I am a maker. I love to make new things and help other people follow their dreams. It does not matter if it is a home project or a design project I want to help. This being said I have an issue with people getting "deals."
Let's talk about pricing and ripping people off.
Why do I even care?
One of the things that have upset me since undergrad is this:
"Why don't people know what marketing and design worth?"
I think as an entrepreneur you need to be savvy in many areas. Not just specifically in your pursued path of business, but you need to be able to dabble in accounting, manufacturing (if applicable), customer service, and MARKETING. It is great that you have a thing you want to sell, and that you were brave enough to quit your job to pursue your dreams and sell your shit on the internet. However, don't for one second think that a designer that is charging you $100 for a logo is worth the price you pay.
I have struggled with pricing forever. There are some fantastic resources out there to help!
This is a problem. So I want to try to help out.
I purchased this book some time ago and it really has helped me figure out pricing structure and what certain things are worth. It also has a disclaimer that some of the prices may be different depending on market strength. You can't expect to get NYC pricing in Wichita KS... I would suggest buying this as an entrepreneur. It will give you a baseline of what you can expect to pay a professional.
Cheap - vs - Discount - vs - Under Paying
You are most likely underpaying someone, not "getting a great deal on a logo." Let me be more clear on the distinction. You are not getting a "deal" at all. You are getting a "cheap" logo. CHEAP. Not an amazing, well thought, perfectly crafted, timeless logo at a discount. You are getting recycled, half-assed, non-problem solved garbage.
Before you freak out; students are students, and professionals are professionals. I am not saying you cannot be a badass designer with experience and courage to do "different." However, an education really can help. When you learn the tenets of design, the focus of what makes things work and what doesn't, the theory behind consumer interaction with the brand and why it is working; these are the things worth spending more money.
When you are starting a bootstrap business, don't be an ass and pay some poor kid $250 for a seven-page website with an interactive form, matching print collateral and a Vignelli'n level logo. Know what it is worth to your business and start there. If you plan on selling your gizmo's online and want someone to make you a thing to sell on then do some quick maths.
I am not saying you cannot be a badass designer with experience and courage to do "different."
Business Income Model Maths
100% of my business will be held through this website.
If I make $45,000 the first year this thing is up without updates.
I should probably pay 20%+ to the poor sucker who will be designing, implementing, researching, taking the 6+ years of experience they have learned in the field of design to implement a functional brand and website...
If you cannot understand this crazy backward maths, maybe think about it in the rate of return. How much would you be willing to gamble for return? Let's just say your product is badass. Moreover, let's assume you know what you are doing. What if I told you to expect an 80% return on the initial investment... "WHAT?! That is crazy!" you say, "The national average for 2014 return on the S&P 500 was 13.69%." Well, you are right! That is a crazy thought, but if you did your research and understood your market, then you should understand that you will be able to recoup the expense in a matter of years if not months!
If you start with $10,000 -
And you spend some $5,000 on a website where ALL of your sales will come from.
Then you put the other $5,000 on a high yield bond...
At the end of the first year, as you start selling your badass product, you hope to enjoy the total income of some $25,000!
That'd be great! Sure it is your first year, and maybe you have not quit your full-time job yet. Check it out - You spent $5,000 on a killer website that engaged your audience, promoted your amazing product, helped you sell it right then and there. Who knows maybe next year you will have doubled your profits?!
What I am saying with all of this craziness is don't take what you spend on marketing for granted. If you are willing to pay for the yellow book because they have some guarantee on how many people will see your ad. You should feel the same way if not better about your content generation on your website, the overall design and image of your company, and the amazing testimonial videos of your clients!
Just be smarter!