A brand has finally reached out to you, offering you a paid brand deal. Your excitement quickly turns to panic: they’ve asked for your rates and you have no idea how to respond.
Firstly, congratulations! Whether you realize it or not, you’re building a business as a creator. Brand deals and sponsorships often make up a huge portion of revenue for creators, but they can be intimidating when you first get started.
In this post, we’ll cover:
- Should you even have set rates?
- How to set your rates
- How to negotiate around a brand’s budget
Should you have set rates?
Before you obsess over sponsorship rates, ask yourself whether this is the right option for you. Some creators choose not to limit themselves with defined prices. Instead, they ask for a brand’s budget and start negotiating.
Justin Moore, a sponsorship coach, encourages creators to think about brand deals as a type of service. Instead of having set rates, ask what the brand’s goals are. That way, you can tailor your services and prices accordingly.
However, some creators don’t want to think about negotiating or don’t have the time to do it. Set rates help them to create a more streamlined workflow.
To decide what’s best for you, consider:
• How often you plan to do sponsorships. If you have daily or weekly slots that are open for brand deals, setting prices can help you fill these slots without much input. We’ve found that this is often the case for newsletter creators.
• How many platforms you’re on. If you only have a newsletter, it’s easier to set a single price. However, if you have a newsletter, YouTube channel, and Instagram page, you might choose to leave pricing open so that you can upsell packages.
• What’s the focus of your business? If your main income stream is brand deals and sponsorships, negotiating can get you more money on the table. On the other hand, if you’d rather have it as a more passive form of income, setting prices can reduce the amount of time and energy you need to put into collaborations.
With Passionfroot, you have the option to set rates or hide prices. You can also create your own custom packages to send to brands.
How to set your rates
There are many ways to set your rates online, including with calculators and formulas that look at your audience size and engagement rate. Often, we’ve found that there’s no size that fits all.
Pricing is unique to every creator because there are so many factors that come into play. For example, what type of content do you produce? How engaged is your audience? Does the brand want to use your content on their profile too?
A good starting point is to see what other creators in similar niches are charging. You can use our newsletter pricing guide or see our Passionfroot Gallery, which showcases a creator’s stats, packages, and prices. Even better, ask creators! Most of the time, creators are happy to be transparent. We’ve found that our creator guests are willing to share how much they earn in our podcast episodes.
Finally, think about what’s right for you. How much can a brand pay you to make it worth doing a sponsored post? How long will it take you to create the sponsored content? How valuable do you think your audience is to a brand?
Remember, even when you set prices, you can always change them. Anthony Castrio set his prices low to get more consistent at writing newsletters with sponsors and has slowly been increasing them over time. This is a great idea if you want to build your confidence.
How to negotiate around a brand’s budget
If you’ve decided not to set rates, it means you’re open for negotiation. This is great because it means you won’t leave any money on the table. However, negotiating is a skill in itself, and it can be a daunting one at that.
Here are some tips to give you the upper hand.
- Ask the brand for their budget first. This takes the pressure off and gives you a starting figure to work with. Most brands have a budget in place and provide creators with a lower figure, anticipating negotiation. However, if a partner insists on receiving your rates, give them a price range that you’d be comfortable working with.
- Show them your value. It’s easier to negotiate with a brand if you’re holding the right cards. Show them your audience stats, engagement rates, comments and feedback from your audience, and past brands you’ve successfully worked with. This will prove to a brand that you’re worth investing in.
- Offer different packages. Instead of coming up with a single figure, provide different packages at different price ranges around a brand’s budget. For example, at the lower end, you could offer a single sponsored Instagram post. At a middle price range, you could offer a newsletter post and an Instagram post. And, perhaps even going above a brand’s budget, you could offer a more premium package with sponsored content across all your platforms. This gives brands options and you more selling power. If you only have one platform, you could offer bundled deals instead. For example, you could sell them 5 newsletter slots instead of 1 at a slightly reduced rate.
Improve your negotiation skills with practice and watch your pricing skyrocket. And remember, it’s perfectly ok to walk away from a brand if they can’t meet you at the prices you deserve.
Now you know how to price yourself and how to negotiate. It’s time to get those paid collaborations started! If you want to manage all of this in an easier way, be sure to sign up for early access to Passionfroot.