When To Increase Your Freelance Rate

Last updated on July 11, 2020

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When I started out on this freelancing career, what attracted me most was the fact that I could work from home. No more issues with traffic jams or bosses putting me under constant pressure. What hadn’t hit me though,  was that I had the liberty to increase my freelance rate.

What I also didn’t count on was the guilt and the questions that followed. I asked myself, “Are you really worth this much, Sheeroh? Are you really ready to raise your rates, both hourly and fixed,? I’m sure I’m not the only one who has ever asked this question, the million dollar question: ‘When  should I increase my freelance rate?’ You probably have asked the same question too. So, let’s delve into this.

When To Raise Your Rates

• When your skills and experience warrants it

I was quite excited when I landed my very first contract on Odesk. I was paid $10 for transcribing a one hour audio. You’re probably laughing right? I thought I had hit the goldmine! Wow, I could finally say that I had made money online. Nevertheless, I didn’t stop there. The more I learned and worked for other clients, the more I gained in experience and knowledge.

You’ll discover that freelancing is a field that encourages a lot of continuous reading, research and training. Therefore, four months down the line, I felt confident enough to raise my rate. When you become experienced and properly skilled, don’t be shy. It’s well within your right to increase your rate.

Don’t sell yourself short. Your client is not only paying you for your time and effort, but they are also paying for the experience as well. It is unwise to continue charging your clients the same rate as you did one or two years ago. If you do this, you’re telling your clients that you have not improved on your skill sets or worse, that you’re afraid. Do you fear that clients will run at the sight of your increased rate? Don’t let fear stand in the way of your moving forward.

• When there is a general increase in demand for your services

I’ve had a very interesting last four months on Odesk. I’ve received dozens of invites from clients for my transcription services and oh, how sweet that turned out to be. Sweet initially, but also a bit overwhelming. I came to the realization that I was working on so many projects, and that I was beginning to feel stressed-out, trying to cater to every client’s whim. Lesson learned. I decided that it would be a good idea to raise my rate (and it was about time too) and get more quality clients with far less stress.

Other freelancers offer unique products and services. It therefore follows that when the demand for these unique talents surpasses the supply of the same, you will need to consider increasing your rate. It’s not being opportunistic; it’s simply being wise. You’re merely obeying the laws of supply and demand. You’ll be working on fewer projects, so you’ll be able to give each client more of your time and attention. Fear not. Raise that rate!

• When economic indicators such as inflation take charge

Whether we like it or not, we have to grapple with the ever increasing costs of living and the rate of inflation. Our purchasing power seems to be deteriorating every now and then, and this is one of the reasons why we should increase our rate. Working from the comfort of our homes does not make us exempt from economic challenges that other non-freelancing workers face. In order to ensure that your online business remains afloat, you must raise your rate ( of course having considered the above two points)

Pointers on Increasing Your Freelance Rate

Before you do the above, please note:

1.  It’s advisable to raise your rate gradually, especially when you’re dealing with clients who you’ve been working for over a long period of time. I mean, how would you like it, if the store where you normally buy your stuff suddenly increased their rate 100%, without any notice! Not a good feeling huh? Be careful not to lose loyal clients by surprising them with a huge hike in your rates.

2. Contact your clients and let them know you’ll be raising your rate. You can send them a message through the workrooms if you work on Odesk, Elance or other freelancing sites, or you can contact them through Skype, email etc. Start by thanking them for being wonderful clients and then proceed by telling them that you will increase your rate by such and such a date due to x,y,z reasons. It’s just good customer service and your clients will appreciate you for this.

In Other News

Speaking of raising rates, I was pleased to see on Odesk’s blog, a notice that from November 15, 2014, Odesk will be introducing a minimum rate of $3 in their hourly contracts. This was as a result of  some freelancers lowering their rates too far in order to win projects. Me thinks $5 would have been better, but it’s definitely a step in the right direction.

Odesk has also adopted Escrow which means that for fixed price jobs, freelancers no longer have to ask for upfront fees. Why? Because  employers can now submit a fully refundable deposit to oDesk. The  deposit is held by oDesk until the client approves the work, and once the work has been approved, the money is released. This gives a lot of peace of mind to freelancers. Way to go Odesk.

What do you think about these changes by Odesk? I’d also like to know, what this post has inspired you to do. Is it time you raised your rate?

Feel free to share in the comments below!

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About the author

Virginia Nakitari is a work from home mom passionate about making money online. She's here to show you legitimate companies offering full-time, part-time and remote jobs from home! Stay tuned!

    • Yes, some clients can take advantage of us Aggrey. We need to be alert, set goals and realize this is a business.

  • Thank you for your ever inspiring posts.I stand guided as I grow in this field.Your constant follow up on how your clients are doing is very encouraging and portrays your desire for the success of others.God bless you.

    • And thanks for your kind words Wambugu. We have so much potential that should not be left lying around. There are awesome opportunities online my friend!

  • I wish that oDesk’s Escrow could work like the one over at Elance.
    At Elance, a client cannot cancel an Escrow deposit without raising a dispute with the freelancer. This is not the case with oDesk where clients are at liberty to cancel milestones without consulting any repercussions. It is however a step in the right direction.

    Great piece Sheeroh.

    • I agree it is a step in the right direction Patrick. The days when I was soo hesitant about bidding for fixed price jobs are over. Thanks for passing by!

  • @Sheeroh Kiarie, I always thought I can never make money online until I followed you and “Awesome Transcribers in Kenya” I thought all were scams. Thanks for the inspiration, I know its not easy but I feel I have some free time I can Utilize better. I completed over 240 Levels in Candy Crush in an impressive record time under 3 weeks or so, such time can be used to make some money instead. Keep it up inspiring more people.

    • Wow. You are the Candy Crush guru huh? 🙂 Yes, with a little bit of time investment, you CAN make money online. And dignified income at that!

  • Hi Sheeroh,
    Just like timothy said, my biggest challenge is the online scams. What they advertise is not what they offer.
    I know am focused disciplined and determined to get out of this monday to friday, 9-5pm, traffic wasting jobs.

    Thanks for your insights. am working on them

    • Hi Eric. You’re right. What scams always want is for you to part with your hard earned cash. They promise heaven and deliver zero. Sign up with the sites mentioned here, and remember, working online and making money online is no ‘get rick quick scheme’!

  • Thank you for this post. I have worked as a freelancer on Elance doing general transcription work and it overall has been a positive experience.

    The first transcription job that I did was for $20 an audio hour. I really felt taken advantage of though. After that I increased my rate to $30 an audio hour.

    It takes me 5-6 hours to transcribe and proofread an hour of audio so even that I was still only making less than $5 an hour.

    Now I don’t do any jobs for less than $40 an audio hour. Most of the jobs that I do average $50 per audio hour.

    I haven’t done any freelance transcription work for awhile though because I’ve been busy with other things. Plus three months ago I hurt my back so have not been able to spend much time typing on my computer.

    I have a page on my website where I talk about my experiences working as a freelancer on Elance, including a time when I was ripped off.

    Thank you for the excellent post. 🙂

    • I think as newbies we’re all really taken advantage of at first Chris… But the good thing about freelancing is that after a while, you can up your fee! Yey!

    • Am a newbie what’s the name of your website can you share a link please, am enlightened by reading such informative blogs on your personal experiences in this freelancing industry

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