One of the most common mistakes freelancers make, especially early in their careers, is not charging enough for their work.
Some freelancers aren’t sure how much to charge for their services, or they charge too little out of a misguided sense of not wanting to overprice themselves out of a gig. But the truth is, freelancing can be—and is meant to be—a for-profit endeavor. If you’re doing it right, you could be making more money as a freelancer than might have made at a day job. And you shouldn’t apologize for it.
This lesson occurred to me the other day when I was reading some online brouhaha about the profit margins of Beats by Dre, one of the world’s most popular brands of headphones. If you watch TV, you’ve seen their dramatic slow-motion commercials featuring athlete endorsers. The headphones were also recently featured by several of the world’s most famous soccer players in a viral video (“The Game Before the Game”) to promote the 2014 World Cup.
Developed and branded by hip-hop legend Dr. Dre, Beats By Dre was recently acquired by Apple for $3.2 billion and currently boasts a 27 percent share of the global market for headphones.
Even though Dre Beats are extremely expensive ($450 and up), recent reports disclosed that the headphones only cost about $14 to make. Some Beats fans were outraged that such a cheap-to-manufacture product is being sold at such a high price, while other critics point to this type of high-priced product as a sign of the unfairness of globalization and the shallowness of celebrity endorsements.
However, regardless of the merits of Beats headphones, reading about their profit margins got me thinking about important lessons here for freelancers.
Did you get into freelancing to work 12-hour days in order to barely make enough money to live on? No. Did you choose this career so you could have terrible health insurance and constantly overdraw your checking account and worry about paying the rent? No. Just because the stereotype of the struggling writer exists doesn’t mean it has to be true.
Dr. Dre isn’t afraid to charge $450 for headphones, and you shouldn’t be afraid to be wildly profitable. One of the most mind-blowingly empowering things about freelancing is that there’s no limit to how much money you can make. If you work hard and work smart, you can make $1,000 per day. Freelancing is one of the few careers that enable you to reach all of your financial goals while still having complete freedom over your work schedule. So stop feeling guilty about how much you charge.
Are Beats “worth” $450? Who knows? I’m not an expert, but some of my friends have said the headphones don’t perform as well as other options on the market. But regardless of what the critics say, lots of paying customers believe Dr. Dre’s headphones are worth the price tag.
In the same vein, as a freelancer, there are things you can do to convey an image of being a “premium” option on the market. You can show your clients you’re deserving of a higher fee with subtle marketing like a professionally-designed website, visible endorsements from notable clients, and a nearby boombox playing Aloe Blacc’s “The Man” on repeat.
I’m not at all offended or upset that Dr. Dre is making such a massive profit on every pair of headphones. Good for him.The whole point of being in business is to make a healthy profit margin. We’re all trying to do better than just scrape by—we’re working to build successful careers and support our families and save money for the future.
And if you can get Malcolm Gladwell to endorse your resume in a commercial while he walks into a hostile book-signing event in slow-motion, even better.