Deciding on a fee structure is an important business decision for freelance commercial writers. Should you charge an hourly fee? A flat project rate? Something else?
In response to a reader question, The Well-Fed Writer’s Peter Bowerman and Jennifer Mattern share their thoughts on freelance writing rate structures.
Hourly Fee or Flat Fee?
This is the question that came in from a Well-Fed Writer reader:
Q: How do you feel about hourly vs. flat-fee work? I tend toward flat-fee myself; I feel like the aggravation factor of having to track my hours is annoying. And I think clients like a flat fee because it helps them budget. But what do you think? Which is better?
Peter Bowerman: In the overwhelming majority of cases, you really don’t have a choice except to go with a flat fee. Very few clients say, “Just keep track of your hours,” unless you’ve had a long-term and predictable relationship with them. And as you point out, they want to be able to budget. With those flat fees, you’re still basing your calculations, obviously, on your hourly rate, but that’s hidden from the client. So, it’s rarely a case of being able to decide, which is better; you’ll usually be forced to go with the one.
Jennifer Mattern: My recommendation is almost always to go with a flat fee over an hourly fee. I strongly believe freelance writers should consider having a target hourly rate for their knowledge only. Then use that number to set project fees based on how long you expect them to take. Hourly fees can pit a client against a freelancer because the client is incentivized to push for a rushed job to save money. You avoid that with project fees. And, like you noted, flat fees help clients budget. You can always include terms that cover scope creep. But in the end, it helps you as a freelancer learn to better estimate project timelines too.
More Freelance Fee Structures
Hourly fees and flat fees aren’t your only options as a freelance commercial writer. While flat fees can make the most sense for most copywriting or business writing projects, you might come across other rate structures. For example:
Per-Word Rates: These rates are more common in journalism and magazine writing, but you’ll sometimes find clients paying per-word rates for business blogging or some forms of copywriting.
Commission Rates: This rate structure might come up with direct response copywriting. You’ll generally earn a flat fee, but you might be paid an additional commission based on conversions.
Retainers: This is when you’re paid up-front to commit your time to a client. For example, a client might pay a certain amount at the start of the month to cover X hours… if they need them. If the client doesn’t use all the hours, you keep the full retainer. If they need more work, they pay extra on top of the retainer. The retainer is to guarantee your availability for the amount of time or work agreed upon.