Why Undercharging Is Killing Your Freelance Business

By Jamie McSloy / August 24, 2016
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Freelance Writers: Don’t Undercharge

A massive mistake that a lot of freelance writers make is that they criminally undercharge for their own services.

Sometimes I feel like I should charge more for my services (who doesn’t?) However, I’m nowhere close to undercharging to the extent some guys do.

Case in point: Today., I was browsing the internet and found an article by Robert. You can read it here.

I rarely read comments (outside of readers of this blog… you guys are great) and I certainly don’t reply. But I was tempted into it today. Check this out:

That’s someone offering 1500 words for $4 (Fiverr takes $1 for every $5 you earn.)

That’s ludicrous, and whilst this person might think that they’re “Giving someone an offer they can’t refuse,” it’s an entirely counter-productive strategy. I’ll explain why below, but here’s my reply to that comment:

“No offense, but this is crazy talk.
1500 words for $4 is going to put people off your work. If I saw a listing for 1500 words for $4, I’m automatically assuming it’s going to be spun content or terrible writing.

(Time Out: If you’re enjoying this article, then you should probably sign up to my mailing list, where I give out ideas and business tricks that I don’t share publicly. Click here, fill out your details and get yourself on the list! You won’t leave this page.

Now Back To The Regular Programming Schedule…)

1500 words shouldn’t take 2.5 hours anyway, but if it does, you shouldn’t be selling that for $4.

If you charge $5 (you’ll only get $4) for 500 words, you’re already making less than $0.01 per word. This should absolutely be the bottom amount you charge. When I started, I was charging $5 for 500 words, and the people I’d order from would say, “This is crazy. I assumed you were going to use spun content” and “I can’t believe the quality is this high for $5.”

It took me far too long to realise that I was an idiot. If you’re anywhere near a decent writer, you can charge a lot more. For Upwork, you need to do the terrible work to get the positive feedback, and you should constantly scale your pay up.

For Fiverr, you’re more limited. You can add optional extras (which you should as soon as you’ve worked out what people will pay extra for,) or you can cut down the time it takes you to write a 500 word article.

I did the above… and when I was getting most of my work from Fiverr, I nailed down the process so that brief research + writing each $5 article took me 6 minutes. I would chastise myself if I took more than ten minutes.

All you’re doing on Fiverr and Upwork is the following:

Provide a service people want.
Do it to a reasonably high quality.
Do it within the time frame.

If you can do those three things, that is an offer that clients can’t refuse, and it’s better than nearly everyone else on these sites.”

Regular readers of this blog will already be aware of all the things I mention above, but I don’t really venture out into the wider internet with these teachings.

Obviously I should.

You’ll Get Lumped In With Scammers, Spammers and Robots

If I saw a person offering 1500 words for $5 $4, there’s no way I’m going to click that button.

We’ve all heard the phrase, “If it sounds too good to be true, it probably is.”

That’s what 1500 words for $4 sounds like.

Either I give a writer the benefit of the doubt and think that they’re charging next to nothing because they 1. Don’t believe in their work, 2. Have no business sense or 3. They’re not a professional and they’ve accidentally lost their way onto a freelance site.

Or, I think that they’re using Indian outsourcing ala Tim Ferriss or worse yet, a spinning software.

After all, you can’t make a 1500 word article only take $4 worth of your time, can you?

The commenter said he was working for two and a half hours for that $4. Whilst I assume he’s telling the truth and its commendable that he’s willing to put in that work to start freelancing, people are going to assume he’s one of the above people.

Most likely, they’re going to assume that they’ll get 1500 words of spun content that’s barely legible.

If a client is happy with receiving that…

Bad Clients

In general, I love freelance writing.

In fact, I’m at the point where I’m 90% sure I’d be better off spending all my time developing my own products and copywriting for those. But I still love freelance writing because I get exposed to new ideas and businesses and I have to continually up my skills and learn new stuff.

That said, there’s one thing that deflates me when it comes to freelance writing. It’s not the occasional long hours. It’s not the fact I could make more money concentrating on other stuff. It’s not the fact that sometimes I’m paid to write about topics I’m not interested in.

That one thing is bad clients.

Bad clients will deflate you. They’ll make you want to quit. They’ll negatively mess with your psychology. Even if you’ve written for hundreds of clients, one idiot customer saying, “You don’t know what you’re doing!” will mess with your head. One scammer refusing to pay you after you’ve delivered the work they’ve asked for will make you want to throw your computer out of the window and never write again.

I’m not bringing this up for therapy.

You might think that the more you charge, the pickier the customers get.

I’ve found that the exact opposite is true. Sure, when you’re charging more you have to make sure to dot the i’s and cross the t’s, but generally, high-paying customers are a lot more laid back than low-paying ones.

I have a guy who hires me pretty much every month. If I say to him, “This month it’ll cost more because there’s more research” he’ll say, “Fine.” When I’ve told him that I need an extra few days to finish writing something up, he’s sent back things like, “That’s ok. In fact, take an extra few days if you want. There’s no hurry.”

Ironically, he pays more and has a trickier service than some people I’ve had a ton of trouble with.

  • People who’ve expected me to revise and rewrite a $10 article five times.
  • People who want “sample articles” with a certain keyword density and word count before they buy. (I’m not falling for that one!)
  • People who want same day delivery at 9 p.m. on a Sunday night – without paying more.

These people are always the lowest-budget clients. Also, when I’ve gotten scammed by people not paying, it’s always been people with a low budget.

Back to the topic at hand: If you criminally undercharge for your service, you’re inviting these people into your life and your business.

You don’t want bad clients, because they’ll ruin your business, and even if they don’t, they’ll ruin your morale anyway.

Final Thoughts

Undercharging for a service is bad for your business. More importantly, it’s bad for your morale – which isn’t just bad for your business, but it affects your self-worth and probably your health and relationships too.

Whilst it seems logical to charge less to attract business, you’re rarely attracting the same business. Instead, you’re attracting people with no money and no intention to pay you, as opposed to the clients who are going to appreciate you.

Added to that, undercharging is counter-productive, because you’re undervaluing yourself. If you don’t value your service, then those clients that you want aren’t going to put any value on your service; they’ll assume you’re the same low-quality service as the clients you’re attracting.

It’s better to charge more and improve your service to be worth the increased charge than it is to create a budget service and attract low-quality customers.

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