Im in the 3d industry, and we have been dealing with international competition for a while. A few years ago when all of these freelance services started up, you could see the change in business as clients went to these cheaper options. Fast forward to now, and we are seeing many of the clients return. The quality of work is definitely worse, but the biggest issues was the items not directly tied to the final output. If the client needed a revision, good luck. Being in a completely different time zone, language barriers, and software complications are only the start. We have heard stories that it was impossible just to get simple revisions figured out. Also, one of the components of our industry is the ability to make changes at any point. Several clients said that once the image was completed by these ‘freelancers’, that was all. We can simply open the file and make changes for a minimal cost at any point in the future.
At the end of the day, it does suck. However, I think that given some time, you will see that the clients that are serious about their product will return. There will have to be some education on why you cost five times more than the previous freelancer, but it should be easy to justify.