In a very rare example of a professional illustrator explaining the pricing process, Jessica Hische, who gave us shouldiworkforfree.com, discusses The Dark Art of Pricing.
She explains why the hourly rate pricing can be detrimental, and discusses pricing for lease of rights (something which, in my experience, a lot of smaller employers aren't versed in — not just illustrators.) She also gives a compelling argument against speculative work, and mentions the "presentation only" pricing (which is another thing that smaller clients and illustrators often are unaware of).
Required reading for any up-and-coming freelance illustrator.
http://www.jessicahische.is/obsessedwiththeinternet/andhelpingyougetpaid/the-dark-art-of-pricing
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