How to price services in a world wide market?

GrabCAD is pretty cool. Four million users around the world. But, it leads to an interesting issue:
Let's say you perform CAD work for someone on the other side of the world. How do you agree on a price for that design work?

Different countries having different levels pay for services. Is there even a way to determine a price? I have to assume that this is the kind of thing they discuss in business classrooms and boardrooms.
It could apply just as easily to many items sold worldwide. Software, medicine, movies, food, tech support ...etc.

A specific example:
Recently a student in the Philippines posted what looks like a homework assignment with the offer to pay if the 2D drawings were converted into 3D models.
It looked interesting, so I made the models.
Total time spent was about 5 hours for this assignment, 1 hour for a previous, similar assignment.

I'm in the United States. The client is in the Philippines. How is an hourly rate agreed upon?

I did a little searching, and looking at a typical entry level worker (i.e. McDonald's Crew Member), they earn PHP 40 per hour (Philippine Peso).
In the USA, that worker might earn about $8 (dollars) per hour.
The currency conversion looks to be 52 PHP = $1

This would indicate that the US (and many other nations) will be in trouble.
In a worldwide market place, I can't charge even what is considered "minimum wage", as someone in another country could design the same project for significantly less.

Anyway, I'm interested to hear the thoughts of the 4 million other GrabCAD members.
Have you run into a similar situation?
Have you worked on project's which spanned countries and regions?

Answer
 
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1 Answer

FredSWUG,
Hello and welcome to the World of GrabCAD. The 4,000,000 is just a number. Search members by the number of model and contributions, and you will find after a few thousands, there are hardly any active members. Many join just to download models, get their homework done or use the website to spam the rest of us. Also the term "engineer" is abused, the majority of our members are not degreed engineers.
As for pricing, you are correct - we in the US are at a disadvantage. Very hard to compete with active contributors who live in countries with a lower cost of living and better currency exchange rates. However you have a few advantage as a North American designer: You are TIME effective.
You should look into clients in the US and Canada for the following reasons:
1- Communication: Details are lost when exchanging data via email only. You are within 3 time zones from you clients - use the phone to your advantage. Let them talk to you and build trust.
2- Language: Even more details are lost when language of the producer and the consumer are not the same. I'm sure you are aware of tech support centers based overseas.
3- You are here: You know what's available and how it's done here in North America. You can design your systems around your known suppliers like McMaster-Carr or DigiKey. You most likely know someone locally who can build your design and deliver parts.
4- Local norm: You client does not expect you to design and draw for $8/hr. If you offer such low price, they will definitely shy away and loose trust in you. Of course if you plan to support college students - your business model will generate work but hardly any income.

You may also look into other sites which specialize in selling your labor and take charge you for letting you sell on their websites.

No offense to any of overseas friends, my intent is to say everyone would benefit if they did business in their own territory.

Good luck my friend

 
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