The Dark Art of Pricing
Basics & Beyond
November 23rd 2020
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Why Pricing Your Work Appropriately Matters
1. You earn enough money to support yourself and your family.
2. You enable other creatives to support themselves and their families.
3. You establish your value to your clients—the more they value you, the more they will trust you.
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But what if they think
I’m too expensive?
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“
When people tell you you’re too expensive
it means you haven’t proven your value.
Everyone buys things they can’t afford—if
you want something badly enough you’ll
find the money.
”
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— Debbie Millman
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Don’t be afraid
to talk about pricing.
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1. You are conveying facts not opinions when you quote for a project.
The numbers that you are sharing are based on the value you have assigned to your time and
work based on experience, expenses and overhead, and widely accepted industry standards.
Clients love to feel special in the creative process, but during price negotiations they want the
same treatment as all of your potential clients. If you approach negotiations without confidence,
they may believe you have drastically increased what you “normally charge” just for them, and
will push back significantly.
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2. You are (usually) being paid by a business not an individual.
When you are hired by a company to create work for them, you are being hired by a business, not
the individual that reached out to you. This is true even if that company is run by just one person.
Why does this matter? Because you should never feel that you are taking money out of an
individual person’s pocket by asking for fair pricing.
It’s not up to you to make sure your client’s company is financially solvent. Trust them to make
smart financial decisions for their business while you make smart decisions for yours.
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3. For personal commissions such as wedding invitations…
Even when you are being paid by an individual, follow your own pricing standards. These
types of commissions can often be more difficult to manage, not easier, so be cautious about
offering steep discounts unless you have a personal connection to the client.
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If you want to discount your work, communicate what it
should have cost, and then show how much you discounted
your rates to match the client’s financial realities.
The client will be incredibly grateful, and you will valued
as if you were charging full price.
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Always have a contract.
It’s important to have a contract for every project, even
small commissions or work created for friends.
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1. Create a scope of work (or SOW) which is agreed upon by both parties
2. Outline expectations for deliverables, feedback, and timelines
Contracts:
3. Clearly convey who owns the copyright of the work at the end of the project
4. Put protections in place should a project go sideways
5. Must be signed, or there must be agreement to the terms in writing
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How do I write a good contract?
Boilerplate contracts can be found online or you can commission an intellectual property lawyer to
help you draft one. The same contract can be used over and over (swapping out the particulars
based on each client’s needs), so you only have to create your contract once.
Larger clients often have standard contracts that you must use, but you can always request edits to
their contract and try to renegotiate terms. Don’t sign a contract if you don’t agree to the terms.
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Hourly & Day Rates
vs.
Flat Fee Pricing
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Hourly Rates:
1. Often mean “Work for Hire”—the client expects to own everything you make
2. Great for long term projects that require a lot of hours
3. Make sense for when you aren’t creating assets (illustration/lettering/type)
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Hourly Rates Punish Efficiency
If you work quickly, you earn less money than someone who works more slowly with the
same hourly rate. You can increase your hourly rate, but there is a cap to what people are
willing to pay based on where you live and how many years experience you have.
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Day Rates:
1. Also often assume “Work for Hire”—the client owns everything you make
2. Are more common for short term contract projects—especially in advertising
3. Rates are based on an 8-10 hour workday
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Flat Rates:
1. Define a rate for the whole project, based on project scope
2. Can be “Work for Hire” or you can separate “Creation” from “Usage”
3. Require planning and estimation at the start of the project
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Understanding
Creation + Usage
Pricing
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“Creation”
The time you spend creating & designing + the end results
of that creation (the deliverables)
“Usage”
How the client is allowed to use or not use that work
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With creation separated from use, you get paid for
your time whether or not the client uses the work.
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If you use flat rate pricing while specifying separate creation
and usage fees, you can create sliding scale pricing to have
flexible rates depending on what client you’re working with
and what their specific needs are.
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+ Buyout
(Limited Applications)
+ 5 Year Use
(Limited Applications)
+ 2 Year Use
(Limited Applications)
+ 1 Year Use
1x
Scaling Use
Mom and Pop
$1500
$2500
$3500
$5000
1.25x
Small Company
$1875
$3125
$4375
$6250
1.5x
Medium Company
$2250
$3750
$5250
$7500
2x
Large Company
$3000
$5,000
$7000
$10,000
3x
National Corp.
$4500
$7500
$10,500
$15,000
4x
Global Corp.
$6000
$10,000
$14,000
$20,000
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Retaining the rights to the work you create means you can
potentially re-license that work to different clients in the future
or reuse it / resell it in other ways.
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Calculating Your
Creation Fee
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Step 1:
Understand your Finances
Step 2:
Learn Your “Required” and “Desired” Salaries
Step 3:
Calculate your Secret Hourly Rate
Step 4:
Use your SHR to Calculate Creation Fees
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Understanding
Your Finances
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Active Income
Income earned as a direct result of services or work performed.
All client work counts as active income.
Passive Income
Income earned from assets you control. You may have had to work
to create them at some point, but now they generate income with
little to no work on your part.
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Passive Income Examples
1. Online sales of digital products
2. Book Royalties
3. Licensing Fees & Royalties
4. Rental Property Income
5. Online Classes and Seminars
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Gross Income
The total amount of money that you earn in a year
Net Income
The total amount of money that you earn in a year after taxes and
business expenses. Also known as your “take home income.”
Assume at least 30% of your gross income goes to taxes but it can
be up to 50% depending on your tax bracket and where you live.
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Net
÷
1 − Tax Rate (in decimals)
=
Gross
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How much do I need to Net in a year?
To calculate what you need to net, you must first calculate your cost of living. You can figure out
your cost of living by adding up all of your fixed expenses and estimating your variable expenses.
Fixed:
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1. Rent / Mortgage
6. Student Loan Payments
2. Real Estate Taxes (if applicable)
7. Childcare
3. Renters or homeowners insurance
8. Transportation
4. Utilities (gas, electric, cell phone, internet)
9. Car insurance (if applicable)
5. Health Insurance
10.Groceries
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How much do I need to Net in a year?
To calculate what you need to net, you must first calculate your cost of living. You can figure out
your cost of living by adding up all of your fixed expenses and estimating your variable expenses.
Variable
1. Clothing
2. Takeout/Restaurants
3. Entertainment Subscriptions
4. “Random Life Stuff”
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The high cost of childcare often dictates whether or not a
member of the household can “afford” to work. When people ask
me “how I do it all” as a working mother, the answer is simple:
I spend an extraordinary amount of money on childcare.
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Fixed Expenses:
Sample McPerson
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1. Rent / Mortgage
$1200/mo
2. Real Estate Taxes (if applicable)
N/A
3. Renters or homeowners insurance
$120/mo
4. Utilities (gas, electric, cell phone, internet)
$400/mo
5. Health Insurance
$500/mo
6. Student Loan Payments
$400/mo
7. Childcare
N/A
8. Transportation (car, gas, parking, taxi)
$300/mo
9. Car insurance (if applicable)
$250/mo
10.Groceries
$800/mo
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Monthly Expenses: $3,970 = Annual Cost of Living: $47,640
Note that the cost of living calculations here do not include variable expenses so this is truly the
very minimum Sample McPerson would need to earn in order to pay their bills.
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Your “Required Salary”
& “Desired Salary”
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Required Salary
What you need to earn in order to not go into debt.
Annual Cost of Living + Enough for Taxes
Desired Salary
What you want to earn in order to live the lifestyle you want to live.
Annual Cost of Living + Enough for Taxes + Savings + Fun Life Stuff
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Everyone should know both their “Required Salary” and
“Desired Salary”—they are useful tools for establishing your
rates and allow you to draw a hard line when it comes to your
pricing standards.
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Annual Cost of Living
÷
1 − Tax Rate (in decimals)
=
Minimum Required Salary
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$47,640
÷
1 − .30
=
$68,057
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Annual Cost of Living: $47,640
+
Federal/State Taxes: $20,417
These totals are calculated based on 30%
combined federal and state income taxes.
Required Salary: $68,057
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If your “Required Salary” is significantly higher than what you
believe industry standards dictate based on your level of
experience and location, you may want to consider trying to
lower your monthly expenses. Adjusting your housing scenario
is often the most effective tactic.
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Have realistic expectations for what your “Desired Salary” can
be. There is usually a maximum you can expect to earn based
on where you live and at what stage you are in your career.
If you need a place to start, multiply your “Required Salary” by
1.5 to create a “Desired Salary.” You can also use specific
financial goals such as the amount you want to save annually.
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Annual Cost of Living + Savings + Vacation Budget
÷
1 − Tax Rate (in decimals)
=
Desired Salary
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Annual Cost of Living: $47,640
Savings: $10,000
Vacation Budget: $1,000
+
Federal/State Taxes: $25,131
These totals are calculated based on 30%
combined federal and state income taxes.
Desired Salary: $83,771
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Sample McPerson
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Required Salary: $68,057
Desired Salary: $83,771
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Calculate Your
Secret Hourly Rate
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Calculating your hourly rate is important whether or not you
plan to charge hourly. It can help you quote projects, figure out
your “get out of bed” price—the minimum you need to get paid
in order to take on a project—and it also helps you confront bad
business practices when you take on cheap work.
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Secret Hourly Rate = Gross Income ÷ 52 (weeks) ÷ 20 (billable hours)
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Secret Hourly Rate = Gross Income ÷ 52 (weeks) ÷ 20 (billable hours)
Plug your “Required Salary” in the Net Income slot and you’ll establish your Required Hourly Rate.
Plug your “Desired Salary” in the Net Income slot and you’ll establish your Desired Hourly Rate.
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Secret Hourly Rate = Gross Income ÷ 52 (weeks) ÷ 20 (billable hours)
There are 52 weeks in a year, so this helps you figure out your weekly income.
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Secret Hourly Rate = Gross Income ÷ 52 (weeks) ÷ 20 (billable hours)
While you likely work 40+ hours per week, most professionals can only expect to bill around 20-25
hours per week. Working with a reasonable estimate for billable hours is extremely important.
Running a business requires a lot of work that isn’t directly billable but helps keep the business
viable. Examples of this work are fielding potential clients, managing email and phone calls,
bookkeeping, promoting your businesses via social media, updating your website, etc.
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Designer with 5-10 years experience in mid-sized US city
Required Salary: $60,000
Required Secret Hourly Rate: $60 (57.692)
Desired Salary: $90,000
Desired Secret Hourly Rate: $85+ (86.538)
Designer with 5-10 years experience in San Francisco, CA
Required Salary: $120,000
Required Secret Hourly Rate: $115 (115.384)
Desired Salary: $240,000
Desired Secret Hourly Rate: $230 (230.769)
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Sample McPerson
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Required Secret Hourly Rate: $65
Desired Secret Hourly Rate: $80
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Quick Reference:
Common hourly rates* based on professional experience:
5 years experience or less : $50-$100/hr
5-10 years experience:
$100-$150/hr
10+ years experience:
$150-350/hr+
* for Graphic Design
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Using your Secret Hourly Rate
to Calculate Creation Fees
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Creation Fee = Total estimated hours of work × Secret Hourly Rate
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Calculate your Creation Fee using your “Desired Hourly Rate”
rather than your “Required Hourly Rate.” This allows you to
come down in price during negotiations. The distance between
your Desired and Required rates is your “wiggle room.”
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Accurately estimating hours for a project takes practice and
experience, but you can start by breaking down your creative
process into distinct stages.
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Commercial Lettering & Illustration:
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Step 1:
Sketches
Step 2:
Sketch Revisions
Step 3:
Round 1: Final Art
Step 4:
Round 2: Final Art Revisions
Step 5:
Round 3: Final Art Revisions
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Logotype Development
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Step 1:
Round 1: Broad Logo Exploration
Step 2:
Round 2: Narrow Logo Exploration
Step 3:
Round 3: Logo Refinements
Step 4:
Round 4: Final Logo Refinements
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These breakdowns can start to form your Scope of Work or
“SOW” that you will send to the client. You can include detailed
information about how many options you’ll be showing at each
round, and that information will help you calculate your hours
as well. You do not need to share your projected hours with
your client, but they can help you price each round of work.
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How usage fees are
calculated:
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In Creation + Usage pricing, use is broken out as its own cost.
If a client doesn’t pay for use, they are not allowed to use the
artwork even if they have paid you for the creation of the
artwork. Usage terms should be defined in your contract.
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Clients buy the rights to use your work
1. For exclusive or non-exclusive use
2. For a specific length of time
3. In a specific location
4. For use on specific media
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For exclusive or non-exclusive use:
1. Exclusive use: the artwork cannot be relicensed during the specified period of time
2. Non-exclusive use: the artwork can be relicensed to any other client
(though usually not a competitor) or used in any other context during the
specified period of time
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For a specific length of time:
1. 3 months
2. 1 year
3. 2 years
4. 5 years
5. “In perpetuity”
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In a specific location:
1. One City
2. Multi-City
3. Statewide
4. Multi-State
5. National
6. Multi-National
7. Global
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For different kinds of media:
1. A specific online medium
2. All online media
3. A specific print medium
4. All print media
5. In broadcast (tv/film)
6. On products / merchandise
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A sample brief:
We need you to create one full page advertisement for Well
Known Clothing Company, which will be printed in the March
issue of Nationally Distributed Magazine Company.
Price for: Creation + 1 month use in Nationally Distributed Magazine
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Clients often request buyout rights they don’t need.
We need you to create one full page advertisement for Well
Known Clothing Company, which will be printed in the March
issue of Nationally Distributed Magazine Company.
…and we need a buyout.
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What is a buyout?
A buyout means that the client buys the full rights to your artwork and becomes the owner of its
copyright. In some cases, like with logos, a buyout is necessary—logo clients need to own the
rights to the work in order to trademark it.
Buyout is the use equivalent of Exclusive In Perpetuity Global Rights in All Media
Clients often request buyout rights even when they very clearly don’t need them. Which is fine,
except buyout rights come at a very high cost that most clients are not willing to pay.
This presents a great opportunity for price negotiation.
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What’s the difference between “unlimited use” and a “buyout”
You can grant a client unlimited usage rights without transferring the copyright of your work.
This gives them the use that they want while also freeing you up to relicense the work later.
In this case you would likely establish that they have non-exclusive unlimited usage rights or that
they can pay for a period of exclusivity.
Sometimes clients use “unlimited use” and “buyout” interchangeably, but make sure the terms
are clear in the contract.
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A client may want “presentation only” rights
“Presentation only” rights means that the client can only show the artwork in-house for
the purpose of getting project approval. This is essentially a paid version of “spec” work.
Agencies often hire multiple people to create work, and pay them for artwork creation + a very
small usage fee. If the work is chosen to be used in the campaign, the agency would then purchase
additional required usage.
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A note on “spec” work
Working on “spec” means working for free and being paid only if your work is chosen. Working on
“spec” is a toxic practice, negatively impacting individual artists/designers and small agencies.
Larger agencies can afford to gamble with the wages of low-paid workers and perpetuate the
practice of “spec” work in advertising and design.
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Putting it all together:
Pricing Different Creative Work
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Pricing Editorial Illustration
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Unlike other commercial illustration, editorial rates are fairly
fixed and are sadly not often updated to follow inflation.
Editorial projects can be the bread-and-butter of an illustrator’s
earnings, but an illustrator needs to take on a lot of work in
order to earn a sizable income from editorial work alone.
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Small Spot
Quarter Page
Half Page
Headline
Newspaper
$150-250
$250-350
$350-500
$150-500
Regional Magazine
$250-350
$350-500
$500-650
$150-800
National Magazine
$350-500
$350-500
$500-800
$150-1000
Full Page
Full Spread
Cover
Newspaper
$800-1000
$1200-1500
$1200-1500
Regional Magazine
$1000-1200
$1500-2000
$1500-2000
National Magazine
$1000-1500
$2000-2500
$2500-4000
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Pricing Book Cover Design
& Interior Illustrations
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For book design and interior illustrations, the “importance” of
the book plays a role in the budget. Importance is tied to the
size of the initial print run—anywhere from 5,000 copies to
millions. Pricing for Creation + Use is possible, but more often
than not publishers insist on Work for Hire contracts. Push back
if you can, but know that sometimes edits cannot be made.
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Small Spot
Quarter Page
Half Page
Headline
Book, Small Title
$100-250
$200-350
$300-450
$500-1000
Book, Medium Title
$150-300
$250-400
$350-550
$750-1200
Book, Big Title
$200-350
$300-500
$400-550
$1000-1500
Full Page
Full Spread
Cover
Full Jacket
Book, Small Title
$500-1000
$500-1000
$1200-1500
$1500-2000
Book, Medium Title
$750-1200
$750-1200
$1500-2500
$2500-4000
Book, Big Title
$1000-1500
$1000-1500
$2500-5000
$3500-6000
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Pricing Commercial
Illustration & Lettering
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When pricing for commercial illustration and lettering, you can
employ the Creation + Use model and calculate the Creation
Fee using your Secret Hourly Rate. Each round is broken out
into its estimated hours based on work being performed.
If a client has a limited budget, you can limit the amount of
work you show and rounds you present.
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The following pricing would be for a single image created for
use in an advertising campaign. When commissioned to create
multiple pieces of artwork for a campaign, clients often expect
a “bulk discount” on your work.
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Number of Options Created × Estimated Hours per Option × Secret Hourly Rate
=
Cost of Each Round of Work
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(1 final, 1 hour)
Final Revisions R3
(1 final, 2 hours)
Final Revisions R2
(1 final, 3 hours)
Final Revisions R1
(1 final, 8 hours)
Round 1 Final
(3 sketches, 1 hours each)
Sketch Revisions
(5 sketches, 2 hours each)
Sketch Round
Secret Hourly Rate
Total Creation Fee
(27 Hours)
$50/hr
$500
$250
$400
$150
$100
$50
$1450
$100/hr
$1000
$500
$800
$300
$200
$100
$2900
$150/hr
$1500
$750
$1200
$450
$300
$150
$4350
$200/hr
$2000
$1000
$1600
$600
$400
$200
$5800
$250/hr
$2500
$1250
$2000
$750
$500
$250
$7250
$300/hr
$3000
$1500
$2400
$900
$600
$300
$8700
Full Exploration
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(1 final, 1 hour)
Final Revisions R2
(1 final, 3 hours)
Final Revisions R1
(1 final, 8 hours)
Round 1 Final
(1 sketch, 1 hours each)
Sketch Revisions
(3 sketches, 2 hours each)
Sketch Round
Secret Hourly Rate
Total Creation Fee
(19 Hours)
$50/hr
$300
$50
$400
$150
$50
$950
$100/hr
$600
$100
$800
$300
$100
$1900
$150/hr
$900
$150
$1200
$450
$150
$2850
$200/hr
$1200
$200
$1600
$600
$200
$3800
$250/hr
$1500
$250
$2000
$750
$250
$4750
$300/hr
$1800
$300
$2400
$900
$300
$5700
Limited Exploration
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+ Buyout
(Limited Applications)
+ 5 Year Use
(Limited Applications)
+ 2 Year Use
(Limited Applications)
+ 1 Year Use
Secret Hourly Rate
$50/hr
$1500
$2500
$3500
$5000
$100/hr
$1500
$2500
$3500
$5000
$150/hr
$1500
$2500
$3500
$5000
$200/hr
$1500
$2500
$3500
$5000
$250/hr
$1500
$2500
$3500
$5000
$300/hr
$1500
$2500
$3500
$5000
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Adding Use
Use is generally not adjusted based on the
Creation Fee, though some artists do calculate
buyout by multiplying the Creation Fee x 2.
I would consider these numbers “minimal use”
for each time frame. To scale these numbers
based on how extensive the use is, you can
multiply them by 1.5x, 2x, 2.5x, 3x, or 4x.
See the chart on page 22.
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Secret Hourly Rate
Creation + 1 Year Use
Creation + 2 Year Use
Creation + 5 Year Use
Creation + Buyout
$50/hr
$2950+
$3950+
$4950+
$6450+
$100/hr
$4400+
$5400+
$6400+
$7900+
$150/hr
$5850+
$6850+
$7850+
$9350+
$200/hr
$7300+
$8300+
$9300+
$10,800+
$250/hr
$8750+
$9750+
$10,750+
$12,250+
$300/hr
$10,200+
$11,200+
$12,200+
$13,700+
Full Exploration Pricing Options
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Secret Hourly Rate
Creation + 1 Year Use
Creation + 2 Year Use
Creation + 5 Year Use
Creation + Buyout
$50/hr
$2450+
$3450+
$4450+
$5950+
$100/hr
$3400+
$4400+
$5400+
$6900+
$150/hr
$4350+
$5350+
$6350+
$7850+
$200/hr
$5300+
$6300+
$7300+
$8800+
$250/hr
$6250+
$7250+
$8250+
$9750+
$300/hr
$7200+
$8200+
$9200+
$10,700+
Limited Exploration Pricing Options
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Additional Fees
1. Rush Fee
The Rush Fee is calculated based on how much faster the client needs the work from 10%-100%
2. Alternative versions of the art
Sometimes alternate versions of the art must be created in different aspect ratios. You can charge accordingly
based on how much of the original work you can reuse in the new formats.
3. Social Media Posting
Are they treating you like an influencer? You should be paid like one.
4. A “Hassle Tax” (also known as “The Asshole Tax”)
Sometimes you just know people are going to be hard to work for—you can raise your rates by 15-25% to
make the hassle feel worth it.
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Pricing Murals
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For murals, there are three distinct stages to price for:
creation (the art itself), installation, and extended use
(optional). Keeping the installation separate allows you
to hire sign painters to install or create a mural in a
location you cannot travel to.
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(1 final, 1 hour)
Final Revisions R3
(1 final, 2 hours)
Final Revisions R2
(1 final, 3 hours)
Final Revisions R1
(1 final, 8 hours)
Round 1 Final
(2 sketches, 1 hour each)
Sketch Revisions
(5 sketches, 2 hours each)
Sketch Round
Secret Hourly Rate
Total Creation Fee
(26 Hours)
$50/hr
$500
$100
$400
$150
$100
$50
$1300
$100/hr
$1000
$200
$800
$300
$200
$100
$2600
$150/hr
$1500
$300
$1200
$450
$300
$150
$3900
$200/hr
$2000
$400
$1600
$600
$400
$200
$5200
$250/hr
$2500
$500
$2000
$750
$500
$250
$6500
$300/hr
$3000
$600
$2400
$900
$600
$300
$7800
Full Exploration
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(1 final, 1 hour)
Final Revisions R2
(1 final, 3 hours)
Final Revisions R1
(1 final, 8 hours)
Round 1 Final
(1 sketch, 1 hours each)
Sketch Revisions
(3 sketches, 2 hours each)
Sketch Round
Secret Hourly Rate
Total Creation Fee
(19 Hours)
$50/hr
$300
$50
$400
$150
$50
$950
$100/hr
$600
$100
$800
$300
$100
$1900
$150/hr
$900
$150
$1200
$450
$150
$2850
$200/hr
$1200
$200
$1600
$600
$200
$3800
$250/hr
$1500
$250
$2000
$750
$250
$4750
$300/hr
$1800
$300
$2400
$900
$300
$5700
Limited Exploration
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+ Buyout
(Limited Use - Multi-Year)
+ Extended Rights
(Limited Use - 1 Year)
+ Extended Rights
(10 hours)
+ Install
Secret Hourly Rate
Calculating Install Fees
and Adding Extended Use
$50/hr
$1000
$1500
$3500
$5000
$100/hr
$2000
$1500
$3500
$5000
$150/hr
$3000
$1500
$3500
$5000
$200/hr
$4000
$1500
$3500
$5000
$250/hr
$5000
$1500
$3500
$5000
$300/hr
$6000
$1500
$3500
$5000
The Dark Art of Pricing
For murals, you must clearly communicate
how much it will cost to install or that
installation is separate of your budget if you
are using a sign painter. If using a sign painter,
get a quote before you submit numbers so the
client isn’t blindsided.
If a client wants to use the art from your mural
in other ways, they should pay for rights to do
so. Even if the art is on a building they own,
they don’t own the right to reproduce it
elsewhere without your consent unless your
contract specified “Work for Hire.”
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(Limited Applications)
Creation
+ Install
+ Buyout
(Limited Applications)
Creation
+ Install
+ 5 Year Use
(Limited Applications)
Creation
+ Install
+ 2 Year Use
(Limited Applications)
Creation
+ Install
+ 1 Year Use
Secret Hourly Rate
Creation + Install
$50/hr
$2300+
$3800+
$4800+
$5800+
$7300+
$100/hr
$4600+
$6100+
$7100+
$8100+
$9600+
$150/hr
$6900+
$8400+
$9400+
$10,400+
$11,900+
$200/hr
$9200+
$10,700+
$11,700+
$12,700+
$14,200+
$250/hr
$11,500+
$13,000+
$14,000+
$15,000+
$16,500+
$300/hr
$13,800+
$15,300+
$16,300+
$17,300+
$18,800+
Full Exploration Pricing Options
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(Limited Applications)
Creation
+ Install
+ Buyout
(Limited Applications)
Creation
+ Install
+ 5 Year Use
(Limited Applications)
Creation
+ Install
+ 2 Year Use
(Limited Applications)
Creation
+ Install
+ 1 Year Use
Secret Hourly Rate
Creation + Install
$50/hr
$1950+
$3450+
$4450+
$5450+
$6950+
$100/hr
$3900+
$5400+
$6400+
$7400+
$8900+
$150/hr
$5850+
$7350+
$8350+
$9350+
$10,850+
$200/hr
$7800+
$9300+
$10,300+
$11,300+
$12,800+
$250/hr
$9750+
$11,250+
$12,250+
$13,250+
$14,750+
$300/hr
$11,700+
$13,200+
$14,200+
$15,200+
$16,700+
Limited Exploration Pricing Options
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Pricing Logos
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Logo and branding work follows the Creation + Use
pricing model but always assumes buyout. Clients must
own the rights to the work in order to trademark their
logo and any other branding elements you create.
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(1 Option, 2 hours)
Round 4:
Final Revisions
(3 hours)
Round 3 Deck
(3 Options, 2 hours each)
Round 3
(2 hours)
Round 2 Deck
(5 Options, 3 hours each)
Round 2
(5 hours)
Round 1 Deck
(7 Options, 5 hours each)
Round 1
Secret Hourly Rate
Total Creation Fee
(69 Hours)
$50/hr
$1750
$250
$750
$150
$300
$150
$100
$3450
$100/hr
$3500
$500
$1500
$300
$600
$300
$150
$6900
$150/hr
$5250
$750
$2250
$450
$900
$450
$300
$10,350
$200/hr
$7000
$1000
$3000
$600
$1200
$600
$400
$13,800
$250/hr
$8750
$1250
$3750
$750
$1500
$750
$500
$17,250
$300/hr
$10,500
$1500
$4500
$900
$1800
$900
$600
$20,700
Full Exploration
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(1 Option, 2 hours)
Round 4:
Final Revisions
(1 hour)
Round 2 Deck
(2 Options, 3 hours each
Round 2
(3 hours)
Round 1 Deck
(3 Options, 5 hours each)
Round 1
Secret Hourly Rate
Total Creation Fee
(29 Hours)
$50/hr
$750
$150
$300
$50
$100
$2900
$100/hr
$1500
$300
$600
$100
$150
$5800
$150/hr
$2250
$450
$900
$150
$300
$8700
$200/hr
$3000
$600
$1200
$200
$400
$11,600
$250/hr
$3750
$750
$1500
$250
$500
$14,500
$300/hr
$4500
$900
$1800
$300
$600
$17,400
Limited Exploration
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For the buyout for logos, let’s use a different calculation
method: assuming the total cost of the logo is the
Creation Fee x 2. The buyout will still be scaleable further
using the formula from page 22, but this will give us a
new baseline buyout price.
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Baseline Buyout
Secret Hourly Rate
Creation Fee
Full Exploration
(Creation Fee)
Total Baseline Fee
$50/hr
$3450
$3450
$6900
$100/hr
$6900
$6900
$13,800
$150/hr
$10,350
$10,350
$20,700
$200/hr
$13,800
$13,800
$27,600
$250/hr
$17,250
$17,250
$34,500
$300/hr
$20,700
$20,700
$41,400
Full Exploration Pricing Options
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What You Charge
Limited Exploration
Hourly Rate
Full Exploration
Hourly Rate
(29 Hours)
(69 Hours)
$500
$17.24
$7.25
$1000
$34.48
$14.49
$2000
$68.97
$28.99
$5000
$172.41
$72.46
$8000
$275.86
$115.94
$10,000
The Dark Art of Pricing
$344.83
$144.93
Logo Pricing
Reverse Engineer
You might be shocked by how high some of
the numbers are for logo work—let me show
you what happens when you don’t charge
enough for your work. Using our estimated
hours for the Limited and Full exploration, you
can see your hourly rate based the “What You
Charge” column on the left.
You can see that the numbers become
favorable as you go past $5-10,000, which is
why many professional designers consider this
to be the minimum fee for a logo.
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When designing logos, there are often additional
branding elements that need to be created as well as
brand guideline books which help outline how best
to use the logo you’ve created. These can be priced
separately using our “Secret Hourly Rate” formula.
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(Per Icon, 2 hours each+)
Icon Set
(20 hours)
Monogram
Exploration
(At least 5 hours)
Small Scale Logo
(At least 5 hours)
Pattern/Graphic
Library
(At least 5 hours)
Type Advising
(Per Page, 5 hours each)
Brand Guidelines
Secret Hourly Rate
$50/hr
$250
$500
$250
$500
$1000
$100
$100/hr
$500
$1000
$500
$1000
$2000
$200
Additional
Branding Elements
For most additional branding
$150/hr
$750
$1500
$750
$1500
$3000
$300
elements you can use your Secret
Hourly Rate to calculate a fee based
$200/hr
$1000
$2000
$1000
$2000
$4000
$400
on how many hours you estimate
the element will take. For assets like
$250/hr
$1250
$2500
$1250
$2500
$5000
$500
monograms and icons, you can also
include a buyout price, essentially
$300/hr
The Dark Art of Pricing
$1500
$3000
$1500
$3000
$6000
$600
doubling these numbers.
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Pricing Other
Graphic Design Work
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Using your Secret Hourly Rate can be helpful to calculate
all sorts of design fees.
For example, the calculation used to figure out per-page
pricing for brand books would also give you accurate
pricing for magazine design and annual reports.
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Pricing Other
Creative Work
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While I have mostly given examples of Graphic Design,
Illustration, and Lettering—this pricing framework can
be used for any kind of creative work.
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Photography and illustration/lettering are extremely similar
industries, utilizing a creation + use model.
Web design (without development) often uses a “per page”
pricing model similar to annual reports or magazine design.
Ultimately you are calculating what you want your income
to be and engineering how to get there based on the value of
the work you take on.
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Pricing for
“Cool Projects”
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“Cool Projects” or projects commissioned by “Cool Clients”
often have lower budgets than you would expect and often
promise “cred” or “exposure” in lieu of part or all of the fee.
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“Exposure” is not transactional.
Even if you are working on a high visibility project for a highly visible client, the exposure you gain
will most likely not immediately translate to more work. If it does immediately get you work, that
work is likely to be similarly priced.
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Working for “exposure” takes patience and persistence.
It may take you years to see the benefits of the exposure you generated. Exposure from a single
project will only serve you for a limited period of time—once the project becomes “old work”, you
begin to be defined not by the work itself but by the amount of time between when you
completed that work and present day. This means that in order to reap the benefit of exposure
you must be continually generating it.
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Working for “exposure” requires privilege.
In order to lower your fees for “cool projects” and rely on exposure as a partial form of payment,
you have to have some level of professional privilege: consistent high paying work, enough money
saved, income from other sources, and the patience to wait out the benefits that my come from
the promised exposure.
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All “exposure” is not created equal.
There are times in which exposure is a real and tangible thing that you can accept as a form of
payment if you have the privilege to do so. In most cases though, the promise of exposure is
hollow and the practice of paying in exposure is problematic and toxic.
Artist partnerships offer a way to work for an agreed upon fee + exposure.
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Artist Partnerships:
1. Are mutually beneficial
2. Are still paid a fair rate
3. Credit the artist wherever the work appears
4. Showcase the artist on the company’s product/website/social media
5. Provide specific PR opportunities for the artist
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Get paid.
Establish when and how you will be paid
before the project starts.
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Ways to get paid:
1. At the end of the project
Good for projects with small budgets and short timelines.
2. A deposit (30-50%) at project start and the remainder at the end
Good for most clients.
Good for projects with shorter timelines (under 3 months)
Good if you have the savings to float you until the final payment
3. A deposit at the beginning and then payment after each phase
Good for larger clients and bigger budgets
Good for projects with longer timelines
Good if you need to be paid more frequently
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When to expect the money:
For smaller clients and when using your own contract, you can define when the payment must be
received. The standard is 30 or 60 days after receipt of invoice.
For larger clients and clients with elaborate payment systems, they define when the payment is
sent. This can be 60, 90, or 120 days after receipt of invoice. It’s important that you understand
this in advance so you can plan accordingly.
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Plan for the worst, hope for the best.
As a freelancer, it’s important to have 6-12 months of operating
costs saved up which acts as a buffer for late client payments,
slow months, and any other business hiccups. Get it in your
head that the work you are doing now will be paid 6 months
from now. If you don’t have this financial cushion, you will be
very stressed out all of the time.
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But what if I have no savings?
Most people begin freelancing while having some other form of steady income (or a very
supportive partner). There is no shame in keeping your full-time job, even if it isn’t in your field,
until you have the financial cushion to begin freelancing full-time.
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What if a client kills the project?
If you collected a deposit, that will often be your “kill fee” depending on how far along you are in a
project. If you haven’t separated out pricing for different rounds of work, 50% is a standard kill fee
but it must be specified in your contract.
You should be paid for the work you have performed.
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What if a client doesn’t pay you?
First assume good intent. Sometimes clients are very behind on email. Sometimes there is a
miscommunication between the creative team and the billing department. If your contact has
ghosted you, email or call the billing department directly.
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…and if they still don’t respond?
Time for strongly worded emails and passive aggressive cc’ing. “Loop in” other people on their
team or people from other departments whose emails you have. This is a shaming tactic, and can
be an effective way to get the ball rolling.
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…and if they still don’t respond or refuse to pay?
If it’s for a sizable amount of money—contact a lawyer. Collect your contract and all of your email
correspondence with the client showing approval of budget, artwork, etc. and share them with
your lawyer. It is incredibly important to receive approval from your client in written form in case
something like this happens. If they insist on giving feedback over the phone, follow up with notes
from the call and request that they write back to confirm that your notes are accurate.
You may eventually get paid or they may double down on ghosting you or refusing payment.
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…and if they double down?
Shame them relentlessly
on social media.
Joking/Not Joking
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You may be saying to yourself
“I am overwhelmed”
That was a lot of information.
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Let’s Review
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132
Pricing appropriately matters for you and for the greater
design community. We have to work together to fortify
industry standards for pricing.
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133
Discuss pricing with clients confidently—you are
speaking your truth and communicating facts about
the value of your work.
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134
Always have a contract and review terms of the
project before commencing. Never sign a contract that
includes terms you don’t agree with.
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Figure out what pricing model works best for your
business based on the kind of work you take on.
Hourly rates, day rates, and creation + usage each
have pros and cons.
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Calculating your hourly rate can be useful whether or not
you plan to charge hourly. A “Secret Hourly Rate” can
become part of a framework for calculating project fees.
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Know your “Required” and “Desired” salaries and rates,
and use them to create pricing standards for your
business. If you want to break your standards, do so
knowingly and intentionally.
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Understand that each client has a different process for
paying people and that sometimes it might take a while
to get paid. Plan accordingly by creating a savings buffer
to get you through lean times.
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Thank You!
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140
Colophon
This pdf was developed for Jessica Hische’s Dark Art of Pricing seminars given in November of
2020. The formulas you see throughout are the intellectual property of Jessica Hische and were
developed for the purpose of the seminar. By purchasing a copy of this pdf, you own a personal
license to view it but are not allowed to re-distribute or resell this pdf or any of the pages within it.
Design educators are welcome to teach this pdf to their students in a classroom setting. To share
copies of this pdf with your students, contact me for a discount code for your students to purchase
their own copy.
The fonts used throughout are Whitney by Hoefler & Co. and Schtudio Sans by Jessica Hische.
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