If you’re trying out the gig economy on Fiverr, Upwork, Contra, or another top freelancing platform, you may wonder about how to set pricing as a freelancer. Your rate can determine how much business you’ll receive and how much you make, so it’s a significant business decision. In this blog, I’ll explain how I set my pricing as a new freelancer on Fiverr. Understanding Fiverr’s Pricing I started my freelancing journey on Fiverr, and so far, I’ve stuck with them. So, I’ll primarily be explaining my pricing rationale in the context of their structure. If you choose another site, your decisions may diverge slightly with their setup, but overall, the core of how to set your prices remains the same. Originally, Fiverr had a base price of just $5 (hence its name) when it launched in 2010. In 2013, however, it began allowing sellers to set prices for themselves. Usually, freelancers charge higher prices for more complex jobs, higher quality work, or tighter deadlines. As a contractor, you set your own rate on Fiverr, yet the ability to assign a dollar amount to your work is often puzzling for beginners. Conducting a Price Analysis Your pricing can determine whether you get your first client on a freelancing platform as pricing is one of the top factors influencing a purchase. To set your prices, conduct a price analysis. Here are the top two questions I used when setting my pricing as a freelancer. How does my experience compare to my peers' experience? When you’re first starting out, your experience (if you have any) won’t be initially evident. You’ll have to gain clients' trust through work with them, and if you’re new to a platform like Fiverr, then you’re likely missing one of the main factors that’ll give you credibility: reviews. So, keep in mind that reducing your pricing (at least in the beginning) can help entice clients who may not book a freelancer without a review otherwise. Consider these options: FREELANCER A Great profile - displays education, experience, etc. No reviews $5 FREELANCER B Great profile - displays education, experience, etc. 5 reviews $15 Freelancer B has the advantage with their reviews and their prices reflect it. However, Freelancer A is compensating for their lack of reviews with their pricing. Maybe, just maybe, a buyer will look at these two profiles and think, “You know what, it’s just $5. I’ll give Freelancer A a try.” I was once Freelancer A, and I got my first order after just 4 days. Someone took a chance on me, and I’m almost positive it was because I had a quality profile and low prices. I may not have had a lot of experience, but I had the skills to do the work, and I slowly gained ground once I got my first few reviews. Understanding your peers (your competition!) in the marketplace is one of the best ways to determine your pricing, even after you’ve become established. You want to make sure you understand what the market rate is. I recommend reviewing your pricing at least once a year, so you can stay on top of your competition and optimize your revenue. How am I going to measure the amount of time I spend on my work? Depending on what type of work you’re doing (writing, graphic design, etc.), you’ll need to decide how you’ll charge for your services. Some freelancers like to be paid by the hour while others prefer to be paid per project. The best way to describe the differences between measurement is time-based pricing, project-based pricing, and value-based pricing. Time-based pricing is the easiest of the three strategies. Freelancers tend to favor it as do many professional services. If you work for an hour, you invoice the client for an hour. The issue with this type of pricing is that you only earn as much as the hours you’ve got available. In other words, there’s a price ceiling, and the only way to earn more is to work more hours. Project-based pricing requires you to estimate the effort and time it’ll take you to achieve your client’s desired result. If a client agrees to your quote, then there are no unexpected surprises at the end of the day, and (in theory), both parties are happy. Additionally, if you’re efficient with your time, then you can earn higher than your “day” rate that you’d earn in time-based pricing. The downside of this method is that you need to be experienced enough to evaluate the scope of the project and provide someone a quote off of that number. Otherwise, you could end up working a lot more or scaring off a client with a figure too high. Value-based pricing is the third option, and it’s based on the idea that you’re charging the perceived value you’re providing for the client. Say you’re writing website content that’ll result in over $10,000 in sales for a client. That website content may not bring in very much revenue for you if you charge $100 for it. However, if you decide to charge a 10% fee based on that value, then you’re looking at a significant spike in your overall profits. Unfortunately, only highly experienced freelancers typ
