Once you start actively participating in the gig economy, you will be faced with a challenge wrapped in real-world consequences: properly valuing your efforts. Attaching a price tag to something is pretty easy but ensuring that it is also a fair and accurate price is the true mission.
Like so many things in the gig life, it will depend a lot on what you are doing. Yet there are going to be some universal truths that will guide you well, if you are struggling in how to properly value your efforts.
Look at the Rest
The easiest way to get a handle on current market prices, is to look at your competition. It will not matter what kind of service or product you are offering: there is going to be similar stuff out there in the marketplace.
Have a good look around but do be sure you are seeing it clearly. There are nuances and shades/colors to everything, so make sure you are comparing apples to apples.
For instance, quality counts. If you are selling antiques or secondhand items, you want to be sure you are thinking the right way about your products. Mid-century modern is not the same as Victorian, so a specialty in either is not necessarily the same thing. There may not be the same earning potential or opportunity for both.
Likewise, mowing yards is going to be a bit different than operating a full–service landscaping operation. Not a judgement call here, but more a reminder to see it clearly when you scout the competition, so you are gathering an accurate imprint of comparable costs.
Know that once you have an idea of normal costs in your zone, there is going to be a balance of three things to reach your best price:
- The price YOU want to charge;
- The price THEY all tend to charge in your industry;
- The price a client is TRULY willing to pay.
It could matter where you live, especially if you are providing localized services. For instance, plumbing in New York City would have a different rate of pay and experience level associated with it than being a plumber in a small, rural township. Some industries and services are less affected by space this way, such as computer programming, graphic design or other related skills that can be manipulated online.
It could also matter how competitive your niche is. You may be a copywriter wanting to charge $180 a page, but the going rate is closer to $120…so you can stay true to your wants, or you can flex to meet the market pricing. It could be the difference between working, and not.
This Ain’t Breakfast: Avoid the Waffles
Though clients will help you determine your pricing, they should not be allowed to tell you what you’ll be charging. It is mutual, at best, but it is ultimately under your control.
Of course, pricing yourself too high will prevent you from working. Go too low, and you will quickly go out of business anyway. You need the pricing that is juuuust right.
A word of warning however: you don’t want to “chase” market value. It is better to have a firm understanding of your honest place in the market, and to price with confidence. Though true, you can come down from an original price and often land a deal, consider what that means.
If you tell a client you want $750 for some drywall work, and they counter with $500 which you accept, you are confirming that there was $250 of pure profit in the original price. It might land you the job, but it also makes the client think you are padding your estimates. Standing firm would suggest instead, that you are already at your bare-bones minimum.
I would tend to not flex down to get more work, because that will create doubt in the way you determined the original value of your offer. Set a fair price and stay there. Be willing to walk.
Likewise, shifting your pricing often is not sending the message that you understand your market position. This is not to say you shouldn’t periodically look at your pricing with a willingness to adjust and ensure it fits, but more that you should always stand confidently with your pricing. Don’t be wishy-washy.
In the end, pricing your offers accurately is a never–ending part of doing business. It does get easier in time, but it is something that you should be ready to attack at every step of your professional journey. Don’t be shy yet don’t be greedy: you need to find balance.