Please help: Pricing question/possible undercutting...

[aries75]

Hello,

As a budding freelance Flash animator, I've recently run into a situation which sounds awfully "fishy", and I would really appreciate advice from others who may be able to tell me what it all means...

I had entered a bid for work on an animation project. Initially, I set my rate at $35/hr and said the final price would depend on how elaborate they wanted the final animation to be (the person I was dealing with needed to get final approval from higher-ups for total cost). I'm hesitant to go into too much detail on a public forum, but the gist of the project was as follows: the animation was to be a two-part sequence, where in the first part, a large object is damaged by smaller objects that fly into it and break off little pieces upon impact. The second animation shows these small objects being intercepted by other objects which hit and destroy them before they have a chance to reach their target (like I said, I can't give any more details beyond that). I was shown fairly detailed illustrations of how all the elements should look, and based my fee on how much effort was required to do the animation to the level of those illustrations...though I did say that I could do a less detailed animation if desired.

Anyway, when I asked whether or not I had approval to go ahead, I was told that another person (a student) offered to do the entire project for just $150! (this is Canadian dollars, as was my fee...FYI, Flash costs between $700-$800 Canadian at current xchange rates).

Please help me out here--was my rate unreasonable given the nature of the project? Is it commonplace for others to do projects of that nature for that low a fee? I said that I had set my initial fee taking software cost into account, and that this cost would only be irrelevant to fee setting if a) the person has access to a licensed copy of Flash that was paid for by someone else, i.e. another employer or b) they're violating the Flash license agreement by using a "crack" or a cheaper educational version. The person I was dealing with told me point-blank that this was "none of their business"--if the other bidder was doing something illegal, it was the bidder's risk not their's, and that all they were concerned with was the final product, not how it was generated.

I'm very confused about all of this and would deeply appreciate advice to avoid this kind of fiasco in the future.

[jkinstle]

I guess it depends on just how 'budding' an animator you are as to whether a $35/hour rate is reasonable or not. A lot of people become very uncomfortable if you can't give them at least a probable final cost from your hourly pricing.

There's always somebody out there willing to do the work really cheap for practice, entertainment value, or just a misguided desire to starve the legitimate professionals to death. Clients who take such bids may come to regret it, but there's not a lot you can do about beyond educating the client on the difference in service and quality versus the difference in price. There are also clients who will never care, no matter what you teach them.

The cost of your tools (in this case, your Flash program) is generally not something you can pass on directly and entirely to a client. At best, you should consider amortizing those costs (charging each client a little bit for it built into your pricing structure) across a number of jobs. Think about it: how much trust would you have in a carpenter who was going to make you buy him a saw? You should probably just consider that a cost of doing business and not try to directly bill anyone.

One other thing. If your client went to a lot of trouble to develop detailed mock-ups of the graphics, you should have just priced out at developing those graphics. You might mention the possibility of lowered costs if you didn't render the graphics exactly as specified, but you shouldn't directly challenge something the client has spent so much time on in the initial quote process unless you do it very, very diplomatically.

Also, you might want to reconsider going into depth on how the other bidder is likely breaking the law. Pointing fingers at the competition is generally not a successful sales tactic. It often comes across as blame shifting.

Mind you, these are all points to consider for the future. I don't think your rate was necessarily out of line, and I don't think you should let this one setback get to you too much. Go forth and bid again, man.

[SturmTiger]

This is precisely why I'm getting out of the business. I'm sick of people telling me they've "heard" of people who will do it for half as much...or worse, for free to build up their portfolio.

The market is saturated. I've read "Who Moved My Cheese" and now I'm putting the principles into effect and going into other things. I'll still give out my biz card when I go to network mixers but I'm not actively looking for work anymore. This is all too much to take.

[aries75]

[QUOTE]Originally posted by jkinstle
I guess it depends on just how 'budding' an animator you are as to whether a $35/hour rate is reasonable or not.

I've taken college courses in classical animation, 3D computer animation, and flash. I also used to work as a software instructor at a community college (10-month contract position, I taught an introductory course in the same 3D software I had certification in).

"A lot of people become very uncomfortable if you can't give them at least a probable final cost from your hourly pricing."

At first, when I saw the illustrations, I thought something highly elaborate, complex and detailed was desired, so I quoted an approx. final cost of $1000 (roughly 40 hrs work). I was told that was too high and I should try to cut corners, i.e. not produce something that would take that much time. So I revised it down to in the neighborhood of $300-$500, depending once again on how they told me they wanted it to look.

"The cost of your tools (in this case, your Flash program) is generally not something you can pass on directly and entirely to a client."

I didn't expect to entirely recouperate the cost on this one project, I mentioned only that it played a role in my fee (just as stores factor in how much they pay for merchandise before they sell it). I do realize in hindsight it was probably a mistake to mention this.

"One other thing. If your client went to a lot of trouble to develop detailed mock-ups of the graphics, you should have just priced out at developing those graphics."

This is what I did in the beginning, and as I said above I was told to cut corners, and that the "story" of the animation was more important than how detailed it was.

"Also, you might want to reconsider going into depth on how the other bidder is likely breaking the law. Pointing fingers at the competition is generally not a successful sales tactic. It often comes across as blame shifting."

I see this now, although I never said outright the other person was using pirated software (for all I know, maybe they're using something really cheap like Swish or maybe they work for another company who bought Flash for them). I just threw it out there as one of a number of explanations for why their price was so much lower than mine, but yes, you're right, even that can be seen as blame shifting.

Thanks very much for your input; I hope the further details I've provided give a clearer picture of the situation...if you can think of anything else as a result, I'm very open to hearing it.
[Edited by JabezStone on 03-22-2002 at 07:12 PM]

[tutash]

I would tell them to have it done for $150, if they want $150 results. Explain that the reason you can charge $35/hr is because your stuff is so excellent. Also consider that this client is f*cking with you by saying a student can do the work. You are not getting the respect you deserve as a member of the business community.

In summation:

If you let them think that you are some guy who can do flash, instead of a professional service provider, they will treat you like some guy. (some guy) == (some student) to them. both can do flash. get me?

tutash

[aries75]

Oh yes, I "get" what you're saying Since this sorry episode, I've made a mental note to myself to avoid "cheap" clients like the plague--I even had this one tell me that they didn't care if the $150-charger was using a pirated version of flash; all they cared about was getting the final product, not how it was produced. If that isn't lack of respect for true professionals, I don't know what is (I mean think about it--if all companies took this attitude, they'd deliberately search out students running cracks for cut-rate prices and put legitmate professionals out of work).

[nocrapchurch]

This is a very cut throat business we are involved in and its even worse because you don't always see who you're dealing with. Everyone wants to work from home and everyone wants to pay as little as possible.

I've learned to quit worrying about being underbid, because its going to happen all the time. You can't avoid it.

Here's what you're competing against:

Kids.

Here's what they have:
A nice computer paid for by daddy.
A cable modem paid for by daddy.
An office paid for by daddy (their bedroom).
Food paid for by daddy.
Stolen software.
All the time in the world.

They have no bills, no responsibilities, and no taxes. There's really no way to compete except by doing work better than them. This is not always easy, but its the only way.

To avoid them, I have moved into a lot of database work which is way over most of these kids. People are willing to pay for it.

aries75, sounds like to me you were offering a very reasonable price.

-scott
http://www.scottmanning.com/