Sometimes being self-empolyed really sucks! - PeachParts Mercedes-Benz Forum

sfloriII · #1 02-24-2011, 11:53 AM

I just had a long-term client of mine arbitrarily lower my rates (after the fact) that were established between us in 2008. I either accept it or they simply call someone else. When you're a contractor you don't get fired, you just don't get called back.

I know companies need to save a buck in this economy, but to do this without even talking to me about it really stinks! It just shows the power companies have when there are more people than there is work.

kerry · #2 02-24-2011, 12:25 PM

Sorry to hear that. It's the justification for unions in a nutshell.

75Sv1 · #3 02-24-2011, 12:41 PM

It does suck. I thnk we all sort of face how much we can charge or are worth. Even Unions, as some have priced themselves a bit to high. Then again, some companies will go elsewhere, thinking they are saving a buck or two. Think moving jobs to China or Mexico.
A few years back, the automakers really leaned on suppliers for price cuts. One of the suppliers, felt that their product was worth what they were selling at. Told their buyer to search elsewhere if they wanted to, not price break. I don't think anyone switched from their product. Kind of have to figure out where you stand and what you are willing to take.
Tom

Jim H · #4 02-24-2011, 01:00 PM

Well, to make a point you could just halt your work 75% of the way to completion and walk away, giving them equal notice...

Of course your reputation will get trashed with this tactic, but as a daydream this could work...

Any chance your long-term client would talk to you face-to-face and explain why they did this? Were they unsatisfied somehow? Are they simply in a budget crisis? Are they fishing for lower rates, or cheaper replacement contractors?

I am now at a point in my (engineering) career where clients assume that, due to years of experience, I must command far higher rate than those with fewer years of experience. While there should be some reward for longevity and experience, the reality is the pay curve levels off quickly. I hate being eliminated because an employer figures that because I am 'of a certain age' I must get a high pay rate. Some days, I am just looking to get paid!

Good luck!

Stretch · #5 02-24-2011, 01:03 PM

Quote:

Originally Posted by Jim H

Well, to make a point you could just halt your work 75% of the way to completion and walk away, giving them equal notice...

...

I'd go along with that - and to top it off you should say "it's nothing personal - only business"

aklim · #6 02-24-2011, 01:06 PM

Question. After this, what is to stop me from doing it again and yet again and yet again?

I suggest you cut your losses with them, ensure they fulfill the contract and walk. Assuming they are not your one and only client. Otherwise, you are a sap and next time they feel like doing so, they will because you are too scared to walk.

sfloriII · #7 02-24-2011, 01:13 PM

Quote:

Originally Posted by Jim H

...I am now at a point in my (engineering) career where clients assume that, due to years of experience, I must command far higher rate than those with fewer years of experience. While there should be some reward for longevity and experience, the reality is the pay curve levels off quickly. I hate being eliminated because an employer figures that because I am 'of a certain age' I must get a high pay rate. Some days, I am just looking to get paid!

In television these days, many clients will forgo quality in place of saving a few bucks. I've seen many cameramen lose work because clients can replace them with one guy controlling three cameras via one remote joystick! In my case, I still get work because I can both direct and technical direct, not something every director can do. So I get work because I often do the work of two people! I charge a bit more for this and the client saves a few bucks. It works out well for both of us.

In yesterday's situation, I was hired as the technical director only. The client had their own director for the program. Afterward, however, the director left before the client could have him direct a short four camera interview. So I did it myself and didn't even charge for it. Yet I still was asked to lower my half-day rate $100!! Ugh.

75Sv1 · #8 02-24-2011, 01:14 PM

I kind of wonder if they are breaking a contract? Yeah, the legal expensese would amke it rough or not worth the effort. Also, possibly word gets around and you are esentially blackballed.
I wonder how they would feel, if you dropped your contract any time you found a customer to pay a higher rate?
Tom

sfloriII · #9 02-24-2011, 01:17 PM

Quote:

Originally Posted by aklim

Question. After this, what is to stop me from doing it again and yet again and yet again?

I suggest you cut your losses with them, ensure they fulfill the contract and walk. Assuming they are not your one and only client. Otherwise, you are a sap and next time they feel like doing so, they will because you are too scared to walk.

There's nothing to keep them from doing this again and again. It's simply the way business is done for us freelancers in television. There is no contract (usually). We work and get hired on the reputation we have around town. There is a very fine line between pushing to get the rate you should and keeping a client from simply calling someone else on their list (even if they're not as talented). These days there are a lot of television people without work who are competing for my clients and work. Unfortunately I no longer command as much of the leverage I used to have when these competitors were gainfully employed and not competing with me. So I have to suck it up for now. I still have work, which is a lot more than many people have these days so I'm not going to complain too much about my situation.

chasinthesun · #10 02-24-2011, 01:27 PM

Yes ,the little guy is always the one that gets the short end of the stick ,while your cost encures higher cost with the economy and gas prices,theyll cut theirs to save profits.Its someone in the company that is running the cost of your service ,bean counters,if you can get some answers to why your needing to lower your price ,it might be a way to show that you are concerned for the companies health as much as them ,then make assistance to bring an understanding of communication with that individual.It may be another rep from a company that is looking to take away your service and offering to do a lower price to win the business.Have you had someone needing a bid lately that went nowhere? maybe one similiar in the cost range to this companies.Hope you success,your one of the good guys out their that keeps this economy running.

sfloriII · #11 02-24-2011, 01:38 PM

It's actually pretty simple on my end. I provide my talent and expertise. I have no equipment other than my computer and printer in my office, for the most part.
Most of us freelancers in the area know each other and most of the rates we work with are the same across the board as a way to protect ourselves and as a "gentleman's agreement" not to undercut any of our competition. "I scratch your back, someday you'll scratch mine." Right now, for example, most of my work is at a studio where I've made close to $90,000 in the last two years alone. I got all that work because a fellow freelancer recommended me to them early on when he had scheduling conflicts that prevented him from directing one of their programs. It's an honor code thing.

That's why I was floored yesterday when my other client asked (told, under threat of no more work there) me to lower my invoice for the previous day's work by $100 when I had already been paid that amount by them fifteen times since May 2008.

I simply comes down to the fact that they no longer want to pay me the rate that I've been charging for these last few years. In this economy, they have the upper hand and I wait it out until something better comes along. As it is, the lower rate is still pretty good compared to some of my other clients, so I'm eating it for now...

aklim · #12 02-24-2011, 01:52 PM

Quote:

Originally Posted by sfloriII

It's an honor code thing.

That's why I was floored yesterday when my other client asked (told, under threat of no more work there) me to lower my invoice for the previous day's work by $100 when I had already been paid that amount by them fifteen times since May 2008.

I simply comes down to the fact that they no longer want to pay me the rate that I've been charging for these last few years. In this economy, they have the upper hand and I wait it out until something better comes along. As it is, the lower rate is still pretty good compared to some of my other clients, so I'm eating it for now...

Not anymore it isn't as evident by this event.

And tomorrow, it could be another $20 and yet another $20 and so on. That is plain sneaky. After all, he should have done it BEFORE work started not after. Again, it shows his character so I'm better you will be more and more screwed in the future with this relationship.

I would think you'd be better off demanding what they owe you and not working for them unless the call you. I'd even go as far as to say "This was the rate we agreed on and this is what I want to be paid for the work done. Any future rate changes will be approved by both of us or not at all. If you need me in future, call me. If not, goodbye." If word gets around that you are a rug, look forward to others doing the same to you.

sfloriII · #13 02-24-2011, 02:29 PM

Quote:

Originally Posted by aklim

Not anymore it isn't as evident by this event.

And tomorrow, it could be another $20 and yet another $20 and so on. That is plain sneaky. After all, he should have done it BEFORE work started not after. Again, it shows his character so I'm better you will be more and more screwed in the future with this relationship.

I would think you'd be better off demanding what they owe you and not working for them unless the call you. I'd even go as far as to say "This was the rate we agreed on and this is what I want to be paid for the work done. Any future rate changes will be approved by both of us or not at all. If you need me in future, call me. If not, goodbye." If word gets around that you are a rug, look forward to others doing the same to you.

The arrangement now is that when he needs me, he calls to see if I'm available. So, in effect, I only work for him when he calls to see if I'm available. Other than that, I don't think they'll regularly whittle down the rate because that also gets around town and others will be less willing to work for them.

aklim · #14 02-24-2011, 02:34 PM

Quote:

Originally Posted by sfloriII

The arrangement now is that when he needs me, he calls to see if I'm available. So, in effect, I only work for him when he calls to see if I'm available. Other than that, I don't think they'll regularly whittle down the rate because that also gets around town and others will be less willing to work for them.

Never underestimate their stupidity. As I said, if it were me and you halved my rate without prior discussion, I would rather not work for you than to be known as a sap. If word gets around that he could push you like that, well....

Pooka · #15 02-24-2011, 04:18 PM

Long, long ago I worked for a hydraulic supply company. We had customers do this to us on a regular basis and that was about 50 years ago.

We kept business by also doing a lot of engineering for free. Designing a simple hydraulic system is easy if you know how but scary if you don't. If you bought from us we would look over your plans and tell what would or would not work and then we would point out ways to cut out components that were not necessary for the job at hand. None of the other hydraulic companies in town would do this.

We also offered high quality at a very low price since we felt we could make the money up on repeat sales to OEM's.

And if anyone pulled the old 'I got to have a 10% cut on your prices or I walk' stuff we told them we would still be around when they came back. As Stanley Marcus used to say, "We have no problem with those who sell for less. They know what their products are worth."

But we were in a position to do this because we were not dependent on one customer for survival. And that makes all the difference in the world.