You can learn a lot most the business end of design and illustration past trial and error and reading articles and books, only one thing that is seemingly incommunicable to get a grasp on is pricing. Whether you are a pupil, a immature designer, or a seasoned pro, pricing jobs tin be one of the most frustrating parts of the creative procedure. The price of artistic work is shrouded in mystery and very subjective. While it makes some people uncomfortable to talk nigh art and money together (as we all know creatives are really meant to suffer through life and dice penniless), they are incredibly similar when you call up almost information technology. What is money other than dirty rectangles of pressed tree lurid? Because we all believe information technology has value it is valuable.

I know you're all dying for me to go down to brass tacks and explain how to toll for each and every design situation, just what follows won't be anywhere close to a definitive guide, just some of my own opinions and words of wisdom on how to avert screwing yourself and the rest of u.s. over past doing too much work for too little pay. We're in accuse of assigning value to what we practise.

1. Pricing hourly punishes efficiency.

So this is a pretty bold statement and it should be taken with a grain of salt. Hourly pricing tin be incredibly advantageous in sure circumstances, like when you receive that offset e-mail from potential clients and, through their g-give-and-take introductory essay lousy with emoticons and unnecessarily capitalized words, they pigment a clear picture that they are completely batshit insane. You know that there will be many rounds of revision in your future and that over the course of working together you'll be every bit much a therapist every bit a designer. Totaling those 500 hours at whatever your hourly rate is will equal a pretty good pay day.


It'due south more than than just crazy people that can make hourly pricing worthwhile though–pricing whatever long term blueprint projection hourly can be advantageous, every bit long as y'all communicate clearly along the way what kind of hours you're devoting to the project. If the first fourth dimension your client sees your full hours is on the job-concluding invoice, a world of hurt awaits. It will be like beingness audited except somehow more unpleasant. Be prepared to forward them every approval e-mail, to itemize every infinitesimal spent on the website / volume / whatever.

Pricing hourly seems much easier than flat-rate pricing, but because you have to give clients a ballpark full-cost toll upfront (the full hours you plan to work x hourly rate), y'all can end upwardly in a very tough spot if you don't have a firm grasp on how long information technology takes you to do things. You're nearing the halfway point in the projection and are already over the total hours y'all're contractually committed to. What does this mean? It almost never means that you're paid double your original fee. Even if yous can eke out a picayune extra money from the client, your hourly rate volition expect more like the one yous were earning at the Blue Comet Diner at historic period sixteen.

So in one case you take a grip on your work flow and become more and more than efficient, hourly pricing makes perfect sense, correct? You lot know how long it will take you to do something, you price for it, everyone is happy.

Unfortunately this is a half-truth. Sure you're getting paid well enough and certainly making more hourly than you probably were at your old twenty-four hour period job, but I'll paint a picture as to why this is a flawed pricing model: Two designers are hired to produce posters for a music festival. Both have the same hourly rate of $100 per 60 minutes (a reasonable charge per unit for someone who's been in the biz for a few years and has a few accolades under their chugalug), but one designer works much faster than the other. Both are every bit talented, but ane is far more than efficient. At the end of the job, the designers turn in their invoices–he worked on it for a total of 18 hours and she a total of seven hours. He is paid a respectable fee of $1,800 and she $700 for producing the aforementioned result. Your rational mind says "Well, he did work more than hours than her…" but part of you lot knows that this isn't completely fair. This becomes epically clear when working for big name clients.

Here'south some other scenario: You're hired to do a monogram for a giant international visitor. They'll want to utilize this monogram on everything from price tags to billboards to Television set spots and they want to use it forever (in perpetuity until the lord's day explodes). They have a pretty clear idea of what they want and you know that information technology volition accept nigh 10 hours total with the initial exploration, dorsum and forth revisions, and finalizing. Even if your hourly rate is $250 / hr (a pretty high rate), the total you're earning for that logo is $ii,500. If you lot think that is a good price for a professional designer to earn crafting what is substantially a logo for a huge company, y'all are mistaken. So if you lot aren't pricing hourly, how DO you price?

2. Licensing and Rights-Direction

Most designers have into account the hours they'll put into a project when coming up with a price, only the seasoned professionals employ it as part of the fashion they quote a project, and not as the only defining factor. One time y'all feel comfortable with your hourly rate and tin can somewhat accurately predict how long it volition take you to practice something, you have to consider a few other things that will boost your prices and plow this design hobby of yours into an actual sustainable career.

As a designer, when you hear the term "rights-direction," y'all're brought back to your intern days doing photograph research, trying to find not-atrocious royalty-free images afterward your boss told you all the rights-managed photos were fashion too expensive. How does rights-direction employ to a designer or illustrator? Photographers aren't the merely ones able to manage the rights of their work. Yous inherently own the rights to annihilation you create, this is why it's incredibly important to read every contract for every job. Often times clients want more rights than what they are willing to pay for–the biggest ruddy flag word beingness "work for rent." This means that the client owns all the rights to annihilation you create for them. They essentially, legally, go the author of your work.


Every bit a graphic designer, work for hire is a bit more acceptable in many situations since yous're not authoring new content as much equally creating a beautiful context for other people's content (speaking specifically about any sort of layout design). Where rights management usually comes into play is in the context of identity piece of work, and this is why logos are priced the way they are. It's understood that the clients volition need the rights to the mark y'all create so that they tin trademark it and use information technology on unlimited applications, then when pricing for a logo you should take that into account. In improver to a off-white hourly rate, clients pay for the rights to use that logo in an unlimited capacity.

Bated from giving abroad all the rights to your work for an additional (hopefully ginormous) fee, you can give them abroad for limited periods of time or for limited applications by licensing piece of work to clients. In that location are fewer means to do this every bit a graphic designer, but licensing is an incredibly (incredibly!) important role of being an illustrator or letterer. Of the couple hundred client projects I've washed over the past few years, very few of them have required a total buyout of all rights, and the ones that have required them paid my rent for the meliorate part of a year. Here are some factors that go into pricing a job based on licensing:

  • How long does the client want to license the artwork for? I month? One twelvemonth? Two years? 5 years? In perpetuity?
  • In what context is the artwork going to be used? Do they have the rights to use it on anything? In impress only? Web only? Circulate? Tattooed on their faces?
  • If the job is reprinted, will there exist an additional fee for a reprint?
  • Do they want an unlimited license or do they need to own the rights?
  • Are these rights transferrable if the company is sold?
  • What kind of company is it? Is it for a Mom-and-Pop business organisation, a multi-billion dollar corporation or something in between?

By now your head must exist spinning. This is some complicated stuff, right? Maybe, merely this is how you can actually make a living doing illustration and design and maybe fifty-fifty somewhen quit your but-they-requite-me-health-insurance barista job. What follows is a fictional pricing case to bear witness how powerful licensing tin be. I'1000 going to write information technology in the context of lettering, which is priced essentially the same as analogy. Graphic designers should still pay attending though, considering when I talk about buyout pricing, that's essentially what y'all're going to be thinking about when pricing logos. My price points will exist college than what a fresh-faced n00b tin probably charge, simply should at least illustrate how much of an bear upon licensing can have on the toll of artwork.

3. The Correspondence

Dear Ms. Hische,
I'm an art managing director at Awesome Agency Inc, working on a campaign for an international wear brand (on par with The Gap) and am writing to gauge your involvement in creating artwork for us. We need one five-word phrase illustrated in a script style. The artwork should be highly illustrative, attached are some examples of piece of work you and others take done that are in the ballpark of what we want for the entrada. If this sounds appealing to you, please send united states of america a quote by end of day tomorrow so that nosotros can present your piece of work, along with a few others we are gathering quotes from, to the client. Thanks so much and look forward to working with you!
Sincerely,
Arthur Director

They didn't give me much to go on here bated from the bodily work I'm creating. It sounds like a cool job, just I'1000 going to demand to do some investigating before giving a proper quote. The biggest young designer error here would be to quote a flat fee without finding out what kind of usage rights they want.


Thanks so much for thinking of me Arthur! I'll put together a quote this afternoon. Do yous want me to cost for every usage scenario or do you have some specific uses in mind?
All the best,
Jessica

Normally here they'd write back with some very, very specific uses in mind, which makes it a bit easier to quote, but sometimes you'll get a letter that looks something like this:

Hi Jessica,
Peachy to hear back from y'all! We're nonetheless in the exploratory stages of the project, and then nosotros can't give specific usage situations yet. Delight quote for cosmos of artwork for presentation only and for a few ballpark usages.
Arthur

iv. What We Know

  • This is for a large international clothing company.
  • They are gathering prices from a few dissimilar people. They'll present several artists to the client, who will chose based on mode or lowest toll depending on what the client's priority is.
  • They desire a price for presentation only. This means you create the artwork and they only take the right to bear witness it around in-business firm and to the customer, NOT to use information technology in whatever manner for their campaign.
  • They want a number of usage scenarios.This is on superlative of that initial creation / presentation fee.

5. Pricing for Presentation

If you've done any editorial illustration piece of work (magazines and newspapers), you know that the rates are pretty standard across the board: $250 to $500 for a spot illustration, $500 to $750 for a half folio, $1,000 to $1,500 for a full page, $2,000 to $3,000 for a full spread, $1,500 to $iii,500 for a comprehend. These are all pretty normal prices and at that place are of course magazines that pay higher or lower. I tend to start with these prices in listen when thinking about pricing for "Presentation Only."

They want a five-word phrase that is highly illustrative, which equates to "a full page illustration" or so. Because this is for advertising and non editorial, adjust your rates depending on the client. This is for a large company, so my presentation-merely fee might be somewhere around the $5,000 to $seven,000 mark depending on how complicated what they're subsequently actually is. If this were for a smaller company, the presentation-only fee might be closer to $2,500 or $3,500.

vi. Sample Usage Scenarios

If a client doesn't tell yous specifically what usage rights they need, yous should make certain at that place is a good range represented. In this situation, I'm definitely going to cost based on the length of time they need it, plus some general examples of what context the artwork volition be used in. When y'all send your quote, it should be broken downwards as conspicuously every bit possible so there is no defoliation as to what the clients are paying for in each phase of rights licensing. This would exist the quote I would send dorsum:

Hello Arthur,
Below are a few sample quotes for the project. As I did not have much info almost what usage rights you needed, we would need to talk specifically about anything not mentioned below once the client has a clearer picture of what they need.

Presentation But: $7,000
Two to three initial pencil sketches shown, one chosen to be created as final art. Afterward final artwork is presented, the client may request up to two rounds of small revision. Boosted revisions after this indicate will exist billed at $250/hour. If the client chooses to not motion forward later pencils are presented, a impale fee of $3,500 will exist paid for completion of sketches. If artwork is completed to final, the total fee volition be paid.

Usage Scenario 1: +$5,000
The client may apply the artwork in mag and newspaper ads (domestic and international) for a catamenia of one yr.

Usage Scenario 2: +$7,500
The client may utilise the artwork in all print media (domestic and international) including but not limited to magazines, newspapers, signal-of-purchase displays, posters, and billboards for a flow of i twelvemonth.

Usage Scenario 3: +$10,000
The customer may apply the artwork in all impress and online media for a period of 1 twelvemonth.

Usage Scenario 4: +$fourteen,000
The client may use the artwork in all print media, all online media, and broadcast media for a period of one twelvemonth.

Buyout: +$25,000
The client may use the artwork in all media including impress, online, and broadcast in perpetuity.

Thanks then much for thinking of me for the project, let me know how these numbers go over and if you need any clarification nearly the different usage points.

All the best
J

And then this is a pretty basic breakup, but it gives the agency/client a lot of toll points to consider. If I wanted to break it down even farther, I would price based on two-year and five-year use and give dissimilar prices for U.Southward. simply, North America only, etc. Nigh importantly, annotation that all of the usage scenarios are on top of our original presentation only / artwork creation toll. The prices are not cumulative in this example quote, so each +$ is but added to the presentation fee. The top cost in this scenario is $32,000. These prices might seem completely outrageous to yous, only they're really pretty reasonable when nosotros take into event who the clients are and what kind of rights they'll probably need. If you're an up-and-comer, your prices might be a bit lower simply the percentage markup should remain about the aforementioned. Imagine if we had priced this hourly!

7. How do y'all know if you priced right?

If the clients write back immediately and say, "These numbers look swell! Nosotros'll send along a contract for y'all to go over in a few days!" It probably ways your prices are too low. If they write back and try to negotiate y'all down a lilliputian bit, you were probably pretty spot on, and if they write back and say that this is well beyond their budget, you become to decide whether or not you want to figure out a way to work within their upkeep or whether you want to walk away and have one for the team. When you're offered a very low budget by a very huge client, yous can e'er feel expert well-nigh turning it downwardly knowing that yous are helping to raise the standards of pricing for others.


8. Why doesn't anyone ever talk about pricing?

There are a lot of reasons why designers and illustrators are reluctant to talk nigh pricing, the near obvious being that no one wants to shout their annual income to the masses. One time you start giving abroad your general prices, it'southward not incredibly difficult to add things up and effigy out a ballpark of what an individual or visitor makes in a yr. A personal note: don't presume that the pricing structure above means that I'm pond in a pile of money. My half-retired dentist begetter however makes more than I do. The simulated job I used as an example in a higher place is an advertizing chore, and I used information technology as an example because pricing for advertising is one of the darkest arts of all. There are wild differences in pricing from presentation to buyout, and a ton of factors that affect the price. It's great to environs yourself with friends or more experienced designers that can help you lot price a job. You lot can always consult The GAG'southward Ethical Guide for Pricing, but definitely use it for ballparking more than than definitive numbers.

9. The Pricing Domino Effect

It'south incredibly of import for fifty-fifty young designers to e'er quote respectable prices. It can be very tempting to create artwork for a "absurd" visitor for very trivial pay and the promise of insane exposure/ an incredible portfolio piece. Every successful designer and illustrator has at 1 bespeak succumbed to the siren vocal of the "cool" industries (there are a few "cool" companies that don't try to take advantage of designers just they are the exception and not the norm). When you are starting your career equally a freelancer, it will exist incredibly tempting to take on whatever work that comes along, no matter how unfairly companies are trying to compensate y'all. Recollect that you are talented and that your talent has value and that ultimately it is upwards to you to decide how much people value your talent. By helping keep pricing standards high, yous not only assistance yourself past avoiding the title of "The Poor Homo's Marian Bantjes" (essentially the artistic equivalent of a knock-off handbag), y'all also help every other young designer struggling to get paid out there, and help every designer that came before you to go on making a living doing what they love.

This article was adjusted from an essay titled The Dark Art of Pricing. Read the original hither.