I’m still struggling with pricing. How does one best calculate flat rates for commercial design or illustration work?
I don’t like the hourly rate thing. I just can’t seem to properly gauge the amount of time I put into a project. Especially if I’m working several projects at once. And even if I did actually clock myself while working solely on one project, this doesn’t account for the amount of time I spend thinking about the project and continuing the design process in my head even while doing other unrelated tasks (like folding socks, cooking dinner) so I feel that it is not fully representative of the amount of thought and effort put into a project as well.
Hourly rates also don’t account for the actual value of the project or its continued use over time as a representation of a brand or product. But it’s impossible to truly determine the full scope of the art’s value. It’s not exactly easy to quiz a business on their numbers nor is it always trustworthy as any numbers they provide could be inaccurate.
I’ve done some googling on pricing and price models but nothing feels especially helpful. I have a BFA and this subject was only slightly grazed upon in my classes leaving me feeling even less confident in my pricing. It feels too abstract. Is it really an arbitrary, anything goes kind of thing?
If you have any personal experiences that could be helpful or know of any good resources or online classes available for specifically this aspect of art marketing, please let me know.
I have bad news. Even if your pricing model does not work on hours spent. It has to account for hours ( or any other timespan) spent, at least in aggregate.
What do I mean by this? Ultimately it is all about covering your cost, cost of business and cost of living. So if you miscalculate this you will eventually lose out. Bad news here is that you may not notice for years, because you may be neglecting to calculate price of long term business cost (computers, software, education) and things like retirement and health insurance.
However, you may find that thinking in aggregate helps. As its often easier to answer the question: How much money do i need to live for a year / decade, with all my associated costs? So basically:
Cost of equipment (computers, studio space, car…) + Cost of consumables (paper, pens, ink, markers) + Cost of utilities (phone, internet, water, electricity…) + Cost of business services (Accountant, lawyer etc…) + Cost of your living expenses (rent/mortgage, food, drink, clothes…) + Cost of future costs (retirement, vacation, personal wealth growth…) + Costs of investments (new devices, training, sales collateral for your own business…) + Surprise expenses (car needs unexpected expensive repair, you are unable to work for a month) + some 10-15% extra for other uncertainties.
And then divide that by many days you plan to work over that time. This will give you a good estimate for your daily cost. Protip: its not 365 days per year.. more like 260-220 days (in Europe we work about 25 to 40 days less per year than in US). Also you won’t necessarily have work for every day so reserve a few days for internal business management days like self marketing and tax filing…
Then just estimate what time each type of work would take overall from your historical record. (but don’t double count, so if your doing two jobs and they take in total 7 days than other may be 4 and other 3) for a flat rate.
And yes this means where you live affects your price.
Anything above this calculation goes. If you haven’t done this calculation there is HIGH risk that you are being underpaid.
Source : Link , Question Author : royalclowncola , Answer Author : Glorfindel