How do you get paid what you're worth as a freelancer?

In my opinion, your freelance price should reflect the task the customer actually needed. In October 2010, I responded to dissatisfaction with low prices on Amino Freelancer, in which I had an interest myself.

Freelance pricing and customer needs

I thought a highly experienced specialist sometimes bid on a task where the customer wanted something simpler. The full professional package wasn’t necessarily what the customer wanted or could pay for.

My advice was to investigate the task and budget before spending time bidding. Rejecting the expensive solution didn’t in itself mean experience had no value.

I needed a simple MP3 solution myself

When my videos needed converting to MP3, I received different offers. Someone I knew from previous work had made a solution automating part of the task.

It suited what I needed. I didn’t want a bigger manual audio production, so chose the simpler solution.

Show what makes your work valuable

I suggested specialising and showing concrete examples of your work. A completed profile, a portfolio and a good reputation could help customers understand the difference.

I wanted to be good at both the work itself and explaining its value. Pricing and earnings information in the video are my examples from 2010, not current market prices or a promise of particular earnings.

Also read about low prices and self-service for different customers.

You shouldn’t bid on every task

I’ve again received an email from a freelancer who’s angry and wants to leave Amino Freelancer. Meanwhile, there’s a debate about low prices. I understand the frustration, but I think some arises from bidding on the wrong tasks.

A typical story is an experienced graphic designer who’s worked for 15 years, handled major tasks and wants 1,200 kroner an hour. Then they bid on a website, and the job goes to an 18-year-old working much more cheaply.

What should we do about it? Exclude the young person? If an 18-year-old can make money building a website for 100 kroner an hour, I think he should be allowed to. It’s a free market.

The experienced person may say: He doesn’t do it as well as me. No, but not every task needs the entire package you can deliver either.

You don’t hire a bus to take the family to the woods

I have a holiday home on Bornholm. Some people enquire and then think it’s expensive. But it’s a house with five bedrooms. If they only need room for four people, perhaps it’s simply the wrong house for their needs.

It’s a bit like hiring a bus when you only need to take the family to the woods.

The same can happen when a professional logo designer with 20 years’ experience bids on a logo for a young entrepreneur who’s just started an online shop. You may think graphic identity is incredibly important. But perhaps the customer has a budget of 200 to 500 kroner and just needs to get started.

Look at the budget and ask if you’re unsure. If the task doesn’t suit you, leave it. Don’t spend five seconds getting annoyed about it.

A young person may make a logo you find ugly. But if the customer is happy and gets what they wanted within budget, it can be a perfectly good solution for them.

My own job posting: From 300 kroner to ten kroner per video

I had a task on Amino Freelancer the other day. I wanted my YouTube videos converted to MP3 so people could listen through iTunes and elsewhere. I didn’t have the files to hand, so they needed downloading from YouTube.

I received five or six good offers. The most expensive was 300 kroner per video, and the cheapest ten kroner. I knew the person making the cheap offer a little from previous work he’d done brilliantly.

I asked how he’d do it. He’d written a little script and connected various programs. Then he could download the videos automatically and partly automate uploading them to the website too. It didn’t take him very long.

I don’t know what the man offering 300 kroner intended. Perhaps he’d download them manually, improve the sound and do more with each file. But all that was something I hadn’t requested and didn’t need.

I simply needed videos turned into audio files. I didn’t need an old radio technician lovingly tending every recording. The young person had found an innovative way to solve my exact task.

The cheap solution brought more work and a good hourly rate

I actually thought ten kroner was too little and said he should get 25 kroner per video.

Originally, I’d only planned to convert around 25 videos. I perhaps expected 100 or 200 kroner each. I couldn’t pay that for all roughly 170 videos to offer people a free service. My financial resources have limits too.

With the automated solution, we could convert every video. And as I assessed the work, the young person earned around 500 to 600 kroner an hour. Not many 18-year-olds do that.

He made money, I got a good service and viewers could download audio files and avoid looking at my ugly face. It was good for everyone.

You can imagine a more expensive supplier getting angry and feeling undercut. But this wasn’t necessarily someone working for a hopelessly low hourly rate. It was someone finding a smarter working method.

The internet makes your work transparent too

Now comes the hard part, which I know won’t make me popular: I think the days are gone when you could show two or three good examples, deliver something mediocre and still charge a lot.

Services such as Amino Freelancer and Elance make the market more transparent. It’s a bit like buying a dishwasher yourself and comparing prices on four or five websites. You won’t pay much more for the same machine just because the shop has a fancy name.

If an 18-year-old or an overseas supplier can deliver the result the customer wants more cheaply than you, that’s whom the customer chooses. In the video, I use a Chinese supplier among my examples of international price competition.

That transparency is nice when you’re buying. It can feel less nice when it makes your own work and price easy to compare.

But if your work is better, show the difference. Customers can’t be expected to guess why you want a thousand kroner an hour for something others offer much more cheaply.

Demonstrate your value as a freelancer

Many people complaining to me haven’t even completed their profiles properly. They haven’t added their good projects or shown links to work they’re proud of. They haven’t explained what the customer gets for the money.

Build your portfolio. Show your work. Help others in relevant discussions so they experience what you can do. Perhaps make a draft or do some free work you can present to demonstrate your skill.

My advice is to specialise, become exceptionally skilled and document it. Look after your personal brand and network. Make yourself indispensable. I also recommend Seth Godin’s book Linchpin in that connection.

And accept that some tasks go to others. Not every customer needs your greatest abilities. Some simply need a basic logo or videos converted to MP3. If you get annoyed about every task like that, I think freelance life will be hard for you.

A good product needs to be sold well too

We know that competition from SPAMfighter. Our Slow-PCfighter is a registry scanner in a market with around 200 other products, as I describe it then. I’m not saying our product is significantly better than all the others.

Yet we’d sold almost 400,000 licences in a year. We’d worked on our reputation, visual identity, usability and website. We were good at buying Google AdWords and the work around the product.

The product needs to be good, but marketing matters too. It’s exactly the same for you as a freelancer: Be good at your work and good at showing and explaining it.

The world won’t return to what you knew before just because you’re unhappy with competition. Put your energy into finding the right tasks and showing why you’re right for them. Good luck. I hope you get lots of jobs. Also read Iværksætter til jeg dør about my experiences of developing a business.

Best wishes, Martin