Originally Posted by Julian Don't be short-sighted and believe for one minute that discounting is going to make you lose money, it will make you a lot more money in the long run! Think about shop stores, they have very regular discounted specials, this enables them to put through more product at a lower price, and the increased volume vastly counters the discounted prices.

Julian, the problem with your reasoning is that you really are the exception in this case. For the majority of freelancers, discounting not only DOES lose them money in the long-run, but it actually forces them out of business, because they're never able to pull themselves out of the rut they dig themselves into. And I'm not just talking about designers here. I'm fortunate enough to be able to communicate with and work with some of the top consultants in the world, in fields ranging from IT work, Management consulting, Marketing ... freelancers all across the board. It's not just an industry problem, it's a universal one. On this topic, I generally like to refer people to Michael McLaughlin's articles, as he's a top and very well-respected consultant who's been there. This article focuses mostly on an hourly rate structure, but he goes a little bit more specifically into this subject under the heading "Client Relationships Can go Bad." http://consulting.about.com/od/finan...ourlyrates.htm

Also, you absolutely can't compare a freelancer's work to shops that run sales. I've worked in retail advertising, managing those sales, so I know the numbers. Retailers purchase things relatively inexpensively, then mark up their prices by 100%-1000% or even more. If you knew how little they spent, it would disgust most of you at how much you're being charged. So for them to give a 30% discount on merchandise or even more is NOTHING to them, when they've marked it up. They're still able to realize huge profits, while the shopper thinks they're getting a good deal. So in that case, yes, it increases sales volume and profits.

That is NOT the case for most freelancers. The reason I say you're the exception is that you likely know the value of your work and you charge accordingly for it. I remember you posting in another thread that $25 would buy a 15-minute consultation with you. So that factors out to $100/hour. If you keep your overhead relatively low, and have a rather steady flow of incoming work, you're not likely to see a problem w/ offering a discount. You were right when you mentioned people undervaluing their work though. That's exactly the problem that can't be ignored. Here's an example of what commonly happens, using a designer as an example: You may work at as a designer for a firm, and they pay you $25/hr. However, they're actually billing their clients $100/hr for the work that you do. So your work has a value at $100/hr. The designer decides they want to freelance. What they should do is charge what they're worth - $100/hr (maybe a little bit less, factoring in the firm's own mark-ups to cover their larger overhead) - so let's even say $75/hr. But in reality, most freelancers make the mistake of charging far too low to start with - in this case let's say they only charge $25/hr, figuring that's what they made at the firm, so that's what they're worth, and they're going to be making enough to get by on. The complete fallacy with that is they far too often forget that they can't base their rates on 40 hours/week that they may have been paid for at a firm. They can only bill an average of 22-23 hours per week, w/ the rest of their time being spent on admin and marketing work. They need to account for being paid for that time too, in addition to covering any overhead costs they may have, and still manage to realize a profit. Most freelancers simply don't do that. So, like I said, you're right in saying that they undervalue their work, but your theory that more work equals more volume which equals more money simply isn't true for the vast majority of freelancers.

I don't think the real issue here is whether to give discounts to clients when they ask for them. I think the real issue is that some of the more experienced freelancers here should be trying to help the younger ones understand how to value their work and set prices appropriately in the first place. Once that's been established, you WILL have some negotiating room with your rates, as long as you're responsible enough to consider all of the possibly negative results as well as the positive. Never just jump to say yeah, I'll give you a discount, b/c you're simply afraid of losing the work. You should be busy marketing yourself towards potential clients who value your work accordingly in the first place.