Tips for Pricing Your Work

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    Animation Pagoda Staff
    Animation Pagoda Staff
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    Pricing Guidelines

    Putting a price tag on your own work can be a challenge when just starting out in the freelancing business. Because the freelance marketplace runs on supply and demand, prices can vary drastically. Clients are also often just as clueless about how much they should pay for certain types of jobs.

    The general rule of thumb is to pick an amount you are comfortable working for, and then stick by that rate.  If people ask you to work for less, don’t undersell yourself.  It’s ok to turn down commissions if the money or clients just don’t seem right for the amount of work involved.

    Rates vary based on a number of factors and the conditions of each project.  Some artists may charge more or less based on their own output of work, cost of living, and the client’s budget.

    If you’re still unsure how much your skills are worth, research what other industry professionals and independent artists are asking.  Compare work of similar quality and skill level to determine if you are charging too little or too much.


    Hourly Rates

    $0-10 an hour: Not recommended. Most professionals strongly discourage working for bottom rates that undercut the trade.

    $15-20 an hour: For beginner artists with little or some experience

    $25-35 an hour: For more experienced artists with 3-6 years experience

    $50 or higher per hour: For industry veterans and professionals with lots of experience, high quality portfolios, and client references


    Payment Types and Ownership Rights

    Flat Rates vs. Hourly Pay- Some artists prefer hourly pay since it guarantees fair compensation for the amount of work done.  Initial cost estimates may end up being too low and end up taking a lot more time to complete, which generally isn’t a good thing for the artist or the client.

    However, flat rates can be advantageous to the artist if a client offers a one time payment upon completion.  The idea is that most clients don’t care how many hours it takes to make what they ask for, as long as they are happy with the end product.  If an artist creates something in a few hours that the client really likes, the payoff is greater than if they had charged by hour.

    Installment Payments- Installment payments can be used as extra insurance that a client won’t bail on the artist without paying them after going through a lot of work.  Payment can be sent up front or upon delivery of certain milestones.

    Revenue Share- It is generally advisable to avoid any long-term deals that offer revenue share, product percentage cuts, or partial ownership instead of guaranteed payment.   Many startup projects fail, which will result in a lot of work being done for nothing.

    Intellectual Property

    Royalties- In some cases where a client commissions work that will be reproduced and sold for profit, the artist should negotiate for a percentage of the sales earnings. Major distributors generally take a large cut. On average, around 6-10% of the total gross plus an advance flat fee payment is considered a fair deal. The larger the quantity of products sold, the lower the royalty percentage will be unless you are a famous artist whose brand sells on name recognition.

    Before signing any contracts, always conduct research on similar types of product being sold to determine if you are being fairly compensated.

    Creator Rights– Many employers and studios require designers to sign a contract that gives away the distribution rights to their work. Be very cautious about signing away control over your intellectual property and work. Once it’s gone, you can’t get it back without a lawsuit. In general, if a payment or monetary transaction is accepted, then full ownership rights pass to the client. Terms can be renegotiated after the fact, but the client has no legal obligation to grant any favors.

    Patents, Trademarks, and Copyrighted Material– Legal licenses ensure greater protection for creators. In most cases, the original author is automatically granted protections for intellectual property, so it is not always necessary to purchase a copyright license. It is important to be aware of the terminology, especially when selling products or signing contracts.

    Expenses

    Other factors to consider when determining pricing are the materials costs, software license fees, the degree of difficulty, deadlines, how long the project will take, and how much you like the client. Taxes might also factor into online transactions.

    Online Taxes- Online commissions usually require paying though secure money transfer services like PayPal.  Online vendors and freelancing networks typically take a 3-15% cut of the total commission.  Shipping taxes may also be a factor in certain cases.

    Self- Employment Tax- Freelancers who earn all of their income from commissions still have to pay Federal taxes.  Luckily self-employed individuals can write off tax exemptions for certain workplace-related expenses and insurance.


    Clients

    Contracts- It is recommended to always create a contract outlining the arrangement for delivery conditions and payment.  Hopefully both parties will honor their part of the agreement, but bad deals sometimes happen.  A client might not want to pay as much as they said they would, or they might disappear without paying anything at all.  Unless the artist is screwed out of months of work, a non-paying client typically isn’t worth incurring negative reviews or the expenses of going to court.

    Keeping time-stamped copies of emails can also be used as legal documentation.

    Red Flags- Unfortunately, it is nearly impossible to predict if a job will turn into a nightmare just from an initial inquiry.  By the time you realize you shouldn’t have agreed to the job, it’s too late.  If caught in a bad situation that keeps dragging on and costing time or money, try to cut your losses as best as you can and move on.  Contact the client and attempt to politely explain what isn’t working out.  It’s awkward and not much fun, but it beats prolonged misery.

    Communication- Clear communication is the key to having a positive experience with clients.  The simple act of responding to emails goes a long way towards customer satisfaction.

    Revisions- Some artists will offer a limited number of free revisions, but many professionals charge their standard rate for every adjustment requested.  Some clients ask for more extensive revisions than others, so consider setting limits in the contract conditions.  If a client is over-controlling and not happy with any results the artist sends for approval, it can end up wasting much of the artist’s time.

    Express Delivery- When clients want jobs done quickly with very little notice, it is a common practice to raise the rate.

    Invoice- An invoice is a categorized bill sent to the client


    Budget

    Offer pricing options- Pricing options help determine how much the client is willing to spend.  Most clients prefer to save costs by going for the cheapest or middle option, while some will pay top dollar for the highest quality.

    Negotiating- A common pitfall is to announce your rates before determining the client’s budget.  If you offer to work for a lower rate than usual just to be accommodating, some clients will take advantage of that to pay far less than what they are capable of spending.

    Some clients can afford to pay more than others.  However, just because a client has more money doesn’t necessarily they will be better to work with.  Clients with smaller budgets might have more interesting projects despite lower pay.

     

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