Try not giving the discount on your next 3 quotes. See if it meaningfully increases client resistance. It probably won't.
Can I tell you a story of something stupid I once did which nonetheless does not constrain me to always acting stupidly in the future? A particular prospect asked for a quote of my rate. I quoted my then-going rate and then, because I could not stop my fingers, said "But since we're Internet buddies I'll give you a discount." He said "OK, what's the final rate?" And I chopped 50% off. He accepted.
Note that in no point prior to that had he evinced any problems with paying the actual rate and, indeed, the difference between X and 2X is meaningless to him because a) he's a millionaire and b) neither X nor 2X comes out of his pocket, it comes out of a budget of a corporate entity he happens to own a lot of shares in, and both of us assumed (accurately) that the engagement was going to make those shares worth substantially more than X, 2X, or 10X more.
I set fire to five figures with two emails, and he probably doesn't even remember that conversation. Facepalm. But I don't have to facepalm next time, and neither do you.
I figure the awkward time zone difference for most U.S. clients has to count for some kind of haircut.
To be fair I hire a lot of developers on a contract basis. If you were in Vietnam (which is pretty much always off when we're on in SF) I would expect a discount. If I'm paying SF rates I'd rather have you in SF. There's a very real communication and feedback loop in design and dev that is difficult to deal with when folks are on the other side of the world. (Heck I expect a developer in Cleveland to be less expensive then one in SF)
All that being said, and to Patrick's point. One thing I learned running a consultancy was to never assume someone is looking for a less expensive solution. Once we stopped doing this and started charging what we felt we were worth, a lot of our cash flow issues started magically clearing up.
That makes sense. Essentially you're paying a premium for somebody that can afford to be in close proximity in a very expensive city. It only makes sense that somebody that can only work remotely and at inconvenient times for you isn't worth as much.
But the going Elance rates are ridiculous. I can make more money here with way less hassle as an English teacher.
Yeah but previously you said you could undercut because you were in Vietnam. Now you say you think you probably need to undercut because you are in Vietnam. Big difference. :)
But your point is well taken. If I do decide to shift my focus from my own products to consulting I'm not going to do it at too high a discount.