Are You That Desperate?

by Thomas Michal 39 replies
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.
#main internet marketing discussion forum #desperate
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  • 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.
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  • Profile picture of the author 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
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  • Profile picture of the author 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?
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    • Profile picture of the author 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.
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    • Profile picture of the author retsced
      I have to agree with you on that one, however, most of the stuff listed on fiverr is not even worth $5
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      • Profile picture of the author 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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  • Profile picture of the author 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....
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  • Profile picture of the author 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.
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    • Profile picture of the author 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
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  • Profile picture of the author 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.
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  • Profile picture of the author 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
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  • Profile picture of the author 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.
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  • Profile picture of the author 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
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  • Profile picture of the author 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.
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  • Profile picture of the author 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...
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  • Profile picture of the author 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.
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  • Profile picture of the author 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.
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  • Profile picture of the author 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.
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  • Profile picture of the author 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.
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  • Profile picture of the author EvcRo
    I have some bad news for you ....

    People in the west, somehow, think that they deserve 30$/hour for a job that a guy in India/Romania/whatever will do better, for 5$/hour

    This happy times are closing to an end (see western world debt problems - high life standard without doing anything better than the rest of the world - , job losses because in other place,country the job will done cheaper, with less costs, etc ).

    Globalization means that everything that can be done anywhere with same effect will cost 5$ not 50$.

    Ofcourse, things that can be done locally only will still cost how much local people charge.

    So instead of being angry at 5$ fiverr gigs think how you can compete and what services you can offer that no outsourcer can.
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    • Profile picture of the author 0oo0
      Originally Posted by EvcRo View Post

      I have some bad news for you ....

      People in the west, somehow, think that they deserve 30$/hour for a job that a guy in India/Romania/whatever will do better, for 5$/hour

      This happy times are closing to an end (see western world debt problems - high life standard without doing anything better than the rest of the world - , job losses because in other place,country the job will done cheaper, with less costs, etc ).

      Globalization means that everything that can be done anywhere with same effect will cost 5$ not 50$.

      Ofcourse, things that can be done locally only will still cost how much local people charge.

      So instead of being angry at 5$ fiverr gigs think how you can compete and what services you can offer that no outsourcer can.

      Most of the time they cant especially when it come to content creation, writing articles and blogging and using proper english. So sure I suppose anyone can submit backlinks if you want to do that all day
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      • Profile picture of the author gtrujillo
        To remain a free man, I will add bonuses but will under no circumstances lower the cost of my services. The garage sale mentality of some people amazes me.
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        • Profile picture of the author David Sneen
          People's perception of your services will be influenced by what you charge. If you are willing to do something cheaply, people will think you are a cheap worker. If you charge more, people will think you are a high end worker...and pay you if they can afford it.

          Those that are undercutting the market are doing so because they don't believe they can get work at the market price.

          So, continue to charge what you are worth, hold your head high; and people will perceive of you as a high end, competent worker. Don't worry about the cut rate worker...he is irrelevant--by telling people you are top-notch [pricing] people will perceive you that way.
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    • Profile picture of the author JEasy
      Originally Posted by EvcRo View Post

      I have some bad news for you ....

      People in the west, somehow, think that they deserve 30$/hour for a job that a guy in India/Romania/whatever will do better, for 5$/hour

      This happy times are closing to an end (see western world debt problems - high life standard without doing anything better than the rest of the world - , job losses because in other place,country the job will done cheaper, with less costs, etc ).

      Globalization means that everything that can be done anywhere with same effect will cost 5$ not 50$.

      Ofcourse, things that can be done locally only will still cost how much local people charge.

      So instead of being angry at 5$ fiverr gigs think how you can compete and what services you can offer that no outsourcer can.
      Being as though I live in America, I'm sorry but the cost of living isn't going down around here. If folks who are buying into "Globalization" were smart, they'd charge the rate that people in the states can command (if they can do a good enough job that is). Think of how much more money they WOULD have. Undercutting hard working people is selfish and a joke.
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  • Profile picture of the author MN Warrior
    yeah some people just don't realize that by having low rates you'll be judged as "not as good" without them taking a further look.

    people with low fees are the less confident ones I'm sure...
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  • Profile picture of the author nolokimes
    Yeah, and why don't we just all buy our milk from the local farm and the textiles that are made locally aren't those people working hard? I buy the products that offer the highest quality for the cheapest price if you cannot compete... why not doing something else. Add more value to your products than a fiverr job would and people will purchase your product. Or is this the official price fixing thread? What was the business name again
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    • Profile picture of the author 0oo0
      Originally Posted by nolokimes View Post

      Yeah, and why don't we just all buy our milk from the local farm
      Because not everyone lives in the middle of nowhere by farms... I don't think I have a farm within 100 miles of me.
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      • Profile picture of the author nolokimes
        Originally Posted by 0oo0 View Post

        Because not everyone lives in the middle of nowhere by farms... I don't think I have a farm within 100 miles of me.
        Sorry that you did not get the idea behind the sentence. good for you to live in a city. greetings from the silicon valley.
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  • Profile picture of the author DeanSoto
    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.
    Amen Amen Amen! Totally agree. I've been pricing my services high since the beginning and my clients love the value. It's about psychology and about your ability to deliver value. You can't sustain a business that doesn't have enough revenue to remain flexible. The more that you charge, the more attractive you are and the more you can give to your client without feeling like you are working for free.

    As long as you give great quality, your ideal customer will buy and keep coming back for more.
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  • Profile picture of the author 0oo0
    @nolokimes

    I am pretty sure the OP isn't talking about competing with fivver gig either, from the post I think he is saying people in the service industry should value themselves and their services more because the deserve to...
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  • Profile picture of the author specialized
    I will echo the comments about global economics. USD $5 in the US or Canada means one thing to people in those countries, but the equivalent of that same USD $5 in the currency of a country like Pakistan or India means an entirely different thing to people there due to the differences between these east/west economies. This should be pretty obvious.

    This is the downside to globalization and international internet markets... if you're in a country like the US or Canada, that is. If you're in Pakistan or India (and many others), you're experiencing an upside and opportunities like you've never seen before. However... there is a correcting factor at play there too, which is that those opportunities attract such a massive horde of work-seekers that a large number of amateurs and people peddling shoddy work enter the fray and pollute/dilute the quality of that cheap labor and cause western bargain-seekers to be very cautious.

    I once thought I'd randomly test a logo designer from a subtropical Asian country on Fiverr just to see what kind of quality a random sample would get me, and I was appalled by what was delivered. It was an absolute joke. Now I don't mean to smear the skill level of any particular race or nationality, because talented people are found in every nation on earth, but this one test was enough to stun me into a severe reluctance to ever go that route again without careful vetting of the provider.
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    • Profile picture of the author JEasy
      Like I mentioned earlier, it's all about the people who are buying these services at these rock bottom prices. If it's about saving a quick buck on content, then it's a guarantee that the quality will suffer. Maybe this is why Google has lost their minds with all these Algo updates.

      People please buy quality. Even if it costs you a TAD bit more than $2.00 - $5.00 an article (lol ).
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  • Profile picture of the author GMT
    Unfortunately with the economy still in disarray it keeps businesses scared, and they may need to lower their prices just to survive. It also has the negative effect that when buyers do spend money they want to be treated like royalty and they want the 5 star treatment for their $5(lol). I'll be happy when things balance out again
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  • Profile picture of the author WriterWahm
    As someone who once had gigs on Fiverr (writing gigs), I have to disagree with you here. I don't charge $5 for my articles - not anymore. But I started out that way.

    It's easy to sit with the safety net of social welfare and criticize others that are that desperate. I'm glad you don't budge on your prices...it's great really. But you know what? That is a luxury for some people.

    I live in Malaysia and I'm from Africa. When I first started writing online, I offered my services at $5/500 words. Why on earth would I do such a thing? I'm a lawyer and I practiced law at one point in time. But when you are in a foreign country (where your law degree is totally useless) and all that stands between your family and being destitute is a few hundred dollars, you will put your pride (and ego) in your suitcase and do what you have to do.

    So I offered my writing services at that price and worked my butt off. At the beginning, I was earning about $700 a month. It doesn't seem like much but do you have any idea what $700 can do in a country like Malaysia? It paid our rent, kept us in baby supplies for a month and fed my family.

    So I'm damn proud that I was able to work for $5 an article because it kept us sane!

    The Warrior Forum is an international forum. So maybe your title should have been more location specific? I don't know.

    I have great respect for people who are willing to work hard to get what they want. And contrary to popular belief here, you can raise your prices. I did. And I still have more work than I can handle.




    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.
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  • Profile picture of the author zelgly2
    The reason could be so many new companies globally are arising and they would like to get foot in the business for which they slash the price.
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  • Profile picture of the author JayMagnus
    For the most part I agree, it's kinda like some weird business prostitution, but desperation is the key word of course. I've seen it personally, being the son of a talented (but broke) sound engineer, and myself having been around music my whole life have even dabbled in some mixing at a low cost just to get some money asap. Almost everything is so competitive now, so a lot of people feel they have to charge less than what they deserve just to get paid. It's unfortunate but when there's mouths to feed...
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  • Profile picture of the author knish
    I think you are right about setting reasonable fees. You should at least make above minimum wage. If you are working for a site such as Fiverr you should probably only agree to do what can take you 20 to 30 minutes to finish if you are from the U.S.
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  • Profile picture of the author cloudstrife
    The old adage goes, "You get what you pay for". This essentially means that sometimes when the price is too low, then the quality could be compromised.

    The reality in the 21st century is that due to globalisation, the price of a good/service could be a lot lower if produced/ provided elsewhere in the world. That is one of the main reasons why Apple produce their products in China and not The US where they are head-quartered. In this situation, the quality is not compromised but the cost is still cheaper.
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