The usual payment model involves doing a job and then getting paid for it. There are, however, other payment arrangements. Let’s look at the retainer.
What is a Retainer?
A retainer is an agreed-upon lump sum of money that a client pays a professional up front for doing some sort of job. Some professionals get a retainer up front for delivering a service for a specified time period, while other professionals get a retainer for producing something. The amount you charge may be based on an hourly rate you set for yourself for services. It may be based on an industry standard for a specific type of delivered product.
What are the Advantages of Retainers?
Retainer payments tend to be substantial amounts of money. Some professionals, such as copywriters who write newsletters, can easily turn a one-off/trial newsletter gig into a long-term monthly retainer arrangement. A copywriter who has procured three or four regular clients who pay them $1,500 up front every month for writing a newsletter for their outgoing emails has a very lucrative and fairly predictable income. If you’re a contractor who wants the freedom to get a gig on retainer only when you want to work, you may also view retainers as advantageous.
What are the Disadvantages of Retainers?
Some professionals find landing gigs and getting payment up front exhausting, unreliable and unpredictable. Consultants, for example, get a retainer up front for delivering consulting services for an allotted time period or for the duration of a project. Since their consulting services aren’t needed long-term, consultants must continually look for new clients.
Because retainers are large sums of money, professionals that require them must be able to quickly win the confidence of strangers and walk away with a large retainer check. The consultant may end up giving a discount to seal the deal, especially when the consultant is a newbie. If the consultant’s work disappoints the client, the consultant may have difficulty getting another gig anytime soon, depending on the consultant’s experience and other factors.
Retainers are large payments received in advance for items to be produced or for services forthcoming by a professional. Working on retainer can be advantageous or disadvantageous, and it can be lucrative.