Howdy Do It came from “how do you do It,” the question Ellie & Margot found themselves asking about their freelance lifestyles, and so Howdy Do It was born, a weekly column about the things we do to keep ourselves organized, inspired and on track. Ellie will be here each Monday, and Margot will be over on Mint at the same time.

If you have any questions for Margot or Ellie, you can ask them on formspring.
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One of the most frequent questions I get asked is how one should go about pricing their work. I’m going to start this off with a big fat disclaimer: I am not an expert on this. I have only been freelancing for a couple of years, and have only been doing it full time for 6 months. I am constantly thinking about my pricing, evaluating it, and nudging things around. There is also a very informative article on Design Sponge, which is more scientific and expert-like than what you’re going to hear from me.

I do two different kinds of design work, and I price them differently. The first is my freelance design work (non-wedding). To come up with an hourly rate, I did not use the handy, informative
FreelanceSwitch calculator I found via the d*s article. I just asked around. I asked probably 6-8 freelancers what their hourly rate was, and that combined with working in a design firm who occasionally hired freelancers, gave me a good idea of the range. In my area, it seemed to be between $35-$75/hour. A big note: I live in an area that is pretty affordable, and so you need to ask freelancers in your region to get an accurate idea for hourly rates. I guarantee there are 0 freelancers in New York City charging $35/hour. You never want to be the cheapest freelancer, because if you underprice your work, people will undervalue your work. You’re also effectively telling clients “design is cheap!” So, when figuring out where you land on the scale, you want to think about your experience, skill level, cost of living, and your expenses. Your expenses will include rent, insurance, your computer, software, office supplies, advertising, etc. You’ll need to remember that while $75/hour (or whatever) may sound like a number you can get rich off of, you can’t bill 40 hours of every week because you have administrative work, marketing efforts, etc.

Another tip: If you’re doing print design, you’re going to be managing the printing of your project. You can markup printing costs by 10-20% to cover the time print management takes and the expertise you have in print management. Remember that if you’re a designer and frequently use certain printing companies, they’re probably giving you print quotes that are much lower than what they give the average guy off the street.

The second kind of design work I do is invitation design. Pricing an actual product seems a lot more straight-forward to me than when you’re pricing something intangible like design hours for a website. So, the first thing you’ll need to do is figure out your materials cost. If paper is $35 for 250 sheets and you can fit 2 invitations per page, that’s $.07 cents per invitation for paper. Figure out your materials cost for everything—envelopes, printing cost/ink, cutting, etc. You’ll also need to figure out your assembly cost. Say you’re putting in envelope liners, and you used that handy rate calculator to find out that your break-even hourly rate is $25/hour. (Since assembling envelope liners takes very little skill, this is a good place to put your break-even rate to work). Say you need to do 100 envelope liners, and that will take you one hour. $25 divided by 100 liners is $.25. Alright. So now you’ve added everything up and you should have a materials cost, and let’s say it comes out to $1.75 per invitation suite.

The next step is to do some market research. Find companies who offer products similar to yours, keeping in mind whether you’re talking about custom or non-custom work, and the type of printing method used. Let’s say the going rate for invitations like yours is $6/suite. That means if you stick with that price scale, then after cost you’ll have $4.25. Finally, you need to figure out if that’s something you can live on, which of course depends not on that $4.25 figure but how many invitations you can actually sell per month, and I can’t help you there.

Someone on formspring yesterday asked, “How can I simplify & structure custom invitation pricing? With all the various elements, paper type, envelope type & size, etc, it takes me forever to price out an invite. How do you factor in design time?” I think if you’ve calculated your basic invitation cost using the steps above, calculating the extras should be fairly easy. Let’s say you spend $.04 cents per basic white envelope, and $.14 cents per fancy envelope. That just brought your cost up by $.10, plus the extra time for a special order. So, I’d come up with a standard rate sheet that said something basic invitation suites (white envelope) are $6 each and invitation suites with fancy envelopes are $6.20 each.

To keep things simple, I’d try not to offer a million options to your customers. Find a vendor who sells fancy envelopes at a good price, and stick with them. So if a customer wants to know what colors your fancy envelopes come in, don’t say “what color would you like?” Show them the list of colors that are available with your vendor. That way, you have a set price for plain envelopes and a set price for fancy envelopes, and you don’t have to change that price if they want a certain shade of blush pink. Keep things simple for both you and your customer.

For design time, you need to refer to the hourly design rate I talked about above. If it takes you about 8 hours to design a custom invitation and your design rate is $50/hour, then maybe you add a flat $400 custom fee on to the “pre-designed” invitation price of $6/suite. Again, I don’t think there is a single right answer for how you price completely custom work. It’s going to depend on whether people will pay that flat custom fee at the rate of $50/hour, or if it makes more sense to just bump up your per suite price by a dollar or two. If there’s anyone out there who has an opinion on this, I would love to hear it!

Another thing to think about when coming up with a rate sheet for invitations is whether you want to charge the same “per suite” price for 50 invitations as 300. Keep in mind that you will spend less on materials with the smaller order, but you’ll spend as much time on the client who needs 50 invitations as the client who needs 300.

All that said, it’s not always about the formula and research. As Meg Mateo Ilasco says in her book Craft, Inc., “it’s about creating a perceived value for your goods. If your [product] is as special as you think it is, it should have a price tag to match.”

{images by elizabeth sarah}

To read Margot’s Howdy Do It posts, click here.

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