more or less reg­u­lated to the avail­abil­ity and gen­eral income of where you lived.
Enter the shop­ping world of the Inter­net. No longer were peo­ple con­fined to the neigh­bor­hood elec­tron­ics store. If you saw a tele­vi­sion you liked at a phys­i­cal location/store, you could come back home and do a search for that same TV online. In the Internet’s infancy, you could dis­cover huge sav­ings on the same exact prod­uct, per­haps even includ­ing free ship­ping and no taxes. Sud­denly, you were aware that there were great deals to be had online. You saw what one com­pany was charg­ing at one loca­tion, and what another was charg­ing in a com­pletely dif­fer­ent part of the coun­try. This is com­par­i­son shop­ping on a larger, more instan­ta­neous and con­ve­nient level.
The Inter­net had the effect of expos­ing exor­bi­tantly high prices in one area, and show­ing “rock bot­tom” prices in another. Over time, the highs and the lows across the coun­try evened out to a degree. Your local store started to honor TV deals that you could find out on the Inter­net. The bound­aries orig­i­nally set by a lack of infor­ma­tion and geog­ra­phy started to evap­o­rate. The Inter­net became the great price mediator.
Now you may be ask­ing your­self, how exactly does this apply to your busi­ness? The same anal­ogy applies to many of your ser­vices. As prices of goods around the coun­try start to level off, the highs and lows of what you can charge has also been affected. Every­thing includ­ing aver­age income and salary starts to aver­age out. In some parts of the coun­try, there are still higher costs of liv­ing and major dif­fer­ences in salary, but these dif­fer­ences are going to even­tu­ally fol­low suit.
Let’s take for exam­ple two dig­i­tal artists that work remotely off of the Inter­net. One is out in farm coun­try — some­where out in Okla­homa. We’ll call him “Artist A.” Artist A has a very low cost of liv­ing. He pay $500/month in rent. Most of his bills tends to be rel­a­tively inex­pen­sive for him.
Now let’s take “Artist B.” Artist B lives in the heart of New York City. His rent is $2,000/month. The costs of liv­ing are gen­er­ally much higher for him.
Let’s sup­pose that both of these artists pro­duce a sim­i­lar qual­ity of work. Guess who has to charge more in order to keep up their liv­ing expenses? Artist B.
Unfor­tu­nately, Artist A can eas­ily under­cut the more expen­sive Artist B. On the other hand, is Artist A really doing him­self any favors by dras­ti­cally under­cut­ting the more expen­sive Artist B? In the short-term, yes. It costs a lot less for Artist A to stay alive. But guess what — the prices of the TVs they were look­ing at ear­lier still remains the same now. Artist A in effect has to work harder to afford that tele­vi­sion because he’s charg­ing much less. Artist B also has to get more jobs in the door (because he’s charg­ing higher prices) in order to com­pete with Artist A in order to buy that tele­vi­sion. Both artists have made more work for them­selves sim­ply because more com­pe­ti­tion has entered the field via the Internet.
So what is the solu­tion to this prob­lem then? You can choose to wait out the “great Inter­net medi­a­tion” — as to how long that will take is anyone’s guess. We all have to wait irre­gard­less. You could also try pro­duc­ing sub­stan­tially bet­ter work and charge more, but there will always be peo­ple who don’t rec­og­nize bet­ter qual­ity and sim­ply go for the low­est prices. You could also per­form lower qual­ity work, and at that point it becomes a num­bers game as to how many clients you can shove through any given door before they real­ize they’re get­ting sub­stan­dard work. In essence, you’re still mak­ing the same amount of work. If you want qual­ity — then you have to pay for it.
What the aver­age per­son has to do (assum­ing that your skills are aver­age in nature) is to find the mid­dle ground — a happy medium. A price point which isn’t “too high” and not “too low.” As your skills progress, you should be able to charge more over time as your ser­vices come into greater demand.
The point is that you’re not doing any­one any favors by under­cut­ting your fel­low artist (or busi­ness­man) in the age of the Inter­net. In fact, you may be doing more harm than good. Ulti­mately, you need to pro­vide a qual­ity prod­uct with a qual­ity ser­vice, and hope that makes all the dif­fer­ence. In a per­fect world, we would all be charg­ing sim­i­lar prices, and only those that charge higher are pro­duc­ing bet­ter quality.

Com­par­ing Others
So you have looked around the Inter­net and checked to see what other com­peti­tors and col­leagues are charg­ing. You have one rel­a­tively unknown per­son in the mid­dle of nowhere try­ing to charge $25 for a pho­to­graph. On the other hand, you see another per­son with a lit­tle bit of bet­ter work charg­ing $250. Which price should you charge? Per­haps like most peo­ple, you con­sider your­self an “unknown” too and are just start­ing out or try­ing to make ends meet. The first incli­na­tion may be to charge on the lower end of the spec­trum — $25. But are you sell­ing your­self short? Per­haps if you charge closer to $250, oth­ers will see your work as “more pro­fes­sional” or “more valu­able.” It’s a tricky ques­tion with a seem­ingly tricky answer.
In order to answer this ques­tion, we can look at other var­i­ous indus­tries for a base­line number.
Take for exam­ple a plumber or an elec­tri­cian. They can eas­ily charge $100-$150/hour. If your elec­tric­ity goes out or your toi­let stops work­ing — you have no real alter­na­tive aside from try­ing to fix it your­self. You’re more or less forced to pay those prices. How­ever, there’s a rea­son why you pay them these rates. Even at those prices, I don’t see many plumbers and elec­tri­cians liv­ing in man­sions. The stan­dard of liv­ing fac­tor­ing in risk and reward (for run­ning your own busi­ness) all aver­ages out.
How about pro­fes­sional pho­tog­ra­phers? They’ll bill out $1,500-$2,500 a day. What is not appar­ent to the aver­age person/onlooker is that they’ll spend a few days prior nego­ti­at­ing with poten­tial clients, a few days in post process after a shoot, and a few days clean­ing up all of their pre­vi­ous negotiations.
As for archi­tects, how much do you sup­pose their com­pa­nies bill out on a hourly basis? The aver­age is around $125/hour. The prin­ci­pals? They can push $200/hour.
Now let’s take a look at my archi­tec­tural illus­tra­tion work. Run­ning my com­pany (art­work cre­ation, 3D knowl­edge, self-education, mar­ket­ing, invoic­ing, sales, etc.) is more com­pli­cated than any other job I’ve per­son­ally ever seen and requires mul­ti­ple skill sets. What do you think I should be charg­ing if I spend an hour’s worth of work on something?
You may say to your­self, “well, art isn’t a neces­sity.” How­ever in my field, I argue that it is. My illus­tra­tion work helps sell mul­ti­mil­lion dol­lar build­ings based on ideas and blue­prints. If some­one is plan­ning to put up a $50 mil­lion dol­lar build­ing and it all hinges on a pretty pic­ture, do you think it’s worth spend­ing $10,000 or more? It sure is. My work gets ordi­nances passed by town boards. It com­mu­ni­cates to design­ers what some­thing will look like even before it goes to man­u­fac­tur­ing. And it helps fill spaces quickly. That’s a very use­ful ser­vice to peo­ple and companies.
So I’ll ask the ques­tion again — what do you think I should be charg­ing? My work is more com­pli­cated than aver­age and it is very use­ful. I know from per­sonal expe­ri­ence that I’ve spent almost 10 years, work­ing and study­ing 16 hour days, almost 7 days a week with no vaca­tion doing this. Shouldn’t I gain some level of reward on top of all the energy and extra efforts I’ve put into my craft?
I’ll make the same point as I did in the pre­vi­ous sec­tion. You’re not doing your­self any favors by charg­ing low. That only works for the short-term. The same applies for charg­ing high unless you’re deter­mined to pro­duce a bet­ter qual­ity and pro­vide a bet­ter ser­vice. You need to find that mid­dle ground.

Cost of Liv­ing Breakdown
Now that I’ve more or less made my argu­ment that geo­graph­i­cal loca­tion is becom­ing increas­ingly irrel­e­vant in today’s dig­i­tal age, let’s assume that you’re an aver­age pro­fes­sional artist liv­ing in a city all by your lone­some in an apart­ment. You’re sin­gle with no chil­dren. All you do is free­lance for work. This “should” be the most com­mon sit­u­a­tion. Let’s tally up your expenses:
Rent: $1,500/month or $18,000/year. Elec­tric­ity: $250/month or $3,000/year.
Heat­ing (assum­ing it’s effi­cient): $250/month or $3,000/year.
High-Speed Internet/Digital Voice/Television (hey, it’s bun­dled): $200/month or $2,400/year.
Cell Phone with data access (most peo­ple have them): $80/month or $960/year.
Car loan or finance: $300/month or $3,600/year.
Gro­ceries (we all have to eat): $200/month or $2,400/year. TOTAL: $33,360/year.
This means that you have to make at least $33,360/year in order to just pay your bills. I’m not even fac­tor­ing in credit cards, health insur­ance, and mis­cel­la­neous equip­ment expenses — that could eas­ily add another $8,500 to that total. So let’s add in those items:
Health Insur­ance (aver­age Mass­a­chu­setts plan): $300/month or $3,600 year.
Credit card (you ran into trou­ble and have to pay it off monthly): $150/month or $1,800/year.
Misc. equip­ment expenses (ie. a high end com­puter for graph­ics, soft­ware, repairs, .etc): $2,500/year
Pre­vi­ous total: $33,360/year. REVISED TOTAL #1: $41,260/year.
So we’re up to a lit­tle over$40,000/year. That’s not includ­ing 1/3 busi­ness taxes, 10%/annually in retire­ment sav­ings, sav­ings for your poten­tial kid’s col­lege edu­ca­tion, and sav­ings for a nice down-payment on a home. I like round num­bers and I’m going to jump a few more steps to include these items.
REVISED TOTAL #2: $60,000/year.
That’s right. You need to make $60,000/year just to sur­vive in a city by your­self. How do most peo­ple do it? They man­age, but they often strug­gle to just keep their heads above water. It also gen­eral requires a dual income either through hav­ing room­mates or through mar­riage. Add to this eco­nomic uncer­tainty such as the global depres­sion in 2009, and you’re sit­ting on the edge. Here are some sta­tis­tics as to the aver­age income and salary within the United States.
I’m not try­ing to scare any­one here, but rather I’m point­ing out that you should at the very min­i­mum be tar­get­ing $60,000 year in 2010 just to earn a living.

How Much to Charge
Let’s say that we agree on $60,000/year as a tar­get fig­ure. How much does that mean we need to make per week at a min­i­mum? Let’s say that you work 50 weeks out of the whole year. That breaks down to $1,200/week or roughly $4,800. Again, I like round num­bers so you need to earn $5,000/month.
Let’s say that you’re an artist and you’re lucky to get two jobs per month that take a week per job. Each job would need to cost $2,500 in order to meet your tar­get goal of $60,000/year.
Assum­ing (and this is a big assump­tion) that all of your mar­ket­ing duck­ies are lined-up in a row and that you can man­age to pull four jobs per month, then maybe you can charge $1,250/per job at the very min­i­mum. At that min­i­mum price point, you are really risk­ing your own liveli­hood and future. Truth­fully, you can’t just risk stay­ing at the base­line, but should instead be focus­ing on get­ting ahead.
So. how much should a per­son charge? Real­is­ti­cally, you may only get two jobs per month — if that. Most artists don’t. Either you’ll need to seri­ously improve your mar­ket­ing strate­gies and obtain more jobs, or fit the aver­age quan­tity of jobs you receive per year into that $5,000 month target.
Guess how much most pro­fes­sional ren­der­ing artists at the top of their game charge per image? $4,000 on up. I’ve heard of fig­ures on the order of $12,000 per image for the very best. They may spend half a month work­ing on a sin­gle image, but that may be the only image they get. If they receive two or more, then they’re often happy. The next month they may have none. You’re doing your­self and oth­ers no favors by low-balling one another. All it does to serve in the long-run is lower the over­all qual­ity of work involved.
I’ve also heard of some well-known 3D stu­dios charg­ing around $10,000 per image. Is it high­way rob­bery? Absolutely not. They’re sim­ply try­ing to meet their over­head in a rapidly chang­ing economy.
You may be say­ing to your­self, “haha, I don’t live in a city so I don’t need to charge nearly that free­lanc­ing amount” or “I’m mar­ried so that doesn’t apply.” I have news for you — pull your head out of your ass. We are liv­ing in a dig­i­tal age now. Those bound­aries and rules do not apply. It’s also a mat­ter of time before the play­ing field is more or less lev­eled. There’s no rea­son why any of us should become com­pla­cent to sim­ply strug­gle and “get by” on keep­ing that car of your run­ning on fumes. If you value your work and hard-earned efforts, than that value has a min­i­mum price tag you should try to meet. You need to change your mind-set. $2,500 per image at the very least is a good tar­get goal when start­ing out on your own. It’s not always real­is­ti­cally pos­si­ble, but you should keep that tar­get fig­ure in mind. In fact, I’d go so far as to say that you should be tar­get­ing over $4,000 per image in your mind. The more you value your work to be that fig­ure, the more it will actu­ally become to be worth that amount. Don’t sell your­self short.

Tak­ing Your Prac­tice One Step Fur­ther-Get­ting Ahead
So now that I’ve hope­fully con­vinced you that you may be charg­ing too lit­tle, I’d like to point out another angle. Pre­tend for a moment that you are an actual busi­ness with an employee. Not only are you tak­ing your orig­i­nal fig­ure of $60,000 that you had to make, but you also have to insure their salary over the course of the year. That fig­ure alone could eas­ily run $50,000 (or more) in a very tech­ni­cal field. You also wouldn’t sim­ply want a help­ing hand — you deserve to make a profit for the addi­tional risk and respon­si­bil­i­ties you’re putting upon your­self. So you’ve basi­cally more than dou­bled the amount of work you must do and charge in order to keep your head float­ing above water.
The artist needs to stop think­ing of “me, me, and me.” Unless you have an extra­or­di­nary gim­mick, luck, or style — that “fame” you might be seek­ing will often prove elu­sive. You need to take your ego out of the mind­set of being the lone artist. Pre­tend for a sec­ond that you are a full-fledged com­pany. What­ever charges you pro­posed in the pre­vi­ous sec­tion starts to quickly look small. Not only are you tar­get­ing that $4,000 mark, but you have to set your sights even higher than that.

Sum­mary
I have many rea­sons why I wrote this arti­cle. In par­tic­u­lar, I’ve seen many artists ask them­selves over the years, “how much should I charge?” I’ve seen many crazy answers. I also speak from per­sonal expe­ri­ence. When a lit­tle more than half of all small busi­nesses fail within the first five years, I con­sider LunarStu­dio to be a suc­cess in that depart­ment. By help­ing fel­low artists and busi­nesses alike through healthy dis­cus­sion about this topic, in turn I hope to raise my own stan­dards and rates. If we all work together (and stick together) to help deter­mine the low­est com­mon sin­gle denom­i­na­tor any sin­gle one of us can charge, then we can pre­vent dras­ti­cally under­cut­ting one another which often leads to more harm than good. Artists and free­lancers alike need to start valu­ing their work, time, and efforts and stop sell­ing them­selves short. As much as I don’t like think­ing of our art­work “as a busi­ness” from a philo­soph­i­cal per­spec­tive, being a “pro­fes­sional artist” entails that we carry our­selves in a pro­fes­sional and respec­tive manner.

hmmm interesting sir nilo but im afraid huling huli na , even sa outsource jobs , ang titindi ng mga presyo , and i dont think kaya pa nila i control kasi nga may mediator who also benefits from every transaction , i just can share right now ang link baka ma ban ako parating pa ang debit card ko, pero when i went thru the job openings nakakatakot mga presyo ...ok pa dito sa atin kahit sa 1500 nakakasingil pa ako and many of us here na matagal na sa larangan na ito ... buti na lng nakakuha ako ngayon ng maganda presyo and direct sa company thru the help of my student sa australia ... but doon sa sinasabi ko naku po... masusuka kayo ...