The Art of Pricing Your Work
The art of pricing your work isn’t a walk in the park. It’s one of the most difficult aspects of running a design business. How much should your designs cost?
There isn’t a clear and precise answer to that question, every situation, commission and client will be more or less unique.
It will be a trial and error thing; Jobs done for way too little money vs the effort and time you spent on it and quotes too high to get the client.
But for every job, you’ll be a bit more experienced in this and know what to do. This winding road will also teach you a lot about what you’re worth and what type of clients you want to work with.
But aren’t there any guidelines for pricing your designs? Yes, there is, and this is how I reason when I define my prices:
Answering the initial request
So a company has contacted you and is interested in one of your existing designs. Yay! Congratulations!
Now let’s do a worst case scenario, and this type of situation has happened quite often to me.
They want to know how much it costs. That’s it. No brief, or any description of what they want to use the design for, or how. Sometimes I’ve even gotten requests where there is no information about the company either. Not even a website reference.
To be honest, that type of request usually implies that it’s not a very serious request, or a serious company. But it can also be that they are just not used to the same level of communication that I am.
In cases like this I’d kindly ask them to tell me a bit about who they are, their company, what they do, provide you with their website URL so you can learn more about them. And also, of course, ask them to tell you about the project or product they need your design for.
If they do tell you about this, either in the initial mail or when answering your response - good. But it may still not be enough to be able to give them a price quote. To do that we have to know the circumstances of what they need and want to use your design for.
The basic variables of a design job
My suggestion is to start your answering message something like:
Thank you for your request/mail/message/contacting me. This sounds really exciting! To be able to know how I can help you and your project in the best possible way I’d like to ask you some additional questions:”
This will show them that you’re service minded and working with you will be smooth and easy.
Depending on what information and facts they have provided already for the project here are some additional questions you need answers to:
“What type of product or project do you need a (pattern)design for?”
“How many product types or categories are you planning to use the design for?”
“Here will the product/products be marketed"?”
“Do you need different versions (scales or colorways)?
“How many units per product will you print/use the design on?”
“Do you want to license the design for a limited period or buy the exclusive rights?”
“If licensing for a period, for how long do you want to use it?”
A good thing to consider first is if you’re willing to sell the usage rights to your design outright. Doing so you will not be able to license it to any other company. Also, do you want to license your work based on provision (a sum for every sold unit), a fixed fee, or a combination of both?
Also, decide if it’s important to you that your name is connected to the design or not. For example, in the terms of your collaboration you can state that they have to include your name as the designer in all communication of the design, where possible. This is something that you can discuss in a coming step of the negotiation. And if you sell or license your work yourself vs via a pattern bank, I definitely recommend to have this as a non negotiable term. Always demand that your name is connected to your design.
When you have the answers to all this you can calculate a price.
Defining your price
When you set your prices in the beginning of your pattern design career there is one really important advice I want to give you:
Don’t value yourself and your work low.
Many startups reason like this:
“I’m just starting out, I don’t have much experience so my designs can’t be worth as much as someone who’s done this for a while.”
“Getting this commission is so important for my portfolio and the exposure it will give me is so valuable, that I’m willing to set a really low price to secure that they will buy.”
Ok, I get that, and I’ve done it too. And in the beginning it’s great to get the experience and exposure that comes with each collaboration. But then it’s not really about the money is it? So you could do it for free too?
A couple of hundred dollars/Euros or even less, doesn’t make much difference in your pocket, really. It’s a trip to the grocery store…
This is what you can do if you’re afraid to scare them off with a too high price:
Ask them if they have a budget for the design.
Principally this is not a very good route to go, because they will always tell you the lower end of their budget, perhaps even try to bid below that.
And the universal rule in price negotiations is that the first bidder will win, or at least be closer to the final bid than the counterpart’s. But this can be a way to learn and gather intelligence for coming negotiations. And if landing the job is more important than the money to you, then this is a way to start at least.
But, with an addition.
When you’ve heard their budget/bid, you should do one of these three things:
- If their bid actually feels reasonable (it does happen), then you accept. (And what is reasonable I will touch on a bit later on).
- If their bid feels a bit low, but close to reasonable you should give a counter bid and say something like: “Well I had this in mind” and then add a symbolic sum that is perhaps 20% more than theirs.
- If their bid is shamelessly low there is no use for trying to negotiate the price to a reasonable level. Then I’d tell them something like this:
”This is a lot below my minimum price range, but I’m willing to give you a welcome offer.”
And then you can raise their bid 20% and throw into the deal some other terms and benefits, to compensate a bit. For example that you will get a number of the products printed with your designs as additional remuneration. The products you keep for reference, use for a photoshoot for your own channels and perhaps as giveaways during the launch to really ramp up the collaboration you did.
This way you let them know that you accept their bid, but that it’s an exception - a one time offer and if they want to work with you on coming projects the price will be different. But since you’ve been so nice about it and then later on will of course give them a great customer experience working with you on the project - they may be willing to pay more next time.
Because if you begin a collaboration with a company pricing your designs low, they will expect the same prices the next time as well. And raising your prices is not an easy task. The client will wonder why it’s more expensive the second time. You can, and should raise your prices a little bit every year though. Based on the general inflation. I’d raise it at least 10% each year.
And a very important point; setting low prices will damage the industry and chances for all us designers to get paid reasonably for the craft and quality we offer and the time we spend on it.
Dare to say no
So, either take the commission but as a first welcoming discount, or say no. There will be other opportunities, and you will find the right customer who values what you do properly. And it feels really good to have the integrity to stand up for the quality of your designs and all the hard work that lies behind it.
If you don’t want to work for free, if you don’t want to value your designs low, but still win those lower budget clients, here’s another route to go:
Set up a price ladder
There are ways to calculate what your price should be; an hourly rate, but it’s based on that you have clients and jobs coming in that more or less covers your schedule and the hours of the week that you can actually charge for. So let’s not go there, because I want this article to address the problems that we have in the beginning of our businesses, when we start taking on our first jobs and clients.
In the beginning, as a new freelance pattern designer, the commissions and client projects are most likely few. Perhaps as few as a couple a year, not even close to earning a normal monthly salary. But we all start somewhere, and let’s start it as good as we can, building our businesses right, from the start.
Every commission, project and client is unique, with its specific variables and circumstances. Some companies are big, with huge volumes and larger budgets for purchasing or licensing designs for their products. Others are small, perhaps a one-woman show like you, with a small budget and a very limited volume of products that they offer.
Some will want to have exclusive rights, some will want to pay a fixed fee, others will base it on provision to be payed monthly or quarterly.
Knowing this, and to make it easier for us and avoiding inventing the wheel each time we get an inquiry, we can set up a price list - a ladder that offers different ways to collaborate.
If a small business contacts you, with quite a small budget, a price ladder can offer them solutions to buy or license a pattern from you according to what they can pay. Perhaps they wanted to have a custom made design by you in three color ways, used for three different product categories and have the exclusive rights for ever and ever. When you give them your price, it turns out to be over their budget. With a price ladder you can give them alternatives for how they can still get a design by you, only with some limited terms.
For example; if they can consider to limit the time period, to say 2 years instead of forever, the price goes down. And if they can limit the number of colorways. And perhaps they can limit the amount of product categories? And if they can consider to do a licensing deal based on provision instead they won’t have to pay a large sum before they know how the product will sell, so lower risk for them. If it doesn’t sell well, no need to pay more. If it sells well, no problem to pay you more since they will have more revenue coming in as well.
A price ladder is actually a great service you can offer your clients, helping them tailor a solution based on their needs.
Defining your prices
When you decide on what prices you should have in you pricing ladder there are some variables you can use to value your designs:
Is it a simple or complex design?
The more complex it is, the more advanced, the more skills required, the more time it took you to create. In general. And should therefore be worth more than a simpler one. Don’t complicate it by setting to many levels here. Two or perhaps three is good. Simple, Complex.
Set your minimum price.
So, now comes the crucial part, the factor that will impact everything else. What’s the minimum remuneration you want for a design, no matter all the variables like complexity, exclusivity, time period and so on? On the bottom line, with the simplest conditions, what’s the minimum you want to charge for your work?
And be careful here. It shouldn’t be too low (according to the arguments I stated above), but not too high because when adding on the different steps of the ladder, the end price has to be reasonable too.
Ok, I don’t really want to be too stern about this and risk limiting you and your potential, or intimidate you, or put off anyone in the business. But I will stick my neck out here and give you a rough suggestion for what a reasonable minimum price for someone just starting off could be.
If you don’t have any prior experience or only created patterns for a short while I would set my minimum price to 3000 SEK (Swedish kronor). When I write this, it’s about 300 USD or 265 Euro. This is for your most simple design, one color way, for a limited time period. You’d have to include how many product types it should include, volume of units as well, but that’s difficult for me to state here.
But, if you’ve been doing this for a little while you should raise this sum to at least 5000 SEK / 500 USD / 440 Euro. But as I said, this is for a simple design.
For a complex design I’d start off with 5000 SEK / 500 USD / 440 Euro for a beginner and 8000 SEK / 800 USD / 710 Euro for someone who’s more experienced.
As a beginner you should step ut to level 2 after a year or two. Definitely.
Ok, with that long neck out here, I want to do a disclaimer: There will be situations where this won’t apply or work, so use this as inspiration and as some kind of direction when possible. Sometimes your gut feeling will tell you something different and for some people my suggestions will seem way too low. I’m definitely an advocate for reasonable pricing, but I also know about the difficulties and dilemmas pricing poses for a beginner.
Set the additions.
When you have decided on your minimum price you can start building your ladder. For example, for each additional colorway add 10-20% of the minimum price. Same for each year. Same for additional product types within a category.
If a company want to have usage rights for more than one product category: for example home textiles AND wallpaper, for each product category I’d add 50% of the basic sum. And then extra for additional colorways for each product category.
So this is basically how I’ve figured out how to price my designs. Having a price ladder, or price list defined and ready at my hands whenever I get an inquiry makes it much easer to give a potential client a reasonable quote and solution to their need. And saves me time, and makes me much more confident about my value and worth.
But, it still doesn’t make it easy, but a little bit easier at least.
I hope this was useful to you, gave you inspiration and some guidance to how to go about this for your own pattern design business.
I’d love to hear about how you reason on the topic and your method for pricing your work if you have one! So write me a comment if you feel like it.