AI Side Business Pricing Strategy [2025 Edition] How to Set Rates Without Undervaluing Yourself
"I don't know how much to quote" "I think I'm charging too little, but if I raise prices I won't get any work"
Pricing is an eternal challenge for side businesses and freelancers. Underpricing devalues yourself and is unsustainable long-term.
This article explains how to think about fair pricing for AI side businesses and strategies for increasing your rates.
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Three Approaches to Pricing
1. Cost-Based Pricing
Set prices by adding profit margin to your costs (time, tools, etc.).
Example calculation:
5 hours work x $30/hour target + $5 tools + 20% profit = approximately $185
Pros: Easy to calculate / Cons: Value not reflected
2. Market-Based Pricing
Set prices based on competitors and market rates.
Research methods:
- - Check rates for similar projects on CrowdWorks
- - Check service prices in the same category on Coconala
- - Research competitor freelancer websites
Pros: Understand market sense / Cons: Hard to differentiate
3. Value-Based Pricing (Recommended)
Set prices based on the value clients receive. This approach enables the highest rates.
Approach:
"This work could increase client revenue by $1,000/month, so a $500 upfront fee easily pays for itself"
Pros: Higher rates possible / Cons: Requires ability to explain value
AI Side Business Market Rates (2025 Edition)
The following are guidelines. Rates vary based on experience, expertise, and client size.
| Service | Beginner | Intermediate | Advanced |
|---|---|---|---|
| AI Article Writing (3,000 words) | $30-50 | $80-150 | $200+ |
| ChatGPT Consulting | $50/hour | $100/hour | $200/hour+ |
| AI Illustration | $10-30/image | $50-100/image | $150/image+ |
| AI Video Editing | $50-100/video | $200-500/video | $1,000/video+ |
| AI Tool Development (Bots, etc.) | $300-500 | $1,000-2,000 | $3,000+ |
The Trap of Below-Market Pricing
Prices that are too low can create impressions of "low quality" or "untrustworthy." Also, cheaper clients tend to have more demands. Fair pricing builds healthy relationships for both parties.
Costs to Consider in Pricing
It's important to include often-overlooked costs in your calculations.
1. Direct Costs
- - AI tool fees (ChatGPT Plus $20/month, API usage fees, etc.)
- - Other tools (Canva Pro, Adobe, stock images, etc.)
- - Outsourcing costs (if applicable)
2. Indirect Costs
- - Internet, electricity
- - PC and equipment depreciation
- - Workspace (even a portion of home can be prorated)
3. Hidden Time Costs
- - Client communication (emails, meetings)
- - Revision time
- - Sales and proposal time
- - Learning time for skill improvement
4. Risk Premium
- - Cancellation risk
- - Non-payment risk
- - Additional work risk
5. Taxes and Social Insurance
- - Income tax (progressive)
- - Local taxes (approximately 10%)
- - Health insurance and pension
- - Sales tax (if revenue exceeds thresholds)
Actual Take-Home Calculation
For $1,000 in revenue, after deducting expenses and taxes, take-home may be only $600-700. Price accordingly.
Strategies to Increase Your Rates
1. Develop Expertise
"SEO content specialist for SaaS companies" commands higher rates than "AI writing." Specializing in a niche establishes you as an expert in that field.
How to implement: Deepen industry knowledge, obtain certifications, build a track record
2. Commit to Results
If you can promise outcomes like "improve search rankings" or "increase sales" rather than just "write articles," higher rates are justified.
How to implement: Performance-based proposals, KPI setting and regular reporting
3. Package Your Services
Increase order value by offering bundles rather than individual services.
Examples:
- - Article creation + SEO optimization + images = package price
- - Initial setup + monthly support = ongoing contract
4. Propose Ongoing Contracts
Ongoing contracts provide more stable income and reduced sales costs compared to one-off projects.
Proposal example:
"If you commit to 4 articles per month ongoing, I can offer $XX per article"
5. Raise Rates Gradually
As you build track record and ratings, gradually raise prices for new clients.
When to raise rates:
- - When you exceed 10 reviews
- - When you have more work than you can handle
- - When you've upskilled (learned new techniques)
- - When market rates have increased
Quote Creation Tips
1. Define Scope Clearly
Not just "article creation" but specifically "outline creation, body text (3,000 words), 3 images selected, up to 2 revisions."
2. Set Option Pricing
Present additional request handling upfront: "Additional revision: $XX each" "Rush delivery: +20%"
3. Present Multiple Plans
Presenting "Good/Better/Best" three-tier plans makes the middle option more likely to be chosen (anchoring effect).
4. Explain the Value
Explain the rationale: "This price includes XX" "You can expect YY results"
Handling Price Negotiations
Here's how to handle discount requests.
OK: Adjust Scope
"To fit your budget, I can reduce revisions to 1 round and offer $XX"
OK: Discount for Commitment
"If you commit to 3+ months ongoing, I can offer a 10% discount"
NG: Simple Discount
Discounting for the same scope devalues yourself. It also becomes a baseline for future work.
Courage to Decline is Important Too
"Clients whose budget doesn't match" are sometimes better not accepted. Time is limited, so look for clients who pay fair rates.
Summary
Pricing is about "how you value yourself."
Don't undersell. Setting prices that match the value you provide leads to a sustainable side business.
Pricing Steps
- 1. Research market rates
- 2. Calculate your costs (including hidden time)
- 3. Articulate the value you provide
- 4. Gradually raise rates as your track record grows
Frequently Asked Questions
Should beginners charge less?
For your first few projects, accepting slightly below market rate for portfolio building can be worthwhile. However, avoid "free" or "extremely cheap." Prices that are too low also tend to attract lower-quality clients.
How do I raise rates with existing clients?
Give advance notice and explain your reasons. Something like "New clients will be charged $XX from next month, but for ongoing clients I'll offer $YY" to give existing clients preferential treatment smooths the transition.
What should I include in a quote?
Include scope of work, deadline, price, payment terms, revision limits, copyright ownership, and cancellation policy. The more detailed, the better for preventing future issues.
Build a Sustainable Side Business with Fair Pricing
Value yourself correctly and build a side business you can maintain long-term