Dealing with the Profile Hourly Rate
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Many freelancing marketplace sites allow you to specify in your profile a minimum hourly rate. Some even insist on you choosing one. This number is shown to clients to help them understand how much you wish to be paid if they want to hire you. Potential customers are also typically able to do searches based on advertised rates, to allow them to find people whose hourly rates match their budgets and requirements.
In theory, the hourly rate is a simple way to tell clients what you expect. In practice, the hourly rate is much more complex, in terms of what it signals to clients, and the impact it has on both how many project invites you receive, and how your bids are interpreted. For this reason, I recommend thinking about the following issues before “picking a number”.
Ideally, you put in for the minimum hourly rate the lowest figure you’re willing to accept. So if you’d like to make $50 an hour but are willing to work for $40, then $40 should go in your profile. Then you would be hired for various rates ranging from $40 on up.
Unfortunately, clients have a tendency to read the word minimum as maximum. :) If you put $40 an hour as your minimum hourly rate, clients who see that will think “this person is going to cost me $40” and not “this person is going to cost me at least $40”.
The implications of this are obvious: it is hard to get work for an hourly rate higher than what you put in your profile. If you have $40 in there and you bid a project at $50, expect the client to ask why you didn’t bid at $40. There may well be good reasons for this, but the client is going to want an explanation. Saying “well, I usually would be fine with $40 but I think you’re willing to pay $50” will not go over well.
In contrast, if your profile says $40 and you bid $35, the client may be happier, thinking you are giving them “a deal”. Of course, if you go too much lower than what the profile says, they may get suspicious and wonder why you are bidding so much lower. As always, it’s a balancing act.
Some freelancers, especially new ones, put low rates in their profiles in an effort to attract clients. Even though they really want to make, say, $30 an hour, they’ll put $15 an hour into their hourly rate field, assuming this will get them more project invites and hires.
It probably will. But there are some significant dangers here.
First, if you do this, you need to ask yourself if you can really afford to work for the low rate you’ve put in. Some freelancers, especially ones overseas, can afford to work for a few bucks an hour. If you’re reading this guide, you probably cannot.
Second, it is very hard to convey to clients that you are a qualified professional when you have a very low profile rate. Just as you might be skeptical of ordering a $5 steak in a restaurant—wondering what exactly you’d be getting—serious clients can feel the same way about a profile listing a $5 minimum rate.
Third, you will get more invites and win more projects, but what sort of projects will they be? Are you really going to be successful over the long term by catering to “bottom feeder” clients who are only interested in hiring the cheapest person they can find? Probably not.
For all of these reasons, I never recommend putting in a low profile hourly rate. It’s certainly fine to put a low dollar figure in bids when you’re starting out, to build a client base and get feedback. Or even to have no hourly rate, in order to signal your flexibility on price. But I don’t think having a low number in your profile is a sound strategy.
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Last Site Update: February 1, 2012
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