Are You That Desperate?

Profile picture of the author Thomas Michal by Thomas Michal Posted: 04/25/2012
OK I don't mean to rant here, but I seriously want to know why people these days insist on slashing their fees to slave wages just to gain some crappy work.

Seriously are you that desperate to make a buck?

I currently own a new media agency in Minneapolis,MN and I will not budge on my prices, PERIOD. If that means I lose a deal so be it. You know why? Because my services are worth what I charge.

I feel that by (desperately) undercutting your fees to gain some business you are not only damaging YOUR reputation and long term business, but the ENTIRE industry as a whole.

Honestly, fivver gigs are not a business model. So do yourself and your entire industry a favor and charge what you're worth and have confidence in your ability to provide for these people.

It doesn't matter if you are a designer, developer, seo, consultant or whatever YOU ARE WORTH MORE THAN $5 PER HOUR!

Why if your competition is charging $999 would you do it for $299? You're leaving so much money on the table and degrading the service industry and ultimately driving down the profitability within it.

You'll never see me walk up to contractors and say you guys go build my house. Then, if I like it I'll pay you... No, I'll pay a solid price for solid work just like my clients DO and your customers/clients should be doing!

You deserve it.

That's all.
#desperate

  • Profile picture of the author HelpingYouBeAnExpert
    HelpingYouBeAnExpert
    That is a really good question. I'm not sure to be honest. I think people probably have multiple reasons one might be value others might be they think they will sell more. I'm sure there are tons of them.
  • Profile picture of the author 0oo0
    0oo0
    I think it might be the value thing to cuz if you go to a big agency for a logo it's like $2000 but you can get one online for $20

    personally i'd want the 2000 tho, ha
  • Profile picture of the author samuraig
    samuraig
    Great question! It's the low price points that scoop up a part of the market that can't afford your prices. You have nothing to worry about because those people aren't your customers anyway and you wouldn't want them if they don't value your work enough to pay your price points. Right?
  • Profile picture of the author Thomas Michal
    Thomas Michal
    Originally Posted by samuraig View Post
    Great question! It's the low price points that scoop up a part of the market that can't afford your prices. You have nothing to worry about because those people aren't your customers anyway and you wouldn't want them if they don't value your work enough to pay your price points. Right?
    It's not just a low price point thing. I don't have a Package 1, 2 and 3. I base price off of the work needed to be done and business goals.

    E.G: To rank a divorce attorney in New York,NY would be more work, which would end up costing more than to rank a divorce attorney in Sleepy Eye,MN.
  • Profile picture of the author retsced
    retsced
    I have to agree with you on that one, however, most of the stuff listed on fiverr is not even worth $5
  • Profile picture of the author Londonista
    Londonista
    As a buyer I pay what I can afford - no more, but also no less. We all know you get what you pay for....
  • Profile picture of the author msu
    msu
    There will always be people willing to work for $5, as there will always be people who don't see what is wrong with paying someone that rate.

    It's sad but I don't think it harms the industry, it's just the low end of it and most people as that.
  • Profile picture of the author Bill Farnham
    Bill Farnham
    The part of the equation that isn't being addressed here is the global nature of what you see here.

    A person in the US sees $5 for an hours worth of work as demeaning while someone on the other side of the Pacific sees that as a living wage.

    The market here is no way indicative of markets as a whole. The apparent race to the bottom is actually a race to see who can competitively capture a segement of a given market. And given the uneven playing field it's no surprise those who live in countries where lower wages also provide better standards of living than those in high-overhead countries welcome the challenge.

    Once something becomes a commodity business naturally gravitates toward the lowest bidder. And if that business is also an 'entry level' type of business that can be conducted on a global scale it's only natural that it seeks its' own level.

    Welcome to the twenty-first century...

    ~Bill
  • Profile picture of the author fin
    fin
    Just get out and mix with the "big guys" where they let their hair down and watch strippers after work.

    Get "friendly" with them, no pitch, and you'll be the guy they call.
  • Profile picture of the author Kenwerd
    Kenwerd
    I think a lot of people are willing to do whatever it takes to make money with their services. Only instead of better positioning or offering a better service, they decide to cut prices. It's the wrong move but to a lot of people it makes a lot of sense.
  • Profile picture of the author angela99
    angela99
    People charge what they charge. Why worry about it?

    I'm a writer, so it used to annoy the heck out of me that otherwise competent writers valued their services so low that they charged $10 an hour.

    BUT... A writer who charges low rates has a reason for that. Sooner or later they come to their senses and start acting like professionals.

    Or maybe they don't, and they do something else.

    Either way, you can't stop a race to the bottom in any industry.

    My view is that people do what they want. They have their reasons, and it's none of my business what those reasons are.

    That said, when someone comes to me (and they do), and tells me that they want to "convert" their Fiverr buyers to real clients who pay real rates, I tell them that that's not possible. Yes, some Fiverr clients will pay well once they get to know you. Most won't. They're on Fiverr because $5 is all they can afford, or will pay.

    Bill, I agree with you. I have set rates too, and have no need to change that. I can cherry pick clients. But I'm in a better position than someone who's new, and has no contacts, and no experience. So I'm the last person to judge others and tell them what they should do.

    Sooner or later the low chargers realize that the clients they attract are more trouble than they're worth. They finally understand that GOOD clients know the value of what they want, and are prepared to pay for it.

    In short Bill, some ARE that desperate. Others are con artists... Nothing we can do about it. It's just business and life.

    Cheers

    Angela
  • Profile picture of the author JEasy
    JEasy
    Originally Posted by Thomas Michal View Post
    OK I don't mean to rant here, but I seriously want to know why people these days insist on slashing their fees to slave wages just to gain some crappy work.

    Seriously are you that desperate to make a buck?

    I currently own a new media agency in Minneapolis,MN and I will not budge on my prices, PERIOD. If that means I lose a deal so be it. You know why? Because my services are worth what I charge.

    I feel that by (desperately) undercutting your fees to gain some business you are not only damaging YOUR reputation and long term business, but the ENTIRE industry as a whole.

    Honestly, fivver gigs are not a business model. So do yourself and your entire industry a favor and charge what you're worth and have confidence in your ability to provide for these people.

    It doesn't matter if you are a designer, developer, seo, consultant or whatever YOU ARE WORTH MORE THAN $5 PER HOUR!

    Why if your competition is charging $999 would you do it for $299? You're leaving so much money on the table and degrading the service industry and ultimately driving down the profitability within it.

    You'll never see me walk up to contractors and say you guys go build my house. Then, if I like it I'll pay you... No, I'll pay a solid price for solid work just like my clients DO and your customers/clients should be doing!

    You deserve it.

    That's all.
    You can thank all the folks who are more than willing to pay those fees to save a buck. Most of the people charging those prices are from other countries and can live pretty well on the rates if they have a decent client base. The American small business owner/internet marketer eats it up. I feel bad for service providers honestly.
  • Profile picture of the author Benjamin Ehinger
    Benjamin Ehinger
    I agree 100%. I see it all the time in the content creation business and too many writers don't have the confidence to charge more than a few pennies for an article. I have tried a number of cheap services over the last few years and they are HORRIBLE. Those that are not willing to pay what someone is worth get low quality, but most of those clients probably don't know how to use the content to make money from it either.

    Benjamin
  • Profile picture of the author Nixgan
    Nixgan
    People still go for quality over quantity nowadays, as long as you are good there is no reason lowering yourself to the standard of others. Just hang on and march on, that's what I think.
  • Profile picture of the author owenlee
    owenlee
    that is the difference between visiting a family doctor or a specialist...lol..

    Most price low is to draw customer so that they can upsell them in the future...
  • Profile picture of the author danr62
    danr62
    This is exactly what I've been feeling all week.

    What people don't realize that a Wal-Mart pricing strategy doesn't work well for service providers.

    Sure, it might work for people brokering those services and taking a cut, but then they have a high turnover rate to deal with.
  • Profile picture of the author d17
    d17
    Another instance is the ugly neo-liberal trend of crowdsourcing, when a thousand people spend time, effort, and carry all the risk, but only one gets paid, if even. Sad times.
  • Profile picture of the author Exel
    Exel
    Many times we do not value our work as much as we should, and many times other
    people value it more than we do.

    Everybody should know their worth and not be afraid to state it with confidence.
  • Profile picture of the author SteveJohnson
    SteveJohnson
    I saw this often when I owned a painting company. The weekend warriors, the illegals, the desperate - all of them helped keep down the value of production painting. Lasting value was of no concern to the contractor, as long as the product lasted beyond the warranty period.

    I didn't lower my prices either, I actually raised them. I just went after a more lucrative market and let the bottom-feeders feed on the bottom. We did stuff that other people didn't, wouldn't, or couldn't do.

    Believe it or not, customers can tell the difference between a professional and a wannabe. Your job is to find the customers that NEED the professional and leave the others to the bottom-feeders.
  • Profile picture of the author celente
    celente
    Originally Posted by retsced View Post
    I have to agree with you on that one, however, most of the stuff listed on fiverr is not even worth $5
    I disagree with this, and from your statement you have been burnt on fiverr.....but do not worry I have too been burnt on fiverr more than a few times.

    But just know there really are some good gigs, and people that will help you and your business. Once you find these people you use their gigs again and again. That has worked for us.

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