If you are getting into the design business there are a lot of factors to consider for pricing. You don’t want to overcharge and not get business and you shouldn’t undersell yourself. This article will help you find a good price point for the job and your skillset.
Designs for individuals or small businesses will net you smaller profits. If that’s the target audience, you should keep the price under the $5k range. However, for large companies and corporations, you can charge $10k or more, depending on your skillset.
There is a lot to cover in regards to pricing and we’ll get more in-depth about what you should be charging.
There are several factors to consider when it comes to deciding on costs for packaging design.
- Fixed rates
- Hourly rates
- Hourly and fixed rates hybrid
- Small businesses
- Designer skills
- Supplies costs
As you can see, we’ve split some of the big points into categories so that each point can be covered in depth. With the knowledge from each individual talking point, you will be able to come up with a good price plan for your design business.
1. Fixed Rates
Fixed rates are attractive to companies because they know what they are getting right off the bat, but the biggest downside to this is you run into the problem of potentially losing money if the project takes longer than anticipated.
For simplistic designs you’ll want to charge less. One example is this company, they charge a minimum of $349 and up to $1499. Now, if it’s something complex, look at charging no more than $3000 for smaller companies.
Fixed rates for large companies, will probably sit around $5000-$10000. Now, this is assuming you have a full portfolio and years of experience. If you are just starting out, lowering your rates will give you a better advantage of getting the job.
2. Hourly Rates
With hourly, you may find it best for smaller projects or a project that is difficult to estimate for a fixed pay. The biggest downside is that you are guaranteed minimum payment for the work done, so if you need to make a certain amount, set the hourly rate where you will be okay financially.
For Hourly rates, the averages of what is charge vary by state, but on the low end its common to charge $22 per hour and on the high end, almost $50 per hour. For newer designers you’ll want to target the low end until you gain experience. If you are already a master at it,, your rates should be close to or above the $50/hour range.
3. Hourly and Fixed Rates Hybrid
Now, some designers will charge a fixed rate and then charge hourly for any future revisions. This hybrid scale could end up being beneficial in the long run because you’ll have the guaranteed flat fee and then any future touch-ups can be done hourly.
Now, for revisions, hourly should be lower unless it’s something complex. If they only want revisions, stick around the $25/hour range or no more than a few hundred for fixed rates. Unfortunately, freelancers tend to end up on the lower side unless you have made a name for yourself. Keep in mind, this is for revisions only, make sure they do not want a complete redesign. If that’s the case, charge the normal amount you would.
Some companies hire in-house designers as well, but freelancing seems to be more lucrative. You can view some salary information here.
4. Small Businesses
Small businesses and individuals will most likely have less to spend. If that is your target client, make sure you are aware that a lot of these places will not have massive budgets.
When working with small businesses, you’ll most likely be seeing budgets that don’t go over a few thousand on the higher end. However, it is a very good place to get started in building a good portfolio.
Now, when it comes to huge brands and corporations, they are willing to dump money into packaging designs. This is where there is lots of money to be made, but you’ll need to have a competitive portfolio and plenty of experience.
Some companies will spend tens of thousands of dollars on packaging design for one product.
So, if you are new to the field, you should start out by targeting small brands. Once you’ve built up a good clientele, you’ll be able to set your sights on bigger jobs with incredible pay.
6. Designer Skills
Now, this one is a huge variable for pricing. Design skills are hard to really put a price on because the market boils down to what someone will pay. However, if you have a great portfolio, make sure you value your talent at a price point you believe you deserve.
If you look on websites that hire freelancers, beginners will make $15-$30 per hour, maybe less and only a few hundred tops for fixed rates. However, if you browse websites like Upwork, masters of the trade can expect upwards of $50-$70/hour and thousands of dollars for fixed rates.
One of the biggest downfalls of creative jobs is people undervaluing their skills. Do not let anyone strong-arm you into working for peanuts.
7. Supplies Costs
Now, another thing you need to factor in is supply cost. If you are designing by hand, work the cost of your supplies into the cost you charge so you aren’t losing money. With digital designs, break down costs for equipment, internet, and power. All of those things are necessary to factor in because you need them to do your job.
Factor in your internet, which is on average, $64/month, electricity average $119/month, and equipment used. This includes a computer or drawing tablet which can go from hundreds to thousands of dollars total. You may already own them, but you still want to factor it in, just in case something happens and you need a replacement.
This is why it’s incredibly important to include your costs in your price because if you undercharge you won’t have enough money to fix electronics for digital designs, or by more supplies if you are doing them by hand.
Do not set prices so low that you can’t afford to buy more supplies or keep the lights on. A big issue in creative jobs is people always trying to undervalue you so they can pay less.
Work towards building a portfolio and do some research on your target client’s average budget. It also wouldn’t hurt to network with other designers and get some industry insight, especially for your specific niche.
And the biggest takeaway should be that you set your prices at a point where you can afford all your bills and still make a profit. Do not be afraid to value your skills, because people will try to get free or extra work out of you without paying.