If you look back through the comments on “Switch,” there seems to be an uneasy tension that arises whenever someone mentions working with freelancers living in less than first world countries and paying fees of $10- $15 per hour (or less).
You will usually hear statements like “you get what you pay for”, “you are taking advantage of it” or “you are devaluing the work of professionals in your own country”. These are classic defense statements.
The problem here comes from the globalization of the economy and the increasing internet-enabled population in the less developed countries. Many industries are being opened up to growing competition from all parts of the world.
And as a freelancer and business owner, you shouldn’t just fold your arms and say, “It’s not fair” … It is what it is, and only the most experienced freelancers will succeed to protect themselves and their business from this threat, and probably find a way to turn it to their advantage.
Therefore, the defensive statements will do you no good – rather, figure out how to turn the threat into an opportunity:
“You get what you pay for”
It’s easy to assume that if someone pays a designer $10 an hour, they get a far less “professional” design than $50 an hour. However, this is not always the case. There’s a very good reason why designers in some countries take so little fees – and it’s often related to the cost of living, not a lack of design skills or the quality of the work.
I’ve been traveling the world in the past 14 months while running a company from a lower-cost country and meeting global colleagues who deliver exceptionally high standards of work at a fraction of the cost of colleagues in the UK and US.
Freelancers who live in countries like Thailand, India, the Philippines, Africa, and elsewhere can afford to be billed $10-15 an hour and still manage to comfortably support their families. That’s absolutely not to say the quality of the work will be less than yours – why should it be? Seeing it that way is arrogant, ignorant, and presumptuous.
“You take advantage of it“
First, the people who claim so have probably never really worked with a foreign colleague – or ever asked them if they felt they were being exploited. I am a native Cameroonian and enjoy working with other Cameroonians when I can because in a way it gives me the feeling that I am giving something back. I’d rather support local businesses and entrepreneurs by using their services than throw money on a charity.
I once asked my Filipino VA about her thoughts on this subject. Here is her response:
“I always feel bad for the people who don’t like the idea of hiring third-world VAs just because they think low rates mean low quality work. …
When they feel hiring someone from a third-world country who offers little rates is synonymous with exploitation, my advice is why not work with one first?
Outsourcing or using labor from countries where the cost of labor is lower is nothing new – it has been in many industries for many years. That doesn’t mean it is right, but it has supported and fueled the overall growth of many economies – just look at India.
“You devalue the work of professionals in your own country“
Only if you let it; And this is where the most experienced freelancers see an opportunity, not a threat. So what can you do?
This is where it gets really interesting …
There is no doubt that you already have enough competition from freelancers in your own country and still have to deal with cheaper competitors from overseas. And when freelancers don’t watch their backs, they can easily be priced in by the market and crowded out by those who offer to do it faster, and for less money. However, this is a worst-case scenario that is not worth focusing on.
Instead, let’s look at a few ways you could take advantage of this:
Expand your price offer
I am sure many of you have had a few prospects who did not cooperate with you because you were too expensive and rightly you were not ready to slack out your rates. So the prospect went elsewhere, you lost that income and that was it.
What if you could offer a cheaper option? Perhaps offer a solution that the prospect is looking for, however, at the lower rates they are looking for? How you do that? By providing your products as a service.
It’s certainly an opportunity to provide a more affordable version of your offering and a solution to a customer you would otherwise have lost.
Expand your capacity
Have you ever had to turn down a job because it just couldn’t fit in? Perhaps you are at a stage where you need to grow your freelance business but you don’t want to have to hire anyone or you turned a client down because you just don’t want to do that type of work.
By outsourcing work to third parties, you can expand your business capacity and the volume of work you can do without hiring an employee at your company.
Expand your skills
The company I run was recently asked if we could help a client with a fairly large project that was beyond our technical capabilities. We were able to help with the business/process/design aspect, but we couldn’t build it. So we proposed a project management solution where we finalize the aspects that we can do and then manage development for them. Instead of rejecting the project, we used our suppliers, worked to our strengths, and ultimately made a good profit from the overall work.
Whether or not you position yourself as a “one-stop solution” in your target market, promoting yourself as a “go-to provider”, your customers and prospects will likely help keep your business safe – and Working with Vendors Who Can Offer The technical skills you can’t are one way to do it.
Some things to look out for …
Obviously, the success of the above strategies depends on a few aspects. Here are a few things you should probably consider:
- Find a supplier you can trust – start slowly, give them some test projects, and trust your instincts.
- Protecting Your Brand and Reputation – Decide whether you want to integrate your work under your brand, create a sub-brand or keep it completely separate and charge a reference fee.
- Manage the customer – You can either continue to manage the customer yourself, or you can return it to the supplier in full for a transfer fee.
It is very easy to feel threatened when the world is knocking on your door, threatening your livelihood, and challenging the freelance business that you put your heart and soul into; and it’s easy to feel hopeless and frustrated because you seem to lack the ability to do something about it.
Instead of seeing your global peers as a threat, focus on opportunities to work together to enhance what the two of you do, and you may see the opportunities rather than the threats.
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