Thoughts on branding, design, writing and life by Kevin Potts. Established 2003.

Ethical Pricing

Unethical, low-browed pricing antics designed to take the client like a sideshow vendor at a circus is not the image we want to portray. In fact, it’s quite the opposite.

Before a person officially begins their freelancing career, there are several fundamental questions that need to be answered. At the very least, every designer/illustrator/developer needs to sit down and figure out how much they should charge.

Cameron Foote, author of the incredibly valuable Business Side of Creativity, devotes a chapter to calculating the exact hourly rate based on your expenses and projected growth. This is an excellent way to get a starting figure, but for me, it was always more of a “gut-thing.” When I started, it was $40/hour. For an entry-level freelancer struggling to get some clients and projects under his belt, it was a good starting point, but I have since upped my price appropriately.

But there is trend among freelancers that just annoys the shit out of me … specifically, routinely gutting clients for all they’ve got. When a novice asks, “What should I charge for this project?” a veteran should not say, “As much as you can get.” What kind of guidance is this? Unethical, low-browed pricing antics designed to take the client like a sideshow vendor at a circus is not the image we want to portray. In fact, it’s quite the opposite.

While Mr. Foote goes on about finding your ideal hourly rate, he makes one incredibly important point: he advises on charging the same amount across the board. Print design or web development, Fortune 500 or mom-and-pop, a steady rate will earn client respect and increase the chance of referrals.

Imagine you charge one client $2500 for a small website at a rate of $100/hour. The client is happy with your work and feels he got a straight deal; a week later, he tells a business buddy about you, and the new guy asks you for a proposal for a similar project. Smelling an easy kill, you quote $3125—the same time at a rate of $125. Not only will you never here from the new guy again, you’ll most likely lose your old client and any future referrals they may have brought you. Clients talk and shady freelancers are quickly blacklisted.

It’s very dismaying to see industry peers passing down such poor advice. After witnessing Billy Bussey’s tragically unprofessional talk at FlashForward in San Francisco, I have been making it a point to preach the ethical route.

My philosophy toward clients and prospects is simple—if you don’t like the price, don’t buy. I have irrevocably found that the stingiest clients are always the ones slowest to pay, and this no-nonsense policy discourages window shoppers and hagglers.

It’s tempting to mark up your prices for a new client. Believe me, I’ve gone down that path, and at the end of the day, a few extra dollars is not worth a discouraged client looking for a different vendor. On the other hand, it’s just as tempting to quote a new client a discounted price, which is equally detrimental long-term. Figure a price that is fair to all parties, and stick with it. (If you find the need to raise your rates, do it across the board and warn clients well in advance. But that’s another day’s topic.)

commentary + criticism


wrote the following on Thursday December 30, 2004

Excellent article, it’s good to see some integrity being practiced. I’m really interested in the topic you touched on, raising prices across the board. It’s tough to know the way to go about doing that. And also the timing to raise the rate, like waiting six months or a year from the start of the client relationship.

Anyway, if you want to write another article on this topic, I promise I’ll read it. :)

Keep up the great work.

Jim Amos

wrote the following on Thursday December 30, 2004

For the most part I agree with all this.

But what if you normally charge $40 an hour and all your clients are small business’ – then along comes a microsoft or some other corporate giant – you’re saying you would charge the same rate?

I think there might be a danger that in a situation like this the large company will feel that you’re under-pricing yourself and look elsewhere.

I don’t think revising your set-rate for different size companies is wrong, it makes perfect sense.

That way, I can work for a big company one week, then give some time to a much smaller company the next, and they can actually afford it. It’s not about taking advantage of a company’s budget, it’s about adjusting to meet it.

Aaron Egaas

wrote the following on Thursday December 30, 2004

I’m just a college student, but I produce work that is higher quality than I’ve seen “Professionals” produce at much higher rates. Every freelance project I do I struggle with my rate, I look at my parents working 40 hour a week jobs for less an hour than I’m charging for design work? I struggle with this because they “work” harder, but because web design is an “art” I get paid more? I don’t know, I guess I’m still confused what to charge clients.

Sam Sherwood

wrote the following on Thursday December 30, 2004

Aaron, your parents may work for less an hour, but you’re not taking into account all the benefits that come with working for someone else.

By working freelance, not as a student, one has myriad expenses to take into account, including electricity, space, insurance, software/hardware, etcetera. These all add up, which is why someone charging $100+ per hour isn’t surprising at all.

Couple this with the fact that a good portion of a freelancers time can be spent just drumming up new business, and you now have a situation where you’re not working 40 billable hours per week.

Great post, Kevin. These topics are definitely what should be discussed among designers today.

Eric Vitiello

wrote the following on Thursday December 30, 2004

Aaron—Sam is correct. When thinking about things like that, make sure you’re comparing apples to apples. If you’re charging clients $40 / hour, don’t compare that to the hourly wage your parents make. Compare it to the hourly amount that the company they work for charges. Your parents might be making $25/hour, but the company they work for is potentially charging $80/hour for that same work to cover overhead of all sorts. Not to mention Taxes, which a HUGE part of my hourly amount goes to.

Mark Shields

wrote the following on Thursday December 30, 2004

Thank you – excellent points from everyone. I have been doing freelance work for about nine months with 10 clients under my belt, and pricing was the biggest contention point for me. I started working very cheaply to get exposure and somewhat of a portfolio, and charging appropriately was a difficult transition, especially when I am still getting clients based on word-of-mouth referrals.

I think it is ethical to vary the pay scale based on client resources, but I think I do this in the opposite way that many new freelancers are tempted to do. I have my “standard” rate for established businesses, and then I lower my rate for non-for-profit organizations and startups. I am up front in discussing this “discount” with these groups, and it helps me in multiple ways. I gain experience, feel better about how I am charging, it has seemed to increase client loyalty, and it has helped me get referrals at the higher, standard rate. People respond to you when you “do good” in addition to doing well with your work. As long as you are careful not to be taken advantage of with the discount, you can keep the work profitable and help smaller clients at the same time.


wrote the following on Thursday December 30, 2004

These are all really great comments. I think the matter of charging is different for every designer—personally, I find it easier to charge one rate across the board, and this benefits me for two reasons.

1. I never have to go back through invoices to figure out how much I charged one client six months ago, or how much I should charge this one, and if this one was referred, or what the hell is going on.

2. My rate is very middle-of-the-road. While it’s not $200/hour agency rate, it’s also not Ted’s Discount Logo Design. This attracts a certain level of business. Generally, this includes small companies who do not have their own in-house designers and prosperous individuals who can afford better design. Because I work full-time as an in-house designer, and freelancing is a “side gig,” I find my life is infinitely easier when I have personal relationships with a person, not a corporate billing department. And while this may or may not have anything to do with what I just said, I find all of my clients are great at paying within the terms. In the last three years, I have had to get rough with only one client (who is no longer a client).

So maybe the issue is not “ethical” pricing, but “consistent” pricing. I just hate hearing this from designers: “I charge whatever I can get from the client.”

Calvin Lee

wrote the following on Thursday December 30, 2004

That is a great article and great responses.

I just started freelancing myself. It’s always hard for me, what to charge clients. I have been charging everyone $40 an hour or I just estimate on how long it will take me and give them a flat price.

I am really liking freelancing with all the freedoms. I hope the clients continue to roll in. I would really hate to work a 9-5 in-house design job again. :)


wrote the following on Thursday December 30, 2004

I am going to buy that book and have a good read of it. I have been having a great deal of trouble working out what to charge my clients so it sounds like it should definately help. I’ve been confused and I’ve often been looking at other design studios as a guideline, but this is probably an even worse practice then just taking all you can.


wrote the following on Sunday December 31, 2006

I think youre not understanding the market system youre in if youre not charging as much as you can for each client.
This doesnt mean you quote higher prices necessarily, if you think there may be an ongoing buisness relationship. But in effect you still want to charge as much as you think the client will pay.
it only gets unethical if you quote one price and come in waay above or try to hold a guys site hostage for more money.
but then again if youre happy getting less money for your work than what you could, youre clients will be more than happy to pay you less than you deserve :)