I just got off a very interesting phone call from a company marketing training. Things were going very well--extremely well--until the sales person decided to show me the possible rates for consulting a job: $14- 45K. These are reasonable rates, given what I've seen and what my skillset is.
The sales person then suggested that I offer a low-end job at $8K or $10K.
I proceeded to explain to him why this was horrible advice.
Boys and girls, you never undercut. Charge according to an objective assessment of your skills and experience and factor in local conditions (different rates for not-for-profits, etc). Then stick to your guns.
Let's assume you and your peers are all of the same skill set and background. You undercut your peers to get a job. The next time that customer goes out to bid, there's an expectation regarding rates. You're going to have to fight for your rates.
Your peers will have to fight for their rates as well. Undercutting affects everyone in the community--so now you all have to struggle more. You're devaluing your skills and experience.
When you steal jobs, word gets out. Now your peers know who's undercutting. People in the same field will cross-refer work if they're swamped. Will you get references from people who know you undercut? Is greed and momentary profit a reason to set up bad blood in a community?
If you're a woman, you're already used to being worth 70-80% of a man while struggling just as hard to maintain and build skills. Why perpetuate this nonsense?
When I finished, the sales person admitted no one had ever explained why undercutting is such a dangerous practice.
Go on and argue free-market and price-fixing if you want. Undercutting is a plague.