While spec work and spec work/contest sites like 99designs and crowdspring receive most of the ire from the graphic design community (by the way, whether they deserve it or not is beyond the scope of this post...check out some of my older posts for my take on them), I wanted to quickly share an email that I received yesterday, see below.
NEWSFLASH: Spec work web sites aren't the only ones that are taking a portion of the freelancing work out there, check out this tactic:
I would like to redevelop your website. I will create a concept that is not template based and that fits your firm perfectly. There is no charge for this. This will prove we can build a site that fits your needs without obligating you.
If you would like to view your site on some of our other designs, please use this link: http://www.only-website-design.com/concepts/. You will simply be asked for the name of your firm for confirmation.
Only Websites, Sales Manager
1432 E 840 N, Orem, UT 84097
If you are concerned about the growing amount of design competition out there, this is probably disconcerting but it does't have to be.
Whether it's spec work sites, people offering free stuff like in the email above or the kid down the block that will do a web site for a ball of lint and a bus pass - you can compete with all of them as a freelancer without cutting your costs to nothing.
If the goal of your design is to just look good or in above email, "it will fit your firm perfectly" but it doesn't help the client accomplish their goals, and you're going to have to resort to things like giving away freebies or charging close to nothing. I cover this at length in the Being a Starving Artist Sucks book, for now focus on this one truth that will always be true in freelancing - "If you can help your clients bring in more money and customers, you'll be able to find work and you won't have to give everything away to get it."
This type of stuff's always going to exist guys, no matter how mad you get or how many people in the industry you rally - you can't stop people from doing this unless it becomes illegal (and it never will). But that's okay, you don't have to fight, you just need to learn to compete.
PS - If you haven't checked out what freelancers are saying about BASAS and VKFU, click here...there are some big names and nice endorsements in there.