Are You a Product? Or a Service?

The iPhone you just bought is 1,500 USD here.
The paycheck you got is 10x less for the same role in the US.

Why are products priced similarly across the globe, but services are adjusted for local economics?

It’s an interesting question. Especially for those who work with BPOs, agencies, or as solo freelancers.

You are basically being paid a cut of a cut. And hey, if you are happy with it, more power to you.

But the fact is, we have gotten used to this because it is a better option than the alternative.

Local business or industry starting salary: 100-150 USD/month.
BPO or dev agency starting salary: 250-300 USD/month.

A 2.5x difference. Matters a lot for your first paycheck.

But wait. There is another level to this.

Tech Support Rep salary in a BPO: 250 USD/month (1.6 USD/hr).
Tech Support Rep salary in the US: 4,500 USD/month (28.1 USD/hr).

A staggering 17x difference.

I don’t usually make my posts about numbers. But here, they matter a lot.

What option are you left with then?

Cut the middleman. Go solo.

And as you do, years go by, and you realize again.

Average Pakistani freelancer rate: 20 USD/hr.
Average US freelancer rate: 80 USD/hr.

A 4x difference. Wait, what?

There is no middleman. You are directly working with US clients.
Why is there still a gap?

Two main reasons.

Number 1: It’s a mentality problem.

Years of being stuck in such loops, most of us just run with the less shitty option.
We never question it. We just take what’s offered and move on.

Number 2: Companies hire us to save on costs.

Not to match what is locally available. That is the truth for most solo players and people working at BPOs.

The whole point of outsourcing, from the client’s perspective, is arbitrage. They want quality work at a fraction of the cost. That’s the deal.

So what’s the fix?

Before I answer that, let me reframe the question.

Why Products Don’t Have This Problem

When Apple sells an iPhone, they don’t adjust the price based on where you live.

A phone costs what it costs. The value is baked into the object itself.

Products have a few things going for them:

They are built once, sold infinitely. The cost of production doesn’t scale linearly with the number of buyers.

They are standardized. Everyone gets the same thing. No customization, no scope creep, no “can you just add one more feature.”

They create dependency. Once you’re in the Apple ecosystem, switching costs are high. You’re locked in.

They control distribution. Apple decides where you buy, how you buy, and what you pay.

Services, on the other hand, are the opposite.

Why Services Get Discounted

Services are sold by the hour or by the project.
Every new client means more time spent.

Services are customized. Every engagement is different. Scope changes. Expectations shift. Revisions pile up.

Services are interchangeable. If you can do it, someone else can too.

Probably cheaper.

Services have no lock-in. Once the project ends, the client moves on. There’s usually no recurring relationship unless you build one deliberately.

This is why services get squeezed on price. They’re commoditized by default.

And in markets like Pakistan, where thousands of people offer the same skills on the same platforms, the race to the bottom is brutal.

The Services Trap

I’ve seen this pattern repeat across every service vertical in Pakistan.

Web dev agencies.
Design studios.
SEO shops.
Marketing firms.
Video editors.
Virtual assistants.

They all start the same way. Someone has a skill, maybe some experience, and a laptop. They offer the skill to someone overseas, maybe outsource the work locally, and suddenly they’re a founder.

Low risk. Fast returns. No gatekeepers.

But this ease is exactly why we’re stuck.

The market becomes bloated. Everyone offers the same things. Everyone competes on price by default.

The $5/hr gig race begins on Upwork and Fiverr. And with it, the death of margin, differentiation, and growth.

When you’re a pure service, you’re always one tool away from being replaced.

Product Thinking vs Service Thinking

Here’s the mental shift that matters.

Service thinking asks: “What can I do for this client?”
Product thinking asks: “What can I build once that serves many clients?”

Service thinking trades time for money.
Product thinking trades value for money.

Service thinking scales with effort.
Product thinking scales with distribution.

Let me give you some concrete examples of what this looks like in practice.

Pure Service (Most Vulnerable)

You’re a freelance web developer. Every client gets a custom build. Every project starts from scratch. You quote hourly or per-project. When the work ends, so does the revenue.

Pros:

  • Low barrier to entry
  • Immediate cash flow
  • Flexible, can pivot fast
  • Learn a lot across different projects

Cons:

  • Income stops when you stop working
  • Constantly hunting for new clients
  • Compete on price by default
  • Hard to build leverage over time

Productized Service (Middle Ground)

You’re still a web developer.

But now you offer a fixed package: “Landing page in 7 days. 3 revisions. Flat rate: 75k.”

You’ve standardized your process. You know exactly what you deliver. You’ve removed the negotiation around scope.

Pros:

  • Predictable revenue per project
  • Easier to market and sell
  • Less scope creep, clearer boundaries
  • Can start hiring or outsourcing delivery

Cons:

  • Still trading time for money
  • Still need new clients constantly
  • Limited upside per engagement
  • Harder to differentiate from others offering similar packages

Product (Most Defensible)

You’ve built a SaaS tool, a template library, a course, or a framework that you sell repeatedly. The work is done once. The sales happen over and over.

Pros:

  • Income continues even when you’re not working
  • Scales without scaling effort
  • Builds brand and authority
  • Creates lock-in if done right

Cons:

  • High upfront investment (time, money, energy)
  • No immediate cash flow
  • Requires marketing and distribution skills
  • Most products fail before they find traction

Hybrid (The Smart Play)

You run a service business, but you use it to fund and inform product development. The service gives you cash flow and client insights. The product gives you leverage and scale over time.

This is what I’m doing with Biz of Dev. We run product dev engagements with clients. But every engagement teaches us something about what founders struggle with. And those insights become content, frameworks, and eventually, products.

The service is the engine. The product is the outcome.

So What’s the Fix?

Back to the original question. How do you close the gap between what you earn here and what someone earns in the US?

There are two paths.

Path 1: Become the iPhone.

Be so good at what you do that no matter where a company is, they are willing to pay you your price.

This is rare. It requires years of compounding skill, reputation, and positioning. It means becoming the only option, not one of many.

Most people won’t get here. That’s just the math. But if you’re aiming for it, know that it takes time, visibility, and a willingness to say no to work that doesn’t match your rate.

Path 2: Fix your expectations and build leverage.

We live in Pakistan. A country with 10x less cost of living.

Yeah, things are still expensive. But you don’t need to match 1 for 1 with a US resource.

Just avoid abuse. Be aware of not getting paid 17x less. Anywhere 2 to 4x less is perfectly fine, especially early on.

But don’t stop there.

Use the time you save by living cheaply to build something that compounds.
A product.
A brand.
A community.
A system that works even when you’re not actively delivering.

What Leverage Actually Looks Like

Leverage isn’t magic. It’s just something that works for you when you’re not working.

A course you recorded once that sells every month.
A template library that people buy while you sleep.
A newsletter that builds trust with potential clients before you ever talk to them.
A community that refers work to you because they know your name.
A productized service with clear scope that you can delegate or automate.

These are all forms of leverage. They take time to build. But once they exist, they change the math.

You stop competing on price. You start competing on trust, reputation, and access.

Final Thought

Are you a product? Or a service?

Most of us start as services. That’s fine. It’s the fastest way to get paid.

But if you stay a pure service forever, you’ll always be one step away from being replaced.

By someone cheaper. By someone faster. By AI.

The goal is to move along the spectrum. From pure service to productized service to product. Not overnight. But intentionally, over time.

We might be limited by our max rate. But we have unlimited flexibility when it comes to building something that outlasts the next project.

That’s the real difference between a product and a service.

One ends when the work ends. The other keeps going.

With or without my help – I wish you the best.

The Wandering Pro is a quiet, steady corner of the internet for people figuring out their next move in tech.

Whether you’re a freelancer, a junior developer, or someone building something for the first time – this is a space for showing up, learning, and making progress at your own pace.

If that sounds like what you need, come be a part of it.