I’m currently exploring contract/freelance work in merchandising/buying for the first time in my career. What challenges or pitfalls should I be aware of? What is the best way to determine your rate?
This is an old post so you may have already gotten an answer from another source, but I recently got this useful benchmark for determining freelance rate: calculate your hourly rate of your last FT job (for example, if you made $50,000 a year, this would be equivalent to $24/hour) and then add 30% to cover your expenses such as health insurance (30% of 24 is 7, so your hourly rate in this example would be $31).
I’m not a Merchandiser, but last year was approached by a company to do free lance work for them. So I did an internet search and found out that as a consultant, you should be charging 2-3 times your hourly rate. I’m very experienced and creative in my approach to my work, so it made sense to me. When I quoted my rate, the client paid gladly and gave me more work at a later time. This year another client also did. If you have very good benefits at your job, the extra money will cover insurance, vacations, holidays, sick time, any perks and bonuses, extra self-employment tax that your employer paid on your behalf. It will also provide that extra cushion for when you don’t have work. It will also cover the time spent looking for work, interviewing, administrative and other work. But it might differ from field to field and person to person if a 3x rate will be accepted and generate enough clients. It depends if the consultant has an edge over others in the field, how effective they are, how valued is the outcome of their work or how competitive the landscape in their specialty.