How freelancers can compete with design marketplace sites

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The last few posts I’ve written here have all come from excellent reader suggestions on this post. Today’s is no different.

Joe Malleck writes:

One topic that I’m interested in is what a designer’s future role in the marketplace is. With the uprising of theme marketplaces and the awareness that you can essentially purchase design as a commodity, where do we as designers fit into this new landscape? How can we leverage our skills and insight to make fortunes, without selling out the profession?

What an excellent question!

Joe brings up a great point. Allow me to simplify it just a tad: How can freelance designers compete with design marketplace sites? (Or, if I can put words in Joe’s mouth, if not compete, then what?)

There are both sides to the argument: some designers love marketplaces and others hate them.

First we’ll talk about both sides and then explore what you can do now and in the future to either compete with or use marketplaces to your advantage.

Why some freelancers hate design marketplace sites

It’s totally understandable.

Some freelance designers hate design marketplaces.

Their reasoning?

When clients can purchase design as a commodity instead of a customized service, they lose out on clients–at a minimum, they have to lower their prices to compete with marketplace sites.

And I agree in some instances.

It can be frustrating to find a new client who, after receiving a reasonable bid from you, comes back with a response like, “I can get a logo for $25 at logosfor25dollars.com! Why in the world would I pay you that much!?”

To designers who hate marketplaces for this reason, keep reading! (Scroll to “How to compete with marketplaces”)

Why I (and other designers) love design marketplace sites

Then there’s the completely opposite side of the coin: designers (I admit I’m one of them) who love design marketplaces.

Why do I like them?

How could I stoop so low as to support something that many designers hate?

It’s simple: it makes me money.

If you’ve been following my blog for long, you know that I believe strongly that the first responsibility you have as a freelancer is to be profitable.

(Now, don’t get me wrong–being profitable is only worth it if you’re honest, stand true to what you believe in, and don’t try to cheat or steal.)

But being profitable is the key purpose of your design business, right?

If you’re not making money, design is not a business.

It’s a hobby.

I use design marketplaces to make money from my designs.

It’s as simple as that. I work hard on a design project (a wordpress theme, let’s say) then I submit it to a marketplace and reap the benefits of a passive income stream that allows me to charge my clients less, work fewer hours, and spend more time with my family.

If you’d like to learn more about taking advantage of marketplaces as a way to grow your business, keep reading! (Scroll to “How to make money from design marketplaces”)

How to compete with design marketplaces

If you’re the kind of designer who just can’t stand to create general, multi-purpose designs, here are a few tips for competing with design marketplaces:

  • Compare your services with marketplace items. Take a few hours and evaluate the quality of the design marketplaces provide. If they are superior to yours, take note and make improvements. If they are inferior, take notes and recite them to clients who are debating between you and a marketplace purchase.
  • Help clients understand the advantage of custom design. When pitching to your client, take the time to help them understand why they should pay the extra money for a hand-crafted site instead of a template–or a custom logo instead of stock.
  • Adjust your prices. If necessary, be a little more competitive with your prices. Now, I’m absolutely NOT saying you should sell logos for $25 or whatever, but if you consistently have trouble getting new clients because of pricing, take a step back and see where you can adjust.
  • Use marketplaces to your advantage. Here’s an idea: you know how asking a client to fill out a design brief, reading over it, and then running through multiple rounds of logos can take forever? Why not use a marketplace to your advantage and ask your client to find 20 logos he likes and send them to you. Then you have a great starting point for your design. (note: this is probably only a good idea if they bring up the marketplace idea. Wouldn’t want to introduce them to it and lose the job.)

How to make money from design marketplaces

If you’re interested in making some passive income from design marketplaces, here are a few tips I’ve used:

  • Take time to find out what people are looking for. If your clients are always asking for social media icons, or a certain kind of rotating slideshow, design it and/or code it.
  • Look into all sorts of different marketplaces. I’ve looked all around and finally decided that I like Mojo-Themes.com the best for selling my own designs, purchasing designs, and becoming an affiliate.
  • Be patient. You’re not going to make as much money upfront from your marketplace sales as you would from one client job, but if you can be patient, over time you’ll make as much or more.

Joe, did I answer your question?

I thought Joe’s question was an amazing one. I hope I answered it a little and I may explore this topic further another day.

Do you have anything you’d like to add? Leave a comment on this post!

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Comments

  1. says

    If you get a potential client who would rather go with anything from a marketplace they aren’t a client you want. Clients looking for cheap fixes for their design needs are never going to “get it” about design. The fact that a competitor can have the exact same template as them much confirms the client doesn’t understand branding, marketing… business. That, or they just are a cheap company selling seedy products, so cheap design is good for them.

    In either case a client looking for cheap template sites aren’t ones you would want to work for.

  2. says

    I totally get the advantages of crowdsourcing for designers who are willing to work their butts off to land the sale. For young, budding designers these markets are a godsend. If nothing else, they get experience in creating work and can stockpile a bunch of designs that can be filed away for future utilisation. But the problem is that a standard is being set and the current generation of clients are learning to expect cheap sweatshop designs. This is fine for designers who are young and eager to work 12 hours a day, but what will happen in ten years time when those same designers are settling down with a partner and want to raise a family? There won’t be 12 hours spare. There will hardly be 8 hours spare. And no designer wants to still be working their butts off after 10 years. Hopefully by then, some designers will have developed a firm relationship with a few repeat clients who are willing to pay more for the sake of that relationship, but that again is a dying concept in light of crowdsource markets.

  3. Margie says

    It’s true that many potential clients don’t get why they should have custom design, but it’s also true that many potential clients understand the value but just don’t have the resources to pay for it. For the ones who don’t get it, you can attempt to educate. I’ve converted a few prospects into excellent clients just by explaining why custom design would be worth the investment for them. For those who understand the value but don’t have the resources, you can either figure out a way to work with them and with their budget (perhaps by customizing a purchased theme/template) or respectfully decline the project.

  4. says

    Why try compete with marketplaces at all?? Use them to your advantage…

    Most small businesses (which is a niche our company targets) just don’t have the budget to do a custom design. They have small profits, low advertising costs and mostly rely on word of mouth. But every business needs a website.

    Instead of having to lower our custom design prices, we offer to select a template on their behalf (but with approval) and customize it to a decent extent (we make sure the coding is top notch to ease in customization). Any designer worth their salt can customize a template to make it look totally unique, with half the work and time a “from scratch” design would take. So we charge them a fraction of a custom design, have a good flow of business and make decent profits.

    Anyway, just saying what works for us. Keep your friends close, and your “enemies” closer! :)

  5. says

    Hey Preston,
    Wow! Thanks for using my question for a post. I like the way that you put it. At first, I was very apposed to marketplaces. I thought they devalued design greatly. One thing is for sure, they commoditize the industry. I think we all have a few choices, differentiate ourselves so that we can continue to pursue client services, become online merchants or both. I’ve come around to the idea that the opportunity that these marketplaces hold for designers far outweighs the negatives on the industry. Anyway, It’s super hard to make the transition, that is, from getting paid when the work is done to getting paid in a passive way with products. Making the shift slowly myself.

  6. says

    I hear a lot of “educate your clients”, really prospects are the ones to educate, since clients already bought into your services and value what your offering. Also I am too busy to educate prospects who are price shopping. Prospects who are worried about every dollar they spend are not interested in hearing if a site is done in CMS or Template etc… They are after the lowest possible price, dime a dozen of those clients around my neighborhood. I am too busy attending to good paying clients that know good design costs money. Also competition is fierce, but I also don’t call it competition. Anyone can setup a website and operate from another country which many do, of course to them cheap still pays their bills and brings them ton of money for their currency.

    • says

      I was thinking about this topic again this morning while reading “Selling the Invisible” by Harry Beckwith (Awesome). The author mentions that what sets service businesses apart is not the technical ability, or even price, but relationship and…service. People will always value personal service. It’s hard to get a good level of service from a theme marketplace (even with great customer support). I think this is the main way to “compete” with the marketplaces.

      Legal zoom has been around for a while and we still use lawyers. Just sayin’. :)

  7. says

    I don’t think it’s fair to suggest that clients who want simple designs on a budget are “bad” or don’t understand the concept of design. It’s about business viability and some have to prioritise budget over bespoke design, especially if they’re start-ups or SMEs. From my point of view as a coder, templates can be a godsend because I can focus on developing applications behind the scenes, knowing that the design already works.

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