Get the FREE Freelancer’s ToolkitGet the free toolkit!

Why I Don’t Have Set Prices: A Different Way to Freelance

There are other models of business being used out there in this wild world, beyond value-based-pricing and productizing services. I’m going to explain one that I used, why I did so and then show you how.

The gift-economy is one such model.

What is the gift economy?

Gift-economy is a term that brings subjects to mind like; “sharing/collaborative economy (Airbnb, Uber)”, “tiny houses” or “farm sharing”. Those wouldn’t qualify though because they have a set price.

You and the client enter an agreement where payment is based on what they feel is reasonable depending on the results and the process. Of course you can provide a “typical” amount so the client has an idea, but if they are happy, like a good tipper, you will be surprised at how it can work out.

When I’ve participated, the exchange has been service for money, with the exception of a carved sign and cutting board payment. Service for money is generally what this article will discuss.

I’m not alone in this space. Here are three web-related companies operating under the gift-economy:

  • Gift Economy Websites: wrote the article that set off my interest in the gift.
  • 8K: Polish design firm offering limited projects  (logo, small designs, naming, slogan) available in the gift. They frame pricing by showing what others paid. “At the moment, the average payment for one design in US dollars is $142”.
  • Jenny Rydén: Swedish web design/developer running solely in the gift. (PS: from google translate and Jenny, I learned the Swedish the word “gift” can mean either Poison or Married. what? )

My Experience

The timing wasn’t ideal for my first gift-economy endeavor. I was working a job that I barely tolerated in Rhode Island when my girlfriend and I decided we wanted to move to Vermont. Moving is expensive, so I looked to my freelance game: my game was sparse. Any extra money would be graciously welcomed padding as I looked for something steady up north.

Our move coincided with my discovery of Charles Eisenstein’s work, which is an antidote to cynicism about climate change, capitalism and dominant norms. This was my introduction to the gift-economy.

The concept; “you pay what you feel is right, I trust you. I’ll work my services to your business, you’ll trust me”, resonated deeply and I was anxious to try it out. The refrain from using a contract was alluring too.

The pressure of moving and a new business model made me more nervous than usual about the proposal I was working on. It was a warm lead from a friend. Keith, the potential client, and I hadn’t talked on the phone yet.

I nervously hit send to a gift based proposal for a website redesign.

He called me immediately. At 9:30 AM, I walked out the back door of work to a frozen, zero-degree parking lot and hit accept. He was in. My gut decision was validated.

He signed on quickly because the business landscape was changing.

His was irritated in the decline of customers not picking up the phone to place orders. More and more preferred online forms.

The gift-economy made business personal again, breaking the Godfather axiom.

We went on to do multiple projects and became good friends. This is a byproduct of doing business like this.

Once they sign on, there is immediately a huge amount of trust between parties.

You each take a leap into the unknown. Trust can come later in projects, but I can tell you that it’s a very nice way to start!

This all sounds good, right? but how can I try it without disrupting my well-oiled systems?

When writing the gift proposal for Keith, I used the bulk of one of my standard proposals. Try changing as little as possible to reframe your proposal. Mine needed an adjustment, not an overhaul.

These pillars stayed;

  • framed how the project would help his business succeed
  • restated his problems and how my solutions would fix them
  • rough milestones and timing
  • what to expect from me
  • what to expect from him
  • a range to reference the standard cost of this sort of project
  • specifically;
    • “You are welcome to send a good faith deposit to get the project started.”
    • “I design your website as a gift, and you give me something back that you feel is fair. What you give depends on your experience during the process and with the final outcome. It is a pricing model built on trust and gratitude. In the end, we should both feel as we were treated fairly.”

For more, here is a great article on more details of running a gift based business.

Broaching this topic can shake people up. It can call to question deeply held beliefs about how the world works. It’s your responsibility to offer information and field questions.

I suggest having PDFs at the ready, like this one, and links on the topic, see below if you want to learn more.

Videos

This may still seem wacky.

I understand that. It’s just one story of a freelancer and a happy client. I have lost many gift-proposals along the way and I’m not saying it’s a magic bullet to fix freelancing woes. Sneaking cautiously out of your comfort-zone or violently shaking things up can be good things.

For me, it was a shake up, and in hindsight, an answer to the question, what can I do in a world that seems to be falling apart?

Please let me know if you try this or want to!

“Trust people — they’ll surprise you.”

— Ron Shaich, co-CEO and founder, Panera Bread (after opening several locations featuring gift economy pricing)

Wes Carr Wes loves solving problems with design. He lives in Burlington where he builds and designs sites for an in-house team and walks up and down mountains. On the side he offers Itero, an ongoing ux service in the gift. The gift-economy is a pricing model built on trust and gratitude. Something the world could use more of. Itero is for those wanting to continually optimize their site without hiring an expensive ux pro. Find him on Twitter.

SIGN UP
+ get the FREE Freelancer’s Toolkit including:
✓ From Last Corporate Day to a Month of 5k
✓ How to Get to Steady
✓ 4 Steps to your First (or next!) Passive Income Stream Workbook
✓ Daily advice, tips & inspiration

Yes, please!

{ 7 comments… add one }
  • I’ve only just recently heard about this and it definitely pulled my interest! My sister and I operate in the health and fitness industry so I wonder if it would have the same effect as it does in more traditional “freelance” industries? Thanks!

    • wes

      Hi Tiffany, I remember listening to an SPI podcast on trying this model, they call it ‘pay what you want’, in a fitness niche. Maybe you will find it helpful: http://www.smartpassiveincome.com/pay-what-you-want-hybrid-athlete. I am sure you can find ways to experiment with the philosophy in teeny-tiny ways for your business, at first. Start to small to get a taste of trust 🙂

  • WOW! So interesting! I’ve never heard of this methodology before.

    I think it would take some getting used to on my part, and trusting that clients won’t be undercutting my services.

    Do you find that the majority of clients pay a fair price, or over what you expect?

  • Thank you for sharing your pricing mentality! I have recently launched a Sensory Design Firm and I am finding it impossible to place a dollar amount on my potential clients’ sight, sound, smell, taste and touch experiences. I am now seriously considering adopting the gift-economy pricing structure because the model encompasses my inclination to believe in the goodness of people, while also allowing each project to be independently valued. My goal is to empower every client through customized engagement of each sense. How am I able to measure this service through a fixed dollar rate?

    While I find the system extremely appealing, when I take on a project, regardless of its level of priority, my mantra is always that if I am going to do something, then I am going to fully commit to reaching the project’s highest potential. This has led to everything from over-the-top office birthday party decor to my more recent issue of providing a full brand identity to Initial Consult Meetings.

    I’m in the process of being more realistic with my prioritizing and I am wondering if you have any advice for my balancing of workflow with potentially adopting gift-economy pricing?

Leave a Comment