One of the dubious pleasures of being a service provider, freelance or otherwise, is the all too frequent awareness of colleagues that have no shame in offering very low rates, sometimes 25% of your rates, and undercut your business. In a business with no entry barriers, i.e., significant capital outlays or licensing requirements, any Joe and Jane can hang out a virtual shingle and offer the same service, as least as far as customers can tell. Since the fixed costs of a providing services are virtually zero especially for Internet-based businesses, the breakeven point for such providers is quite low. Thus, these market-breaking bids are legitimate offers.
However, for those professionals trying to make a living over the long term, these offers are both threatening and infuriating. First, the presence of low bids creates the impressions that your rates are unjustifiably high. This dissonance forces established providers either to lower rates or communicate their added value. On an emotional level, seeing a supposed colleague undercut your prices causes anger and frustration. These emotions are expressed in wishes, private or public, to have the guilty party hung at the gallows, exiled to Elba, spend time in a re-education camp in China or tongue-lashed by the principle, to name just a few options. However, the phenomenon of undercutting is as ancient as prostitution and just as indestructible. Thus, I offer some calming thoughts to help the suffering professional accept reality.
The first point in mind that it is possible to earn a very good income
with such rates on condition the cost of living is proportionally low. To provide
a perspective, within the developed world, the price of a cup of coffee ranges
from $0.74 in Lisbon to almost $3.50 in Tokyo. For those in living in the
developing world, costs of living are even lower. Thus, with the same net
income, one person can live like a king by local standards while someone in a
more expensive country may be homeless. Therefore, the proposed low rate may be
quite respectable for the provider.
[Cup of coffee
Even if a person lives in a posh place, it is possible to earn a decent
living with low rates. The key is technological prowess. Since the value of
services are essentially time-linked, people that work efficiently can produce
more in an hour and thus earn a respectable daily wage. At an APTI conference
in Spain several years ago, a translator gave a half-hour explanation of how to efficiently use
the key board to expedite translation. The productivity of a person with such
skills is clearly higher than the those not native to the technology. Thus,
through effective use of time and technology, service providers can even thrive
at low rates.
[Typing on keyboard]
While the income from low-rate offers may seem low, it may be sufficient
for the needs of certain providers. In many fields, including translation,
providers have full time jobs in other fields and only provide the service to
gain extra income. Peasant women used to call this butter money since it
served to pay for treats and luxuries, however these were defined. Consequently,
these service providers are not even trying to make a living, which gives them
full freedom to set rates. The one-eyed consider themselves fortunate in the
kingdom of the blind.
For many, low offers are the tools to take the first steps in a new
profession. Lacking experience and skills and needing to acquire them, they are
willing to pay for their apprenticeship by cutting down on potential income
until they are able to raise their rates. In any case, that approach only
partially works. The reality is that raising rates is very difficult in almost
all fields at any time. Furthermore, most customers demand the same level of work
regardless of experience or lack thereof. However, starting out at low rates
appears to be an effective strategy for entering a new profession. Most
translators began in this manner.
[Father teaching child]
Fear can be a factor. Some service providers may be aware that their
prices are low but are very dependent on that scant income. The worry is that any
attempt to raise rates will lead to the loss of the vital income or prevent
them from attaining any new customers. This
previous year has clearly increased the number of freelancers in this category.
This concern is real, difficult to overcome and worthy of sympathy.
[Child in fear]
Finally, there are those that follow the advice of the three monkeys:
they don’t look for, ask about or discuss rates. They are perfectly happy
earning their daily bread (without the butter) and will not demand more. Some
eventually attain wisdom and realize they have been working for peanuts for
years, ultimately raising their rates. Others never grasp that they are cutting
themselves short or simply do not care. Maybe ignorance is bliss.
The next time you find yourself muttering curse words after reading some offensive offer by a service provider in Facebook or a professional portal, take a deep breath and consider the possible justifications for the low rate. Clearly, anger only harms the person getting angry, especially when it can fuel no constructive action. Remember that Audi and Mercedes-Benz have been no less successful than Volkswagen and Seat. To quote Voltaire, in the face of price-lowering competition, il faut cultiver son jardin, i.e., create your own universe and not worry about others, at least as much as possible.
* The blind need captions to fully access the Internet. All picture from Pixabay.