Which Has Better ROI: Freelance Design Services or Resource Design?
What is Resource Design?
Resource design is a genre of design that started when photos and fonts first became available for sale online. The demand for these types of assets stemmed largely out of the traditional fields of print and graphic design. These days, modern resource design is the practice of producing various pre-made digital designs in the form of powerful, scaleable assets, tools and templates. If they’re flexible, easy-to-use, and beautiful, they can empower folks to transform and take their projects to the next level.
Designers create digital design resources through an initial investment of time and energy (although a minimal amount of updating and customer support is always required for anything sold on the internet). Resources can be sold for profit or given away for free as promotion. From what I’ve seen at Creative Market, the income potential is tremendous and exponential. Sure, you’ve got to be smart about how you go about it, play your cards right, and have a stroke of luck, but the potential is definitely there.
Whether you’re looking to start a passive income trickle, make some serious spending cash, or create a full-time salary, resource design work may be a better option for you than design services. Or, at the very least, it might be time to start thinking about working some amount of self-initiated resource design projects into your freelance schedule!
Let’s take a look at the models for earning income by resource and service design respectively. Then, we’ll compare and contrast the potential return of investment between the two.
Freelance Design Services
Freelance design services can be summed up as single projects in which a designer creates and delivers completed files to a client based on a previously agreed upon scope of work. In short, you build something, send it on its way, and receive payment for it.
There are two traditional models for getting paid for design services. Project-based billings are an estimated amount that the designer and client agree upon that it will cost to finish the project. Hourly-based billings is a rate for billable time that the designer and client agree on, or that is left open ended for the project. Hours are logged and then submitted as an invoice at the end of the project. There are also newer models like value-based pricing, but we’ll skip those for the sake of simplicity. If negotiated, you might also get paid a good fee so that the client can have exclusive ownership of the work.
Here’s a quick look at the benefits and challenges of design services:
- Tough to get paid on time (or sometimes at all).
- Only get paid for the work you do.
- Don’t get to iterate projects often once they’re completed.
- Don’t always get to work with the same client.
- Not much control over the work, unless you’ve got a great client.
- Might have to sign an NDA.
- Get stuck being known for a style of work.
- Difficult to win projects when charging higher fees.
- Trouble working a 9-to-5 day or normal business hours.
- Client-set deadlines can be aggressive. Sleep much?
- Have to push back on client feedback.
- Not much time to learn new skills, or apply them to paid projects.
- The stream of new projects will dry up. Prepare to market thyself.
- Work on a variety of projects.
- Control your own schedule of projects, for better or worse.
- Collaborate with different clients in a wide range of industries for various consumer audiences.
- You aren’t responsible for the work after you hand it off.
- Work on high-profile brands without going full-time at those companies.
- If you’ve got the gumption, you can fire bad clients.
- Choose what you want to work on when the inquiries are flowing.
- You can use an agency or rep to streamline new projects and billings.
- You usually get paid in a one-time large stack of cash.
Digital Resource Design
Digital resource design can summed up as the creation of design-centric building blocks that others can edit and apply to their projects. A resource designer comes up with an idea, produces a pre-made digital design asset or tool, and then builds out marketing collateral (screenshots, pricing, tutorials, description, etc.). Once they find customers interested in their products, the exchange of payment and download of the product zip package happens almost instantly during each purchase transaction.
The primary model for getting paid for digital design resources is a one-time payment for each digital product (or license of that product) sold. A secondary model is a recurring subscription where customers receive assets on a regular basis. There are other opportunities to bring in revenue from digital assets, such as adding advanced licenses (extended, multi-seat, etc.), bundling products together, or creating unique, one-off, on-demand custom assets based on customer requests. Heck, you can put your resources on multiple marketplaces, too!
Here’s a look at the challenges and opportunities of resource design:
- It takes time to make valuable, easy-to-use products.
- It’s difficult to know where to market your products or who your customers are.
- It’s hard to get good exposure and close sales.
- The market is becoming more competitive and saturated with products. It’s challenging to be unique and innovative.
- The blank page syndrome is real. It’s hard to come up with a good idea.
- You have to support customers who purchase your digital products.
- You have to be patient as income trickles in over a long period of time.
- You may have to deal with fraud. Some users will obtain your products and host them on their site for others to download for free. Some users will buy your goods with fraudulent credit cards.
- You may have to deal with theft. Some users will copy your work in order to make something extremely similar to sell.
- You get paid over and over again for work that was done once.
- You can increase income simply by turning on other licenses, participating in bundles, and more.
- Creative freedom. Choose what to work on and how to execute it.
- Learn new skills or expand your existing abilities.
- You can sell the resource on one or many channels.
- If you go full time, you get to be your own boss.
- Share your design resource expertise to increase visibility and reputation.
Return on Investment
So, how much better does resource design pay when compared to freelance design services? Let’s talk about ROI (return on investment). Simply put, ROI is calculated by evaluating the costs and gains to arrive at a percentage.
Here’s the equation: ROI = (Gains — Cost) / Cost
For our purposes, the gains represent the income from the design work, and the costs represent the amount of time put into the project calculated as billable hours (time x hourly rate).
Now, let’s compare the profitability of some of my personal resource design products and freelance project billings using this ROI equation. In full disclosure, my resource products aren’t created strategically to fill a need or marketed heavily, because they are personal experiments.
The potential return can be much greater than what’s shown here, as evident by the many shops make thousands and tens of thousands in sales every month on Creative Market. Your mileage will vary from mine, and will hopefully be much better if you’re smart about your investment. Also, for the sake of simplicity, keep in mind that these numbers only reflect my sales from Creative Market and represent the gross income (e.g. they don’t take into account the 70% shop owner).
Resource #1: Vector Textures
Category: Graphics / Textures
In October 2012, I collected various textures that I created for my personal design projects over the years, and made them available for sale on Creative Market as a $3 pack of vector textures. It took me 6 hours to make the product files, screenshots and description. Over three years, it was viewed 16,000 times and purchased 532 times.
Gains: 532 sales x $3 = $1,596
Costs: 6 hours to create x $50 / hr = $300
ROI: $1,596 — $300 / $300 = 432%
Resource #2: HandBlock Bold & Regular
Category: Fonts / Sans Serif
I learned to design and kern fonts a few years ago. I created a hand-drawn two-font system called HandBlock and posted it for sale for $12 on Creative Market in July 2012. Over 3 years, it was viewed 6,500 times and purchased 93 times on Creative Market. It took about 14 hours to draw, digitize and kern this product.
Gains: 93 sales x $12 = $1,116
Costs: 14 hours x $50 / hr= $700
ROI: $1,116 — $700 / $700 = 59%
Resource #3: 10 Hi-Res B&W Paper Brushes
Category: Add-Ons / Brushes
In 2013, I taught myself how to make Illustrator and Photoshop brushes, and posted a Skillshare class about it. During that time, I created this pack of PS brushes as a proof of concept, and posted it for sale on Creative Market for $4. In 2 years, it was viewed 25,475 times and purchased 102 times. It took about 2 hours to create this product.
Gains: 102 sales x $4 = $408
Costs: 3 hours x $50 / hr= $150
ROI: $408 — $150 / $150 = 172%
Now, here are a few of my past freelance design service projects to help us compare against my resource products to gauge ROI.
- Logo Design Project
I produced an identity project for a client that offered two rounds of feedback that resulted in three final logos that they got to choose from.
Costs: 20 hours x $50 / hr= $1,000
ROI: $1,500 — $1,000 / $1,000 = 50%
- Web Design Project
I created a 3-template system for a marketing web design project that was then handed off to another vendor for development.
Costs: 35 hours x $50 / hr= $1,750
ROI: $2,500 — $1,750 / $1,750 = 43%
- Illustration Project
I made a small batch of hand-drawn spot illustrations for an iPhone app.
Costs: 10 hours x $50 / hr= $500
ROI: $650 — $500 / $500 = 30%
The Final Verdict
So, what does it all mean? Here are the main takeaways:
- ROI: Resource design may have the edge in ROI over freelance design services based on my examples. However, the actual income of resource design is likely to be lower unless you get some real traction with sales. Which type of design work you invest in all depends on this — can you wait for money to trickle in over time more slowly (resource design), or do you need larger sums of cash sooner for the work produced (freelance design)? I’ve seen a hybrid approach work for many folks at first. That looks something like 80% (freelance) and 20% (resources). Over time, if your resource products increase in sales, you can change your percentages to 50/50 or greater in favor of resource design.
- Time: The ROI of design resources will continually increase over time if you don’t pull them off the internet and keep getting traffic that results in purchases on your product pages. Compared to the one-time payment of design services, the growth potential of this ongoing “passive” income can be huge. It might be hard to find the time to make a great product, but a single experiment could change your mind about doubling down on design resources. Get inspired by the success of these Creative Market shop owners: Sam Jones, Rachael Towne, and Jenna Hagan.
- Complexity: Different design resource types require varying amounts of design skill, technical knowledge (especially by app that consumers will be using your products in), and time to create. There is education out there to help such as Skillshare courses, but expect a fairly steep learning curve unless you have experience in using or editing the type of design resource that you’re thinking of creating. The level of investment you make in terms of product flexibility, marketing visuals, description, and example use cases in your products will give them a better chance of selling. Sales are never guaranteed just by putting a resource product out there, but the upfront investment can get pretty deep, very fast. That’s not as cut-and-dry as getting a definitive freelance project from a client for a known payment amount.
- Billable Rate: If your freelance design services have a high hourly or billable rate, or if you negotiate large sums for exclusive use of your work by the client, then it might be to your advantage to stick to that type of work. It wouldn’t hurt to dabble in design resources, but you’d have to experiment intentionally and be willing to take the financial hit. Or, you can just go eat pizza on your time off. That’s always a good idea.
- Guaranteed Sales: Freelance design services guarantees that a single customer is locked into purchasing the work that you’re creating. The same thing can’t be said of design resources. However, you might be lucky enough to get a horde of customers instead of just one.
- En Masse: The more quality design resources that you make available for sale, the better the chances are that your potential return of income could hit a strong exponential stride. Imagine that you had 30 products that all brought in a modest $1k a year across many marketplaces. Not bad, right? That’s achievable by setting small goals, and releasing great products over time.
Thanks for reading, and happy resource designing.
If you’re interested in getting started in resource design or looking to take your products to the next level, have a look at these great insights written by folks in the Creative Market community.
- Open a Creative Market Shop
- Join the Creative Market Partner Program
- How to Grow a Loyal Following
- How to Increase Your Shop Sales
- Getting Traffic to Your Shop
- Are These 5 Mistakes Killing Your Sales
- How To Drive Sales Using Social Media
- 10 Secrets for Creating Screenshots That Sell
- The Art of Great Product Presentation
- 10 Ways to Get Free Exposure
- How To Earn Money with the CM Affiliate Program
- Pro Tips for Making Money When Sharing CM Products