I was on Twitter last week when I noticed a study by HubStaff that talked about freelancers and earnings.
Some interesting things in there, and not all of them I agree with. Here’s one that stood out:
The rates that freelancers charge are highly dependent on location, discipline, and experience, so it’s impossible to provide average rates that dictate what freelancers should be charging across the board.
Why I think this one is skewed: it assumes that freelancers work with local clients only. And it assumes that location, in a remote world, matters.
I’m not saying the HubStaff people have it wrong. Their data say this is what they see. What I think is wrong is their assumption that it’s the location that matters, when it could well be the freelancer that matters.
Here’s what I mean, illustrated in one more of their bullet points:
In areas where cost of living is lower, freelancers charge at lower rates. In areas where cost of living is higher, freelancers may be able to charge more.
Let’s remove one thing from that sentence: the term “may be able to.” To me, that’s an assumption. Yes, people living in areas where the cost of living is lower may indeed be charging less. Should they?
Double Hell No.
The survey peeps say something else in that first point: “…so it’s impossible to provide average rates that dictate what freelancers should be charging across the board.”
That’s exactly right. It is impossible. And they shouldn’t even try.
Here’s the thing: only the freelance writer in question (you, me, Sarah, Joe…) can say what he or she charges. Trying to spell out average rates is akin to averaging out what a kitchen remodel costs by including everyone from the designers at The Home Depot to the top-flight designers who handle celebrity and billionaire remodels. You’re going to come up with a number that’s just wrong no matter what. I can say that because we’ve had prices from both The Home Depot (a few thousand bucks) to a 5-star Angie’s List designer who does kitchens in Venezuela as well as here (lots of thousands).
I’m a trade writer. I charge more because of my experience, my focus, and my reputation. Let’s assume Joe has been writing for four years and does a lot of blog work for news sites — some of them paid, some of them not.
Let’s say I make $60K a year. Joe makes $32K. I live in the Philadelphia suburbs. Joe lives in St. George, Utah. (Nice place, too.) I charge $150 an hour. Joe charges $70 an hour.
Who’s cost of living is higher? In essence, Joe and I may be making exactly what each of us needs to live comfortably. We both answer the same survey questions. So now the survey is measuring people with different needs and different niches.
Let’s add to that the fallacy that where we live matters to what we charge. I work with a client who works from his RV. He lives in a dozen places a summer. If we’re basing our pay solely on location, what should he charge? If I decide to spend a year back home in western PA, do I have to drop my rate because I’m now working from an area where things are cheaper?
Again, hell no.
Triple Hell No.
Let’s try something else. Let’s assume Joe has the same experience I do, the same niche, and a decent reputation with clients. He’s out in St. George charging $70 an hour. I’m in the Philly burbs charging my $150.
Why isn’t Joe charging more? And why am I getting more work than Joe is?
Because what you charge reflects a certain level of professionalism.
Clients see my rates, which probably align with those of other writers they’ve worked with, and then they see Joe’s. Hmm, why isn’t he charging more? Doesn’t he understand how to charge? they wonder. Or is he a little behind-the-curve on what he should be charging?
Joe’s reputation might just take a hit because potential clients don’t see him in Utah. They see him working with them. The only concern they have is the work being done accurately and on time.
It’s no longer about cost of living, nor location. It’s about competing with writers who are charging much more.
Why It Really, Really Matters
When I first started freelancing full time, I got a gig with my friend’s company, a global consulting group. She sent me a note asking for my availability and my rate. I gave her my then-rate of $90 an hour.
The phone rang a minute later. “You meant to write $125, didn’t you?”
“You meant to your rate is really $125, right?”
Rate raised and lesson learned. She told me later that the company was used to seeing the higher rate, and that anything under $100/hr. wasn’t taken seriously.
So even with a stellar background and happy clients, Joe would be left out of consideration.
It’s a case of his location hurting his chances because of his assumptions, not because the client cares where he sits and types.
It’s Not About “What the Market Will Bear”
I hear this argument too often — writers can charge only what the market will bear. Last time I heard it was a guy telling a bunch of writers bemoaning getting paid $30 an article that they should just suck it up because hey, the market won’t accept anything higher. Ironically, this was someone who was charging $250 an hour for consulting, and I suspect he didn’t consult the “market” before deciding the price.
It’s bullshit. The “market” doesn’t determine your rate — you do. Your clients accept your rate or they’re not your clients. You can negotiate to your heart’s content — or not. Your price is totally yours to control. Sure, you may not be able to work with every client, no matter where they’re located. But their budgets should not be the primary driver for you setting your rates. Their budgets come into play only when you’re negotiating, and only if you want it to.
Writers, does location matter for you?
Did you ever have a situation where you were told to charge more?
Was there ever a time when you realized you should have charged more? How did you remedy that going forward?