Comment by ChuckMcM | Hacker News Reader

Comment by ChuckMcM | Hacker News Reader

My Dad is an engraver, he's good at it, he was complaining to me that he had more work than he could handle. I suggested he raise his price then. He responded with the typical "I couldn't in good conscience charge that for something that takes me only a few hours to do!" And then we had a long discussion about how the market sets the rate, not you, and if you hold your rate under market it will overwhelm you because you're leaving money on the table, if you don't have enough work to keep you busy then you're over market. The key here is the market sets the rate, you don't.

Once we established that it was pretty easy to see how letting his rate float up would help with his workload, he would not only be less overloaded but he would be collecting more of the market value of his work. Since in his case (he's nominally retired) not working at all was just fine, he had a lot of freedom in over shooting the market and then coming back.

I recognize that its not as useful for someone who is wondering where rent money will come from.

This is capitalism 101.

Funny thing is, my parents (who are both near-retirement service providers in their own professions) won't adopt such a model in either direction (raising their rates or decreasing their rates based on workload).

They also just recently chastised my brother (who is in his mid-20s) for doing an arbitrage play where he could get a plentiful supply of iPad 2's on discount and sell them above market rate on eBay.

Threads like this remind me that I wasn't bought up in a capitalist family.

Most of my generally very pro-market older relatives are actually kind of squeamish about that sort of thing, oddly enough. They're probably more libertarian on government and regulation than most younger people I know, but much stronger on a "fair price for fair work" sort of ethic, where they look down on arbitrage-type plays, and on charging too high markup above cost + moderate profit. To them, running an "honest business" that charges reasonable prices, based on hard work, and doesn't engage in any trickery, is what American capitalism is supposed to be about (in a mid-20th-century white American middle-class view of capitalism).

My parents are very much left wing but have no problem with arbitrage (unless you rely on people's lack of knowledge or on their stupidity to pull it off) or charging market prices.

Don't ever regret that.

Yeah. It's weird to think about making a lot of money for a small amount of work, but it does make sense in the market.

I mean, if 16 people are willing to pay for an hour of your time on Monday, and you're only going to work 8 hours, how do you decide which lucky 8 people get your services? 1) First come first serve? 2) Pick 8 at random? 3) Pick the 8 who want it most?

#3 is most easily measured in "dollars they will pay," so you raise your price. Of course, it also favors the wealthy, so if you feel badly about that, do some pro bono or find a way to provide tiers of service at different prices.

This is so true and the funny thing about it is that it makes sense logically yet it runs so contrary to our natural inclinations or at least mine and I'm sure many others.

Economics you so crazy.

That's the basic thesis of Earn1K - the "I will teach you to be rich" course. I won't link here, as it's commercial, but the blog is worth a look even if you're not a paying customer.

I won't link here, as it's commercial

What's wrong with linking a commercial product or course?

This is a discussion about making money on a website with a strong slant towards making money by starting and running businesses.

http://www.google.co.uk/#q=i+will+teach+you+too+be+rich

Moreover, for many services, clients have no idea who is good at providing the service, and one of the best ways you can "advertise" that you can deliver the service well is to raise your rates. Some clients will assume, perhaps with warrant, that the most expensive providers do the best work, and thus really are least expensive in terms of value to the client. Try it.

He could charge extra for fast turnaround. If someone needs a job done quick they can pay a fixed or variable surcharge. That way your dad doesn't have to feel bad about charging more for the work itself.

Go on...

So, did he set his prices? What happened? What did he charge prior and how much did he change... and most importantly, is he happier?

Heh, yes he's much happier. He's much happier with the adjusted workload and it hasn't really changed his annual income all that much (perhaps a bit more income but a lot less work). Life is, to all outward extents, both more manageable and less stressful. He still undercharges his friends :-)

I think you still didn't directly answer the question. I'll assume (just a guess from your comment) he increased his rates?

He's much happier with the adjusted workload and it hasn't really changed his annual income all that much (perhaps a bit more income but a lot less work).

Do the math.

Reply on news.ycombinator.com