Imagine you are a skilled laborer, and you are starving for work. One day you hear about a job opportunity at a construction company in the city. So you trudge downtown and get in a line with a bunch of other workers, hoping you make the cut.
To your delight, you get to go out on the job. In fact, every single person in the line goes out on the job, even those that don't look like they can swing a hammer, paint in a straight line or put up drywall. But a job's a job, and you shrug it off.
On arriving at the job site, the contractor in charge gives an odd speech.
"All of you have the chance of making $500 today!" he shouts with enthusiasm.
Many of the workers smile. Some give a shout, while others clap behind you in approval.
"But only one of you will actually get that $500!" continues the contractor. "All of you will work and put in a full day's effort. The best employee will receive this payment."
The shouts and clapping turned to groans as many of the workers look around to see if this whole thing is a joke.
"But don't dismay," the contractor interjects, obviously catching their concern. "If you all come back tomorrow, maybe YOU could win. Tomorrow, it might even be $1,000!"
The workers drop their gear and walk off the worksite to find an actual job that will pay them for their time and hardwork.
Does any of this story sound insane? No person would go work for an employer like this.
But this is exactly how websites like 99 Designs and Logo Tournament operate. These sites allow clients to post design projects. Designers can submit their designs to the project, and the client gets to choose the best design. The winner of each contest receives several hundred to a couple thousand dollars depending on the size of the project, and how much the client is willing to pay.
This is called speculative design. It turns what should be a respected career path into a gamble, and it turns great design into nothing more than a slapdash second rate product. The winner in this deal is the client, with 99 Designs and Logo Tournament coming in a close second. The designer loses 99% of the time.
If you are a graphic designer, logo designer or web designer, I would urge you to never, ever submit work on speculation. You are robbing yourself and harming the industry by contributing your hard-earned experience to the "Maybe I'll pay you" concept. If you are a client in need of graphic or web design, hire a high quality, local designer who genuinely cares about your organization, and will give you an excellent, well thought out design.