“How much will it cost?”
That’s the first question I get asked by a prospect.
“How much will it cost?”
That’s the last question I get asked by a prospect.
I’ve asked it. I bet you’ve asked it.
It’s a fair question; after all, you’ve got to make smart investments in your business and you can’t jump into a project blindly. But asking how much a website costs is a bit like calling your contractor and saying, “I want you to build me a house. How much will it cost?” He’d look at your cross-eyed for a while and then ask you a million questions about how many rooms, what type of flooring, whether you’ve already purchased the land or not… all of which have very real parallels when it comes to building a website.
To make matters worse, there can be a huge gap between the costs you get from different developers. Why is one offering a website for $500 and another asking for $5,000? Is one stupid, or the other a scam artist? How’s a person to make a smart decision?
What should a website really cost?
I’ll save you the effort of reading all the way through to the end if you’re here for “the answer”: there isn’t one. There isn’t ONE answer for the same reason there isn’t ONE website that looks, functions and evolves like every other website.
However!
There are some very real and relevant things that you should consider and a few things to know about how pricing works. Read on to get the inside scoop so that before you ask the question next time, you’ll be armed with information.
The Preamble: Where Does The Cost Of A Website Come From?
In a DIY world, most non-developers don’t understand the work that goes into building a website. There are plenty of tools that let you drag-and-drop your way to an online presence in a few hours and call it a website.
That’s not the kind of site I’m talking about.
I’m talking about a website that reflects your business, your goals, your brand. I’m talking about a website that adds value and is a strong tool in your marketing arsenal. One that is optimized for search. One that works across browsers and operating systems. One that doesn’t stick you with another company’s logo at the bottom of it because you got it for $49.00 and now you’re obliged to perpetually advertise someone else’s brand.
So assuming we’re not talking drag-and-drop, “stick your logo here” types of websites, let’s talk briefly about what goes into building one.
Content. Whether you pen a few paragraphs or hire someone to do it, it’s got to be written, organized, keyword optimized, human being optimized, spell-checked and proofread.
Photos. Whether they’re original or stock, someone has to find, organize, retouch and properly size and output them for web.
Design. There’s high end custom and there’s minimal, but someone has to consider colors, fonts, graphics and how they all work with your brand.
Structure. Someone has to think about pages, navigation and usability, and the best way to get users from here to there.
Layout. Headers, footers, sidebars, call-outs, pull quotes, opt-in boxes, social icons. These things don’t magically place themselves on the page, nor should they be stuck somewhere haphazardly.
Optimization. Beyond keywords, there are considerations for code quality, site speed, meta data.
Functionality. Opt-in boxes don’t program themselves. Nor do contact forms, shopping carts or other features. There are fundamental questions like “what happens if…” and “then what?”
Compatibility. With half a dozen common browsers and twice as many versions, multiple operating systems and platforms, not to mention mobile, someone has to make sure your site works.
Launch. Someone has to install your site on a hosting server, set up the DNS, get your analytics, Webmaster tools and sitemaps in order and make sure everything is working in real life, including all those opt-ins and contact forms.
If this sounds like a setup for “…and that’s why a website has to be expensive!” it’s not. It’s just the practical reality of building a site. There are things to do and things to consider. These are just some of those things and they all go into determining a cost.
Things That Can Affect The Cost Of A Website That Have Nothing To Do With The Website
All things being equal (same site, same requirements, same amount of work) there are other things outside the project itself that can impact cost.
Geography. If you ask a company in New York to give you a price for building your website, they are probably going to give you a higher cost than a company in New Jersey or Maine or Wisconsin. Are they scamming you? Probably not.
The cost of living in New York is pretty high. So is the cost of doing business. A company covering its SoHo rent necessarily has to charge a higher rate than one run virtually out of a couple of home offices.
Sometimes you have to make your decision, not based on cost, but based on value – which company do you want to work with? Which one has the most experience, the best portfolio, the most responsive people? A higher cost should not disqualify a company if that’s the one you’re confident can get the job done.
Experience. A less experienced person may charge less because he doesn’t have the full-blown skill of a seasoned professional. That’s not to say he’ll do a bad job, but it’s always a risk when you’re working with freelancers who build websites “on the side”, self-taught “learn web design in 21 days” types and people who are just starting out in the industry.
If cost is a big factor it might be a risk worth taking. Just do it with your eyes open and don’t expect things to be as thorough as they might have been with a more experienced professional.
Experienced developers can charge you more because they bring the weight of their expertise to bear on your project. An experienced developer may be able to do your site in half the time and charge twice as much, but remember you’re dealing with value and not cost. You should expect an entirely different experience and result.
Size. Of the company, that is. If you’re comparing costs between a single developer and a company, chances are the company price is going to be higher. Why? It has more to do with expertise than overhead.
In web development there are many skills. There are Photoshop and design skills. CSS and HTML skills. Copywriting and SEO skills. Programming skills, with subsets of skills across a vast array of programming languages. It’s unlikely that a single person can excel at all of these. So when you’re working with a single developer, you are naturally limited by what that person has in his skill arsenal.
But when you work with a company, you have a team of professionals, from project managers, copywriters and testers to CSS experts and programmers at your disposal. In this case, the sum of the parts is greater than the whole. It pays to consider your project needs before you jump at a particular cost option.
You. Here’s a little pricing secret among developers: annoying people get higher price tags. Now, I’m not saying this is you, but if it is, your developer is probably sitting in a dark room right now pulling his hair out and wondering just how much he needs to charge you to cover the cost of his stress-induced therapy.
Part of development is project management and if evidence indicates that you’re one of those picky, indecisive people who will disappear for months on end, hold the project up then show up with instant demands and want the shade of blue changed with each revision – well, you’re just going to pay a price for that.
Relationships. The world is built on relationships and you can probably negotiate a lower cost if you have a good relationship with your developer, if you’ve gotten a referral from a friend and can do some name-dropping or if you simply find a developer willing to work out a deal with you.
Remember, this is a service industry. There is no widget price. Costs are based on the factors I’ve mentioned here plus “going rates” and about a dozen other little nuances. So don’t be afraid to talk to a developer about the cost. But do keep in mind that there’s a limit to negotiation and a developer who offers you the $5,000 site is unlikely to come down to your $500 budget. At that point you should probably reconsider your goals and budget altogether.
Now That You Have Bit Of Background, Let’s Talk Money
Pricing is not a magic, secret recipe. It’s just the cost of doing business, plus the value of expertise, plus the time needed to complete a project in a particular set of circumstances with a particular set of requirements.
This pricing is based on what I’ve witnessed in the industry, what my company does when it comes to pricing and what I’ve seen works and doesn’t work in the real world.
No doubt some people will cry in outrage about such high prices and some will lament that I’ve given the industry a bad name by coming in so low. But I’ve worked with developers across the country, many good, a few bad, and this is the best consensus I can give you. This is what my competitors will tell you, too… minus a few bucks so they can appeal to your cost-conscious side.
I’m taking a “stacked” approach here, which means that as the price range goes up, you can assume that you get everything in the previous range plus some additional goodies. Of course, this might not be the way it works in the real world. For example, your site may have some specialized programing requirements that put you in a higher price range, but you may already have your logo and branding guidelines so you don’t need any additional creative work. Such is the challenge of creating a budget for a website!
$2,000-$4,000. This is most likely your entry-level range. In this price range you can expect a decent professional to put together a site for you that includes common functionality such as a content or image slider, contact form and opt-ins, photo gallery, blog and a branded design. While this range will afford you a site that goes beyond the generic template-look with features like a designed header or background and consideration for colors, fonts and layout, it’s not going to buy you a completely custom design. Often, sites in this price range are based on a WordPress theme or HTML template.
Even at an entry level you should expect basic optimization. That means your site is built to current code standards and optimized for speed, functionality and fundamental search requirements. While your content may not be optimized, the rest of your site – from basic meta data to sitemaps and other essentials – should be.
What you will not get at this level is copywriting or any content creation. You should come prepared with whatever content you want on your site and that includes copy, photos, videos or whatever else you need, plus your logo and branding requirements.
The bottom line: this is where you’ll be if you’re just getting started, a small service business, or one without ecommerce or data management requirements. Plus platforms like WordPress afford you the convenience of content management without the added expense of custom programming. It’s often a good place to start on a redesign, since you likely have your logo, branding and content ready and will only need to tweak and perhaps reorganize it.
$5,000-$8,000. In this range you can add a fully customized design. This is where you get to sit down with an actual designer and talk specifics when it comes to branding, style and layout. Custom sites tends to be more time consuming to plan and build, so if you have specialized site requirements whether for design or functionality, you can expect to hit the higher end of this range.
You can add basic ecommerce in this category but don’t expect too many bells and whistles.
The bottom line: this is where you’ll be if you want to move past a basic design and if you’ve got fairly simple ecommerce requirements and don’t need anything customized like inventory management.
$10,000-$15,000. In this range you can get quite a robust website with accommodation for more custom requirements when it comes to programming, photo galleries and portfolios, forms, or other functionality.
You should also be able to get some keyword optimization here and depending on the size of your site, you may also be able to sneak in some copywriting. As with the last price range, you should come prepared with your branding materials.
The bottom line: think of this in similar terms to the previous category but with “more stuff” and a couple of added bells and whistles; perhaps multiple photo galleries, quite a few product pages, or more complex user forms. It’s also where you want to be if you need someone with a copywriter’s eye to kick your content up a bit.
$20,000-$30,000. In this price range you can sit back and relax because you can afford to work with a copywriter who will take care of content creation and full-on optimization for you.
It also buys you sit-down time with a designer, not only for your website, but for logo and branding development plus mobile considerations, too, although it won’t necessarily afford you anything specialized like custom photography or video.
The bottom line: this is sort of the all-inclusive vacation of websites. It’s where you want to be if you want to take more of a “hands-off” approach to your website and let the professionals deal with everything from the creative to the content to the optimization and construction, with some bonus collateral materials like business card and letterhead design.
$40,000-$60,000. In this category you can reach beyond “website” into “application”. This is where programming and functionality become so custom that your site is built purely to satisfy your business needs. Very specialized content management systems, inventory management, integration with third-party APIs and other special functionality come into play here.
You can also get a pretty robust ecommerce site with inventory and specialized content management that caters to the nuances of your product line and pricing scenarios. Just remember, the more requirements and the more little details and functionality you add to your project, the higher you go on the price scale.
You’ll get a fully customized design in this category, including mobile and, if you need, branding. However, copywriting at this level becomes more complex as you are likely dealing with product descriptions or other unique types of content so I haven’t included that here.
The bottom line: if you’re a retailer, distributor, manufacturer or other corporate entity with specialized data management or ecommerce needs, this is the place to be. In this range, your developer will create a project specification that details your website needs and then build around them.
$60,000+. That little “+” is enough to mean “whatever you want, sir”. If you’re in this price range you probably aren’t too concerned with budget anymore and there isn’t really a point to discussing limitations.
The bottom line: if you’re a corporate entity with serious internal and external requirements, or maybe a startup with funding and an experimental idea, you can reach for the stars.
What A Website Should Not Cost
$500. If that’s what your site cost, I bet you’ll find at least one fuzzy pixelated photo, at least one mis-programmed form validation, at least one missed optimization opportunity. Maybe you can get your blog set up for $500, but you cannot build a professional web presence for that little. Even an unskilled developer charging $50 an hour can’t put together an optimized, functional, professionally branded site in 10 hours. Please do not tell me how you know someone who did it because I promise you won’t want me to look at that site and pick it apart.
How To Decide If The Cost You’ve Been Given Is Fair
So now that I’ve given you some pretty broad ranges and a lot of variables to think about, how do you take that and translate it into something that makes you feel confident signing on the dotted line and starting your project?
For starters, if you’re comparing costs between developers, make sure it’s apples to apples – you may not be able to do it exactly, after all there are a bunch of subjective factors involved as we’ve discussed – but you should know what you’re getting in terms of feature set and functionality. Then take into consideration the experience and portfolio of the individual or company you’re looking at hiring, the attention you can expect to receive and the general rapport between you and a potential developer. Even if the cost is perfect and everything else seems right on paper, you may want to think twice about hiring someone if you don’t feel that somewhat ethereal sense of connection and comfort.
Finally, you should consider one of the biggest and most often neglected questions…
…and then what?
Once your website is built, you’re barely part of the way there! You need an “and then what” plan for making sure your site is hosted securely and your data backed up properly. You need a maintenance plan, whether that’s you on a WordPress CMS or your developer making changes for you periodically. You need to stay on top of errors and alerts in your Webmaster tools and you need to get out there and market your website, track its progress via analytics and keep making changes as you learn what your visitors want and need.
That may be the job of your developer, your marketing company or simply you, but it’s certainly something to think about.
At the end of the day, I want you to approach your next web project with a bit more information than you had before so you can read the bottom line on your next proposal and feel confident that you’re being neither stupid nor swindled. With these guidelines, I hope you now have a place to start.
Are you freaked out yet? Do you find my ranges absurdly high or insultingly low? Are you still thinking, “yeah, but what about…?” Let me know! I’m happy to answer questions.
And if you’re looking more great insights into the challenge of pricing, check out this post from our friends at Long Island Marketing Company about how much a website should cost. It will help you get a big-picture perspective so you can better prepare for your next project.
Wow Carol,
What a great overview of what’s involved and why there are so many different quotes when people hire someone to build a website.
I’ve never gone that route before. The first site I had I built it myself but it wasn’t a corporate or e-commerce site either so there wasn’t any need for anything fancy. But I know if you want one that’s very functional, investing in someone to build it for you is the way to go.
I would prefer getting a referral before I were to jump into that area since you can really get into a lot of money creating a website.
This is a great reference so will have to be sure and bookmark this one for the next time someone asks me about what’s involved and the costs.
Hope you had a great weekend and are looking forward to a great week ahead.
~Adrienne
I agree, it’s great to get a referral. In fact that’s how we get the vast majority of our business. If someone has already worked with a company and had a good experience, there is a certain comfort level there. Especially because there are a lot of things to know and to do, and so much room to be unethical, if you can get a good referral, it’s worth its weight in gold.
Hi Carol,
Wow, certainly a post I can refer people to if I hear anyone looking for advice about website prices before they decide what’s best for them. Sometimes I run into people with such questions.
I’m not at a point where I need to be spending thousands for a website, yet, but when I do, I know where to find you 🙂
However, I do have a professional theme, a custom header and this coming week a custom designed opt-in form. Not bad for now 🙂
Thank you for your professional input and expert information.
Have a great day!
I think your site is a little different than what I’m talking about since you’re more blog-oriented. It looks clean and professional as it is. But I’ve seen lots of “professionals”, people like financial planners, retailers… and they have sites that are just a big mess because they didn’t know what to look for and they picked some cheap developer who didn’t know SEO from a hat. Plus there is a lot going on “under the hood” that may not affect the way the site looks but can sure affect how it gets found in search and adapts to browsers. So if you ever want an upgrade or redesign, let me know and I’d be happy to guide you!
Hi Carol, Wow….I never in my wildest dreams knew how expensive a blog can be. I myself am not at that point yet, but it is great to know the difference between blogs and what they can and cannot do.
You really did your homework Carol.
As for me, right now I a comfortable with my blog, but I know it needs to be updated soon.
I did however, had it done because I would never be able to tackle that job!
Thanks for all the advice as usual Carol,
Donna
Hi Donna,
I was actually talking more about a business site than a blog. A blog can be part of a business site, but there is usually a lot more to it – info pages, service pages, product pages, etc. Setting up a blog, for someone who knows what they are doing, can be pretty quick, even to get it looking halfway decent and optimized in general, so that’s not usually a gigantic project. The more you design it, the harder it gets because then of course you have to work with graphics and getting a specific look. But blogs tend to be simpler. Anyway I am sure there are ways you can update your blog without a giant investment. if you ever want some input, just let me know!
Hey Carol, I see that most of the previous comments start with WOW, and I would have to agree.. .WOW.
I also had no idea of the cost of building a business website. This is really eye opening stuff.
I know there are exceptions, but I believe in the old adage, “You get what you pay for.” This doesn’t mean that you can’t find “deals”, but in general if you are dealing with a professional who is fair and honest, the quality of your site will go up as the price goes up.
It would depend on how much “site” you need. This is something you need to decide for yourself.
Eye opening post! Will definitely share with my readers.
You hit the nail on the head, Bob… you get what you pay for. No doubt there is a range of costs involved… $2000 is a lot different on a budget than $4000 and you may be able to get relatively the same site depending on where you go and who you know. But there is no awesome $500 site, that I can tell you. Like I said to everyone else who has that “wow’ moment, a business site is different than a business blog. A blog is by far less complex and many fall in the “DIY” category. But when we’re talking branding, user interface and usability, content and functionality… it takes time and effort!
Wow! Now this was great Carol. I have dealt with a few designers and you are completely right. When I helped design my last company’s sight we went with a designer that I recommended. He charged us $5000 and he did a great job. The problem on my side was my ex boss. He tended to be on the cheap side and made my life a living hell when it came to making a decision. I knew what I wanted and he didn’t.
This made for a tense designing period and I KNOW we were on his last nerve. I felt bad for the guy and my boss kept lolly-gagging the entire time. Even when it came time to pay him, he made this guy wait and I went over his head to get the CFO to allow me to pay him via credit card. It was ridiculous. So I completely understand what people put them designers through.
On the flip-side I have seen designers charge stupid low rates and I looked at their portfolio to see why. Luckily the designers I have run into designed great websites, but the ones that charged the most, created REALLY GOOD websites. You get what you pay for and at the end of the day, they have have a business to run.
My boyfriends daughter is a graphic designer and she tells me horror stories about the indecisive people she has dealt with. I don’t think I would have the patience for it and people would get on my nerves real quick. People I have done work with as the consumer have been great. I just make sure the designers style is what I want to work with. Price is honestly the final deciding factor, but if I don’t like the style they create sites with, they won’t get my business. Excellent post girl!
I see you’ve had some experience with this! There is definitely a “get what you pay for” element that so many people don’t understand because they think you just open up an HTML page and stick a few photos in there. Plus everyone has Photoshop or something similar these days so everyone thinks they are a designer and it should just be easy.
I’ve seen plenty of designers charge what I would consider “too much” but in the end they can get it, because they have the experience, they know what they’re doing and they make their clients comfortable and happy. On the other hand, there are designers who charge too little because they get railroaded into it – either charge less or lose the job, and sometimes they just want the job.
It’s such a tough place to be because there is such a giant gap in skills that is hard to explain to someone who is just looking at a price tag.As an aside, I remember once, I was having a conversation with a client about a site we were working on for him and I mentioned the design and he said “what design? There’s no design.” Basically he was overlooking all the layout elements, the typography, the colors and dropshadows and everything and looking for some big flashy graphic in the middle of the page. You sort of just sigh and move along…
This is a really amazing article Carol i really enjoyed reading about all the cost’s and i had no idea how much it cost’s, so I will be referring back to this post when i need to get an idea of cost’s. Thank you for sharing this with us it is very interesting and useful.
Thanks Andrew, I’m glad you found it useful. There are so many things that go into figuring out a cost for these types of projects that they can vary pretty widely, but at least you have a place to start!
That’s the only thing that you can’t avoid dropping money on when it comes to branding or doing any kind of business on the net ( unless you’re a kick ass designer).
your site is your clone in the cyber space!
best
Akos
Akos, I never heard it put that way before but it’s an interesting perspective – your site is your clone! It definitely represents you so I agree, you want it to be the best it can. Thanks for your thoughts!
So… I charge way too little… 😀
Probably! It’s a lot of work to build a good site. If you’re good at it and know what you’re doing, charge for the value of that.
Well said and thanks for sharing this. I concur with your points; the biggest challenge is with new sites as the client usually does not have the expertise/knowledge to know what the value is and why a good site is so important to their business/brand.
That’s very true, Elsie. And the problem is that of course nobody wants to spend “a lot of money” so without understanding they go price shopping. A pretty good number of my clients come to me “on the rebound” after they already tried the cheap thing and ended up disappointed and unsuccessful. Unfortunately that ends up in money wasted but sometimes people have to learn the hard way.
Hi Carol Lynn – very eye opening post; glad I checked my LinkedIn groups this am and found it. The only plus I’d add is to have that ‘and then what’ conversation early in the process. My USP is that I’m a marketing guy by trade and experience, and usually sub out the sites I’m asked to build. My point is that if the conversation never advances to how are you wanting to optimize and market your new site, then you may be dealing with a pure designer. Your site may win awards, but sales? …maybe not.
We once were firmly in the $4K range for a semi-custom site, but I’ve fallen into the habit of ‘helping people’ with low budgets and know that its time to return to higher prices.
Excellent post, thanks so much for sharing it!
Thanks, Scott, glad you appreciated all that! I do agree, the “what next” has to be part of the bigger conversation, not an afterthought. It’s still surprising how many people want a website but don’t really know why (except they “need one”) or what they want it to accomplish (get on Google?) I’ve also worked with designers who build sites more like an art project than a business proposition. Drives me nuts, too, because like you said, it’s not about winning awards, it’s about making sales.
Over the past few years I think a lot of us have gotten into the business of “helping people” with the bad economy. But that has to swing in the other direction or we’re just devaluing ourselves. If someone wants the cheap site, they can get the cheap site – just not from us 🙂
Hi Carol,
This was a great article and I’ve posted it out to my friends on facebook and linkedin. I am an online marketer that does a lot of web design. I’ve been catering to those “on a tight budget” or “try to help me out” types for too long. After looking at the books, there’s no way I can sustain a company at the hours and rates of return I’m actually getting.
Thank you for giving me the kick in the pants to charge what I’m worth. It might be harder to find jobs, but at least I’ll be happier with the end paycheque.
Believe me I understand the struggle – you want the work, but you know it’s worth more than someone is willing to pay. The trap is that if you keep doing those types of projects, you’re going to be so busy that you won’t have time to pursue or do the better projects. You just get stuck in a cycle of trying to keep up with the small/low paying jobs you get. It really helps to think about it in terms of time. You can get three low paying jobs and work three times as hard, or one good one and maybe make a little less overall but work a lot less, too! And have time leftover to prospect for more. Stick to your guns and what you’re worth. When you’re running a charity you can “help”. Until then you’ve got to run a business and make money. Good luck!
I second that Kevin. We are bringing both business schematic expertise AND branding to our website development projects. Huge time in processing graphics, commercial copywriting, etc. I just got my kick in the pants too.
Glad there is so much positive kicking going on here. I think we underestimate the amount of time and expertise we invest in projects. So many people think it’s simple, especially with all the DIY stuff out there. Now go raise your rates and get some good work 🙂
Carol,
Thank you for this!! I loved the article. I’m going to keep it bookmarked for when my lower-end quotes to clients get some pushback.
Many clients I work with seem to think that web design and development is like an à la carte buffet table and that they have a base price (for some reason, I hear $500 come up a lot in discussion for a full-fledged website). This opinion needs to be changed, and I think this article will give professionals the confidence to charge the premium rates they should for their work.
Honestly, if a client doesn’t want to pay your rates for your work, don’t shortchange yourself to accommodate them. There will always be clients willing to pay you what you deserve for your professional time.
I’m definitely adding this blog to my feed reader. Looking forward to future awesome articles!
Thanks, Cliff, I’m glad I could contribute to your better rates 🙂 I don’t know where that $500 comes from, either, but it definitely comes up. Some people just price shop and no amount of convincing will get them to understand what’s involved in a site and why. Those people are never going to be your customers – and if you try to win them over, you’ll always have aggravation and no matter how low the cost they will always want to cut. Go for people who appreciate the value!
It is hard though; I just lost 2 deals and definitely based on price. Client wanted all the functionality but of course got sticker shock; am trying to hold my ground. Good feedback/input from everyone..tx..
HI Carol,
Really a first rate article on what goes into building a website, and the best I’ve seen in terms of justifying the prices that good designers deservedly charge.
One point you didn’t touch on, that often comes up is the thorny issue of overseas outsourcing. You covered location, but many potential clients often compare quotes with the alternative of using companies based in India, Singapore, Eastern Europe etc. and feel they can leverage the lower cost of living abroad to negotiate your price.
My main argument against this is that the technical skillset might be the same, but there are issues such as time differences/accessibility, and the language barrier, which extends beyond mere words and into semiotics etc. Other cultures simply have very different understandings around the meaning of colours and the relationship between elements on a page for example.
Of course, all this can be an advantage if you’re looking for someone to handle localisation in a new market, but then I’d expect a reputable overseas company to know this is what you need, and again, charge accordingly.
I’d also like to say that one should generally avoid negotiating on price.
What I am open to however is negotiating the level of service I’ll provide for a particular price point…
You’re absolutely right, I did not touch on outsourcing! That is an entirely different animal, for many of the excellent reasons you brought up. First, I don’t believe that the skillset is the same. That’s not to say there aren’t many talented programmers and developers in the countries you mentioned but that is different than having an understanding of web, marketing and the full “package” that goes into building a successful site. I believe that part of a good site is the relationship you have with a developer; namely, how much input your developer gives you, how much time goes into understanding a client’s business and goals and how much personal investment both parties have in the project.
I’ve had some experience outsourcing and I have not enjoyed it. The time difference certainly led to accessibility issues and for small businesses there’s really no option to “drop by” for lunch to chat about the last few details of a project. There are also language and cultural barriers which lend to disconnects, as well. As you pointed out, the expectations and understandings are different.
I think that outsourcing can be beneficial for large projects and for specific tasks (and localization as you mentioned). But for small businesses, the overhead in time and effort is not worth the balance in money saved.
I understand that for people who are price shopping it seems like a great option but there is going to be a cost somewhere. Whether that’s in lost time, or lost revenue when something goes wrong, or simply a lack of effective understanding of business goals and needs.
To your final point, I absolutely agree that negotiating on cost is self-defeating. I much prefer to meet a budget by fitting the level of service to match – within reason, of course.
Thanks for your comments and for sharing your thoughts!
Carol,
Great article! I’m so glad I found it on Linked In. I’ve marked it and will link to it from our site.
Just the other day, I got a call from a fellow that says “How much does a website cost?” I answered him, with “Suppose you want a house and you say to a contractor, how much will a house cost?” He started laughing…he was a contractor.
We had a conversation that followed along many of the points here.
But he wanted a “$500 website.” I referred him to a freelancer that could take care of him.
A couple days later, the freelancer contacted me and said that this contractor wants some SEO so he can be ranked on the first page of Google for a handful of keywords…and what would it cost for us to do the work. 🙂
Jane, that story really made me laugh. The irony is too much to bear. I predict that $500-site-guy will soon be back to ask for more services that otherwise would have been included in a “good site” up front! A lot of people need that first “wow, I really blew that $500” experience before they believe what developers try to tell them every day, and that’s you get what you pay for!
“…and than what?” Than is a comparison. Then is a step in time. The question should be ” and then what?”
A hundred proofreadings could not find and correct all those insidious little typos. Thanks, and fixed.
This is a great article – one I’ll be sharing with past and future clients!
Thanks, Debbie, glad you found it useful!
Hello Carol — This is a great article and answers a lot of questions for small to mid-size companies.
What I have noticed, while being in the tech space for quite some time, is that small to mid-size business owners do not consider their website as an extension of their core business, but instead like a billboard or a commercial and then they ultimately fall into the 5k and under trap.
Once business owners can begin to think of their online real estate (presence) as a new showroom, warehouse, or even product, then they can open their minds to the business rules and logic that need to be thought of prior to “building” a website. I mean a contractor just does not start digging a hole in the ground when someone wants him to build a house, or commercial building.
There is much architecture and planning that has to be done prior to the “hole” being dug to have sustainable long standing structure.
The foundation of a website is built on Strategy, Business Analysis, and ultimately User Experience. Working with a solid firm will allow the client to define the requirements of the website up front and look for new opportunities that will ultimately increase users, as well as revenue.
I’m glad that you shed some light on this subject, because due to the ever increasing DIY website dev market consumers really need to understand what it is they are paying for and what they will get for that price.
Thanks,
JF
Very true, many people don’t look at their sites as a valuable property. It’s just some “thing” they do because they need a website and whatever they get is good enough. I realize that not everyone has several thousand dollars to spare but it’s an investment, like any other. A good website does all the things you mentioned – builds brand and revenue and opens up opportunities. You can’t do that with a drag-and-drop tool. I love the contractor analogy because it’s so relevant. The funny thing is, people always understand it and agree – just not when it comes to the price!
Dear Carol
5 minutes of reading your superb article has given me the jolt I needed to wake me up on a train to an early grave!!! I’ve been working 25 hours every day for peanuts for years, worrying about missing a client project through pricing too high. In fact I’ve been under pricing to a ridiculous extent and making the mistake of equating “busy” with “successful”.Your breakdown of the complexity of web creation and the final crunch price points has made a deep impression on me and from today I shall make the changes needed to my price structure and work day. I would really like to quote your article for my web clients. Is it okay to use parts of it on my site with reference back to you as the author? I’m in the UK so I need to convert $ to £, and so on. Thanks again Carol for an outstanding piece of work full of insight, written with clarity and wide ranging impact.
Paul
Wow, I’m really happy to hear that I could help inspire you! It’s very true that when you want the work, you may compromise much more than it’s worth. But in my opinion, you’re better off with one well-paying project than 5 poor ones. Otherwise you end up, as you said, “busy” but without the income, and without the time to explore new prospects and opportunities. You may certainly share this post with you clients if it helps you to get what you’re worth! I appreciate that, and I hope you’ll check back after you’ve had some time to try your new approach and let me know how it goes.
Well, THAT said it all. My agency develops websites, newsletters, traditional media, PR, and a host of other marketing vehicles, and we definitely find the cut-rate mentality operates more when it comes to the web than with marketing plans, direct mail, sales promotions, or just about anything else we handle. Forget the tire kickers and focus on professionals who are serious about their marketing. You’ll be happier in the long run.
You got it! And yes, people do tend to be a lot more averse to spending money on a website. I’m pretty sure that all the DIY options devalue the process and give people the impression it’s simple and inexpensive. Most people don’t know where to start with a promotion or mailing, but they probably do know how to drag and drop in WordPress. Thanks for your input!
HI Carol,
Your article was incredibly helpful. I am a graphic designer moving into freelance web design. My business partner and I are writing a business proposal for our first big (by my standards) client. Your article was one of the first that came up answering many or all of my questions – putting my mind at ease.
Thank you for sharing and I will definitely pass this on!
Andrea
That’s great, Andrea, congratulations on pitching your first big client and good luck. It’s a little nerve wracking but it sounds like you’re doing your homework, so you’ll be prepared. Glad I could help on your journey. If you get a chance, stop by and let me know how it goes!
Hi Carol,
Excellent article that is spot on, thanks for taking the time to spell this out. I tell my clients when they ask me that question to google “what should a website cost” so they have the same info I have. Think I will link to this from my site as well.
Regards,
John K
Web Developer/Designer
Boulder, CO
Thanks, John, I’m glad you found this helpful. It’s challenging to price a project because every one has different needs but at least we can use a general starting point to guide us.
This is by far the BEST post I’ve ever read on website pricing!
Thanks so much Carol for writing this…I especially am grateful for the line: “Here’s a little pricing secret among developers: annoying people get higher price tags….Part of development is project management and if evidence indicates that
you’re one of those picky, indecisive people who will disappear for
months on end, hold the project up then show up with instant demands and
want the shade of blue changed with each revision – well, you’re just
going to pay a price for that.”
A developer needs to only go through this ONCE before it’s necessary to start charging for the ‘Annoyance Factor.’ We have no choice.
I’m glad you found this helpful. One day I’m going to be brave enough to name that clause in my contract “The Annoyance Factor”.
Excellent article, working on a similar article for one of my websites, I provide Online Presence Consulting, so the Question how much should it cost comes up a lot, I might reference you if that is ok, obviously with a link back.
On another note, we run three brands in the sunny island of Malta, one provides those fake websites you mentioned in your article 🙂 Forgive me lol yet it is a market. On another note we have another brand which provides high end custom solutions, including application development for businesses. Your price ranges are indeed accurate and realistic as a consultant I come across many clients and deal and negotiate on their behalf with many web design firms.
I tend to save them a lot of money on the annoyance factor. lol
I’m glad you found this helpful, CJ. No doubt there’s a market for the lower end websites or we wouldn’t be talking about them! It depends on what a business wants and how they approach their web presence. The annoyance factor resonates with developers a lot 🙂 Of course as much as we’d like to, we don’t call it that – we put it in nice terms like “re-initiation fee” for project delays and “budget contingencies” but in the end it comes down to “if you’re a pain and you mess up this project, you’re going to pay for it!”
Thank you so much for this article. I currently have a small word-of-mouth business which could benefit from a very basic website. I studied graphic design in college (pre-computers) and tried to set one up on WordPress… Let’s just say, “It took forever and it is nothing I care to share.” In addition to needing a real designer to set that mess straight, I am working on business plan for a much larger business which will need to FIND customers online. Your article has given me a lot of helpful information on what to anticipate in the future. Thanks and I can’t wait to read your bestselling novel (set in Barcelona) real soon!
Thanks Laura, I hope to *write* that novel real soon 🙂 I’m glad this helped you – there is definitely a lot to think about when it comes to websites. Design is a great place to start but of course there are tons of other things to consider (as you seem to have figured out already!) A website doesn’t have to break the bank but it shouldn’t be “cheap” or you could damage your business and reputation. Good luck with your business – let me know if I can be of any assistance!
Your article on web development is indeed valuable. Two other areas of importance to me with this start-up conmpany are winning a patent and generating a marketing plan. The patent process is straight forward. Have you written about market plan generation or can you recommend guidance in this area?
That’s one topic we haven’t covered and falls a bit outside our focus here. I would honestly just suggest starting with a Google search. There are lots of resources from other organizations that focus on that area. You might also consider a class at a local college. You can often find Adult-ed or CEU classes that span a few days or weekends and focus on something very specific like that. Best of luck and when you’re ready for more info on web, search or social marketing I hope you’ll return here!
Awesome article. Like mentioned this is the first article that I’ve read that clearly outlines some of the hidden costs us designers and coders factor in when bidding on projects. I have been a professional designer for nearly 20 years. I have designed and worked on sites that cost in excess of $100,000 (think of large entertainment companies and the like) as well as small startup sites and even small mom and pop sites. The small mom and pop clients tend to be the most difficult in my opinion, and the ones I try to steer away from. But I always get a call or meet someone at a party who owns a small brick and mortar store that wants me to design their site. I often take these jobs in between the larger projects if I have time. I would say half of the potential clients are shocked that I quote them an estimate of $3,000 or more. Some people don’t see the value of quality and experience. Sure you can get a $200 template site, but they more often than not do nothing for a business. Even customers know a templatized generic site when they visit one. A well thought out brand that goes from marketing materials, to site design, to the storefront are priceless.
I’m with you 100%. I couldn’t possibly quote a site for less than $3000. I know that seems like a giant price tag for a small business but if they want a good site it’s an investment they have to make. The problem with working for the mom and pop shops is that their needs are exactly the same as the bigger businesses – they need a well designed, optimized, well written and branded site. They may not need as many pages or as many bells and whistles (like databases and such) but the fundamentals are the same. They just want it at a fraction of the cost. The smart ones recognize the value!
Wow, great article and helpful too. I’m a developer and it’s sad but I do have to turn cash strapped customers to godaddy’s website tonight. Usually they come back understanding the value of a professional. Thank you for spelling it out so clearly!
Sadly, a lot of people do have to spend a few dollars poorly before they invest wisely. I’ve had many prospects tell me “I’ve already spent money to build a website but it’s terrible and now I don’t have any money left to spend to redo it.” Wish I could’ve put a wedge in front of their decision to go with the first option!
lucky Americans i find it real hard being in India and being a web developer , people here bargain me to make website for mere 100 dollars and i am doing it because i have no other option i have to take care of personal needs .These low level people who develop websites using DIY and charge clients so less. Ultimately client doesn’t understand a thing when i tell about technical stuffs
It’s definitely a challenge to find people who understand the value of a professional website. Part of our job as developers is to be teachers, too. we have to educate clients on the value of our services beyond the simple end product of a website. I know it can be a tough road but there are good clients out there!
Great article! However, times they are a changin’. There are tons and tons of web developers out there now adays armed with all the skills you have mentioned who need to eat, and are willing to do it for much less / hr. Where did they get all these skills? They grew up with it! They could be 20-something but they have been learning it since they were wee little ones. I think the days of charging $50 / hr for web design are gone. There is so much more competition now from other developers who are willing to work for close to minimum wage. And I think you would be surprised with the level of quality they produce for $500. And when it comes to the clients; in a bad economy they don’t care how much more awesome a $10,000 site is. They have $1000, so that is what they have to go with. No amount of convincing is going to change that. Also consider the site fiverr.com. If you haven’t heard about it, it’s a site where people post what they would do for $5. There’s an entire section devoted to web development. And you can see some of the things that you might charge thousands for that someone else may charge $5 for.
Thanks for sharing your opinion. I think pricing is one of those debates that we could have all day. You made some good points. Here are my thought on a few…
To your point that there are 20-somethings who grew up with coding/development, I’d like to add that they are fewer and farther between than you might think. The majority of college-age people are a whiz on a smart phone but can’t accomplish simple computer tasks like downloading a browser. I can tell you this from experience. Someone should call them “the iPhone generation” because there are so many everyday tasks that are essentially done for us now, by smarter phones, smarter computers, smarter software – that the truly talented people seek their skills out and hone them. They don’t simply come by them because they grew up in a tech world. It’s no easier for a 20-something to learn technology now than it was for a 20-something to learn it 20 years ago. And the current 20-somethings don’t have the benefit of 20 years of experience with customers, best practices, accumulated knowledge and experience, and making mistakes.
I agree that there’s a lot of competition and somewhere, if you look hard enough, you’ll always find someone willing to do a job cheaper. But there’s a point of diminishing returns – you can negotiate a cost down but if you go too far you’re not going to get the same job done.
Yes, I’ve heard of fiverr and no, I would not consider it a resource for a quality business website. Part of the short-sightedness of simply price shopping is that people fail to recognize that a website is more than the sum of its pages. It’s part of your online brand and marketing. It should come with strategy, planning and vision – that’s asking a lot more than “put up a home page with a blue font”.
As for people who “need to eat”, I completely understand that someone would do a job for a lot less because they’re motivated by needing the job. But doing the work – especially doing the work right – takes time. People taking on these types of projects for peanuts aren’t going to eat much more than that. They’re going to spend a lot of time working on a project for very little money – which means no time left for working on a project for decent money. I do empathize but I also wish for THEIR sake that they would stop doing jobs for so much less. They’re just undercutting their own value.
People pay for value and quality. A Kia will get you to work and back but they’re not putting BMW out of business, are they? A utilitarian site will get your business rolling, but to do it in style, you’ve got to upgrade!
I want to add one last thought, and that’s that you’re right – times are changing, and prices are coming down. Believe it or not, I charge less for a website now than I did five years ago. The tools are better, the technologies are better and I can package my experience into half the time it used to take to build a site and still come out with something of value. That means I’m making less money per site but in reality I’m doing more sites in less time and getting more customers because the price is more affordable. Can someone do it cheaper than me and just as well? Sure. That’s why there’s competition 🙂
Thanks for taking time to share your thoughts! I appreciate that and if you disagree or have any other thoughts I’d certainly love to hear it.
Excellent article and description of return on investment for web!
It’s becoming very hard to approach clients with a logical price tag for a design or redesign when the world is becoming inundated with cheap dime a dozen templates and themes that will never allow a company to really develop their brand and use the web as a marketing tool.
And to the people here saying you can get a site for $500… by all means, go for it! Please share URLs because I’d love to see the results. Heck you can go out and buy a car for $500 too. That doesn’t mean it will run, get you far, last that long, not need ongoing repairs, perform well, look good, etc. and that cheap car probably isn’t being used to generate you clients/business/sales.
At the end of the day if you find that so-called starving programmer/developer willing to work for $500 I highly doubt they’ll put much effort into your site because they’ll be spending a majority of their time looking for real/realistic work…. Also, keep in mind if they were good designers/programmers/marketers they probably wouldn’t be desperate for your low-ball work.
You said it, Robert. Part of the pricing challenge is explaining the difference between “I did it myself with a theme and a 5-minute WordPress install” and a real marketing and brand-worthy website. I, too, would like to see these amazing $500 sites. Heck, I’d outsource my sites to them and make a few bucks on a markup to do zero work!
I totally agree that if you undervalue yourself then you’re never going to get good work, and if you do good work there will always be someone who wants it.
Love the car analogy. I use that one myself. Thanks for your comments!
Great insight Robert. We are primarily in the real estate web site, SEO, social media business and Real Estate Agents and Mortgage Brokers tell THEIR clients they need to hire a professional but then come to us because “gurus” (real estate / mortgage wash outs turn marketing experts) tell them they can get a free wordpress site and do it themselves. Ironic. Anyway great article Ms. Rivera and great contribution Robert!
There’s always going to be that DIY conundrum. I wonder sometimes if the future of web development is going to be purely consultative. (“How do you configure this plugin?”)
Some years ago, “ugly” basic simple websites were great because that’s what we could do. As technology advanced, websites became the realm of the technical and the programmer, the artist and the designer. We could do all kinds of great things but you needed skills to do them.
Now I think we’re moving on again and websites no longer need to do great things – they need a blog and a sidebar. We tolerate a lot less in terms of quality and interaction and as the tools get better and easier, people are going to be more inclined to do things themselves.
Big brands with budgets will outsource to their marketing teams and agencies, but the average small business is going to look for the free tools. It will be interesting to see!
hi carol,
just want to ask what is the ideal to rate/price
a client to build a responsive real estate in wordpress? is $500 is just right ? or could it be $1000 to $2000..ty
That’s impossible to say – it’s based on so many factors, many of which I’ve outlined here. Consider the project and client needs and the amount of time and resources you need and then you can determine a price that works for you.
A really good blog post Carol, I was inspired to write a blog post after listening to a new client of ours who had spent time going through a range of quotes from £800 to £12,000 for a basic website even some of the add ons like blogs ranged from £200 to £3,000. I think lack of transparency in such matters does our industry no good. Anyone who’s interested my thoughts are captured on this blog post, my approach is a little different, but I do think the two blogs complement each other
http://www.wsiyorkshire.co.uk/blog/how-much-should-i-spend-on-a-website/2012/10/
or http://bit.ly/WSIWebsiteCosts
you may need to pate into your browser
I was inspired by exactly the same thing – there are very different prices for very different reasons and you’re right, there’s a certain lack of transparency that makes everyone look bad. There’s no need to mask costs. If your work is worth the price, then clients will pay it. And clients who won’t are not your audience anyway! Your article touched on some great points – process, procedure, management, experience… all of those things don’t come easy or cheap. We spend years honing our practice and you just can’t get the same results “cheap”. Thanks for sharing your post as well, the section on ecommerce especially highlights so many things people don’t think about.
Carol, this is the best post I managed to find on the internet about website pricing. Thank you so much. A website with a considerable amount of videos, in which price range will it be? Thanks again.
Thanks Ann, I’m glad this could be helpful. Not sure what you’re looking to do with video exactly… do you mean how much would it cost to actually produce the video or just put it on the site? Putting it on the site is easy – I would have the client set up a YouTube account and host the video there, then just embed it on the site with a link. That’s something you can do in any price range because it’s just like putting in any other content. As for producing video, wow… that could be something you do in a few hours with a camera on your laptop (like a tutorial) or it could be thousands of dollars for nicely produced voiceover, music, animation, etc.
Love the information…Soooo true. I don’t think most clients understand all of the time and thought that goes into a website project.
One can only hope that after educating them, they get the point!
Hi Carol
fantastic article and as somebody who thinks they have a great idea for a start up I would love to invest 30-60k to get the best possible window on the world and fully appreciate the value of doing this. Ive dound a website designer/developer looked at their back catalogue etc and are loving their work but my question is this:- Is thier scope in web design development for risk sharing?
If for instance I offered a flat fee of 5k with 1% equity/dividend in business that could see them eventually receive 30k per annum plus for ever plus capture web host/redesign upgrade etc. Maybe this is considered cheeky/rude ?
I don’t think it’s rude, but if you want to take that approach then I would suggest you have a good pitch. Bring your business plan, your revenue projections and a good baseline for someone to judge the risk. It all depends on the development company and your relationship with them. Some may be willing to take the risk, others not. It doesn’t hurt to ask. If they say no, you can either choose to pay their development costs or find another company.
Hello Aliwin,
If you are looking for a website of that quality with that pricing plan and the developer you are currently speaking with does not work out please contact me.
I am a developer working on launching my own start up doing websites. Since my portfolio is not as developed as others I am charging less than Carol outlined in her article (which I found very helpful by the way, much thanks). If you are interested I would be very happy to discuss the possibility of working together.
As a note to the author, I apologize if it was inappropriate for me to post this type of response. I did not find anything to say yay or nay, so again my apologies if I was in the wrong. Just let me know, and I will behave correctly in the future.
Very nice and usefull article Carol. However i think that geography should be also under consideration. I mean that, in case you work globaly as a freelancer with customers from all over the world, i think you cannot charge the same value a customer from London the same as the one from Rome, Italy.
What do you think about?
Hm, interesting question… I think there are certainly different price points for different geographic areas. Even within one country there are different price points – as I mentioned, just going from New York to New Jersey to Colorado will change the price point that a business can afford. And certainly the price points are different between countries.
However, I think that it’s a little harder for you as the service provider to change your pricing based on geography because whether you’re doing business with someone in Tennessee or Taiwan, YOU still have the same cost of doing business. So if you lower your price for someone then you will be lowering your profit.
If that is something you can afford, and it balances out against projects that make you a higher profit, then it may be worth it.
Have to agree with MorberMarketing. This is a fantastic read, and essentially nails web site pricing on the head. As I was reading this I was quoting for a very large project in the scope of $40k – $60k, and it all rang true. So well done.
Thanks Scott, it’s good to get validation especially when a lot of pricing can seem vague and eventually becomes our job to convince clients why it’s fair. Good luck with the project!
Great article Carol. I’ll be referencing it to prospects.
I have seen in the past 10 years that I’ve been in this business that metropolitan areas are definitely higher than rural. I happen to be in a rural area where pricing is critical. I brought an extensive business background of 30+ years in dealing with small business owners which is my target market. My biggest concern when I started was what to charge. Originally, I just developed sites but changed to a fixed monthly retainer and do everything from domain name registration, to design, development, hosting and continuing support including content changes for most sites.
Now that may seem crazy but it has worked for me. What I do is estimate what I expect to spend on the site for the first two years, multiply by $60/hr and then divide by 24 months. I try to ensure that I do as accurate calculations as I can for what I expect to spend on a site for those first two years and then try to stay within the hours I have estimated. I rarely make my target per hour rate the first year which is to be expected with all the upfront work but I do make it on every client after the first year.
My small business clients really like having a fixed fee to fit into their budget and it provides continuous cash flow to me. In fact, I have even reduced clients fees after the second year when I was making too much per hour. Clients love it when they get my emails telling them that I’m ‘reducing’ their fee unilaterally. For me, this gets back to my own personal opinion that I know what the value of my work is and I expect to be paid but not excessively.
I take the long view in that I like to have clients for many years and not just a concurrent string of 3-6 weeks jobs. I have many clients that have been with me for 7+ years. So I figured that after the first year, the $60/hr that I average is reasonable for my area and for the skills that I bring to the table. This is only one pricing strategy and it works for me.
Luke, I LOVE that idea. It’s something I’ve thought about doing for a while, especially, as you stated, since small businesses often can’t come up with a large up front budget, but are happy to pay fixed monthly fees. You inspired me to give this strategy another look.
The great thing is there’s the perk to them of low cost and the perk to you of consistent income. And like you, I would also much prefer the long term client relationships.
I worry though, about people who would skip out after a few months. Do you have a required initial contract length?
Just curious … what would be the average retainer fee you charge? This sounds like a really great idea but I would be concerned a client might terminate the relationship before I’d be able to make a profit. Btw, we are now doing ongoing changes, hosting, etc (and charging for these services) and I think a flat fee would be attractive to some clients. Thanks for the idea.
This is a common problem for designers and developers – I wonder if you both would be interested in connecting and sharing ideas? Some kind of web-mastermind aimed at exploring pricing and strategy? Let me know (you can add a comment or shoot me an email via the contact form and I’ll get back to you!)
Thank you for this beautiful article! You made my day as a web developer that has spent 7 years of studying and gaining experience! And I know there is even more experienced developer that would agree.
Thanks Alex, I think it’s tough for us – whether just starting out or experienced – to say out loud “this stuff is not easy and not cheap”. Especially in a world where there is so much DIY stuff and so many people putting together junk work for low cost. Quality is always worth its price!
Even seven months after first reading this article I still find it useful and I like to share it with my prospects and colleagues too. I am even thinking to translate it to my language and post it on my own future blog. 🙂 Great job again, Carol! Don’t you ever remove this article! 🙂
Thanks Alex! I may have to do a follow up eventually when this gets old enough 🙂
Affordable is always not bad. You should know where to shop. We use a Template based approach to develop a professional website for $500; which other companies charge $5000 for.
I don’t argue that affordable is bad. But there is no $500 website anywhere that equals a $5000 one. That would mean either one person is by far undercharging or another is by far overcharging.
I’ve been designing websites for about 15 years and pricing has always been an issue. Thanks for a great article!
I think that’s an issue that will continue to plague us as long as websites exist! There’s so much variety that it’s almost impossible for the average person to compare costs and value. That makes it up to us to differentiate, which is one of the biggest challenges in a saturated market.
Entry level is $600. Let’s be real. http://www.IREDG.com | http://www.FindSanDiegoQuality.com
Wish i had this article earlier today. Dropped my clients with a very resonable price. They had the nerve to tell me to think about it. Ugh
There will always be people who want you to lower your price. The vast majority in fact. Your answer to think about it” is “I already did, and this is what I concluded.”
Well, it’s been a couple months and I just returned to re-read the article again. I did get my asking price after pointing them to your post and explaining the value of what they were getting. Thankfully that whole ordeal is finished and filed under “Learning Experience”. Thank you for the reply. Your suggested response is very tactful and I will be using that in the future. Excellent article, too! I’ll be linking to it for my website visitors and potential clients. Thank you for sharing your wealth of knowledge!
Well, in the end I’m glad it worked out! Sometimes people just have to be “taught” the idea of value.
And sometimes people just weren’t meant to work with us and if they don’t fit then it’s like square peg in round hole syndrome and nobody goes home happy. I’m not saying cost isn’t negotiable but you’re always better off approaching it from a position of strength – no doubts and no apologies. You know what your time and skill are worth! If someone can’t afford that, that’s ok. They may not be the right customer for you. Or maybe you can offer a scaled down project – less services, less cost.
I think everyone is programmed to ask for a better deal, but it’s your job to say basically “this is what my time and skill are worth, this is the value you’ll get” and be ok with someone who just walks away.
Glad to help!
Carol Lynn,
From one educator to another, this is a great post! I have been doing armchair web design (mostly wordpress themes and build outs) for a while just for fun and for buddies, and 3 years ago I got into creating wordpress based websites for local businesses. I thought about it as selling my time (as a teacher, I do have plenty of spare time) to people who simply didn’t have any to spare to build a website.
As I have gotten better at my skills, my asking price has gone up. I really like your ideas on pricing, as it gives me an idea of where to start with a client.
I am now to the point where my client list and leads are starting to get in the way of teaching. I have several sales meetings coming up in the next week, and I am wondering at what point I begin to take my business full-time? At what point did you run into this decision?
Thanks again for the great article!
Yikes, that’s a tough question. I suppose the first question is, do you want to go from full time teacher/part time web developer to full time business owner? Once you cross over into the dark side, you will have to manage your business from the bookkeeping to the marketing to the client projects. Not to say you can’t hire people to do that, but it’s pretty likely you’ll start out wearing all those hats.
So assuming you’re all ready to jump, you’d have to evaluate how much you’re making doing web development, plus how much you project to make based on your current leads and growth pattern – and decide if its an amount you can live on.
When I quit my day job to go into web/marketing full time, I knew what I was making teaching (not a whole lot!) and I knew what kind of time I was already investing in my business plus what it was returning. There is always a bit of guesswork because I knew what I COULD be making with a full-time investment but that was based on business that I COULD get. In other words, it wasn’t signed contracts but prospective clients.
It’s definitely a risk, and you also have to be willing to give up that regular salary because it’s possible you’ll kick butt in the first 6 months then hit a slow period and make very little.
So I guess the short answer is that I don’t really know when is the “right” time to jump into your own business. But the longer answer is that I would do some math. What are you earning teaching? What if that went away today? How long could you live on what you have/what you’re making doing web work? What do you project that you can make by investing 100% of your time and energies into web work? What does your revenue stream look like in terms of existing clients and prospects? If the math adds up to “I can live with that” then go for it.
At the end of the day it comes down to where your heart is. If it’s in teaching and you don’t want to give it up, then you can always scale back your web business to a point that you can manage so it fills your extra time but doesn’t get in the way of your other job. You may even want to consider partnering up with other web people and sending referrals to them on a commission-basis for closed projects.
If you love the web stuff and are really eager to try your hand at business, then do it. Chart a path for yourself and start putting your efforts into building a client list.
And I have news for you… in the early days when things got slow, I got myself a job at Barnes and Noble and shelved books for seven bucks an hour to make a little extra cash! If it’s something you really want to do then its a matter of planning out how you’ll get there and doing whatever you have to do to make it work.
I hope that helped 🙂
This is a really good article~ i have been struggle with how to price right for quite sometimes. Is even harder when it come to a “friend” client. thx again!
No matter how much practice you have with pricing, it’s still a challenge! But it helps to have a rationale and a pricing structure so you can be confident that you’re pricing accordingly. Working with friends is really tough. Might I suggest you have a minimum price that you’re willing to work for, and then stick with that with your friends. If they don’t want to/can’t pay, then you can simply say that you don’t have the time in your schedule.
Thanks Carol for the post. Great article. Many thanks for this and I will be sure to use this to present to clients who have problems with pricing.
Pricing is something that we’ll always have to work on. I hope this helps!
Hi Carol. Your post makes a lot of sense. I think customers need to know about all the invisible stuff we do to design a look… We design, change design and change again until we find a perfect fit. The customer rarely sees that. Again. We create seo strategies and embed them, create serp content and so on. Maybe we should list all of this effort in the quote and they will understand it’s not just design time they are paying for.
I agree, it’s up to us to let customers know what’s involved and the value of it. They commonly think in terms of “design” which they also consider something simple, so we need to educate them. That’s the only way to do it!
Hi Carol,
Thanks for the post. loved it. I needed some advice from you please.
I am from India and have just started a small business of my own named as Path Kreativs. Path Kreativs focuses on creating Magazines as the mail expertise and the rest like logo websites, business cards.I have focused to have projects from abroad and have got one big Project from UK. I am negotiating to get another project from singapore, I was bit confused in quoting the price for the designing there magazines and business cards and etc.
can you please help me in this please.
I want to know if minimum 10 pages what should I charge them.
Thanks
and looking for your reply.
my email is [email protected]
thanks
Patric Benny
Here is how I generally price projects: I have a spreadsheet where I list all of the tasks I need to do for a project. Everything from design to code, SEO, writing, etc. Then I estimate the amount of time that it will take to do each of those tasks, based on the size and complexity of the project. I usually add a percentage for project management and overhead and come up with a base cost. It’s not perfect but if you build websites for a while you start to get a sense of how much time and effort it will take.
Carol Lynn, I loved the article except for one part, where you were talking about how a web designer can’t create a website in 10 hours. I have been designing websites for 18 years now, and because our company got tired of writing the code for new websites, we designed a system that is a lot like an advanced version of word press (and it’s not a cracker jack version of it either, it took four years to write everything for it!) Right about 10 hours of work is how long it takes us to create most of our websites, given the customer is the one that provides content for the site.
We don’t charge a lot for the set up fees (usually between $250 and $500,) but make our money off of hosting because of the type of sites that we do. We design site mainly for boat dealers (I know odd niche) and charge between $50 and $150 a month for our system depending on what they need. We do it this way, because our websites are database fed, and as we add new features every site gets them, so it is more of an ongoing upgrades fee. This structure makes it a little hard for normal business websites because we use a similar price structure (much less for hosting, but still expensive to most people, especially non programers/designers.)
Do you think it would be a better business plan when designing normal websites to raise our setup fees to say $1500 or $3000 and cut out the hosting, or leave it more as it is. We don’t do a lot of normal websites right this minute, but plan to expand out into that market more soon. We are having a great success with the dealer type websites, and have had many customers stay with us for 10 years+ even at $150, so it has definitely been worth it there, but for most small businesses, there simply isn’t as much money to be made per client.
Hi Zack,
It sounds like you have a completely different model, which is based on a general templated setup and then a subscription fee for use and maintenance. It also sounds like you found your niche! Your model can work well in a niche where you’ve identified the general needs and have come up with a solution that you can then create once and deploy many times. I don’t think there’s a comparison between the development methods we’re both talking about.
What I’ve described here is for a custom website, which includes consulting to a client to determine business needs, sometimes content creation, often a custom design and of course the production, coding and programming. If I sit down and do the classic WordPress “5 minute install” and upload a theme, I can have a site done in a few hours or maby a half a day – but that’s without any customization at all and it assumes the client already has all their branding and content.
So ultimately it comes down to business needs. When it comes to pricing, you really have to evaluate the value you’re providing. For plenty of very small businesses, paying a fixed amount each month, even if it costs more in the long term, is a lot more manageable than a big up front cost. Plus there’s always maintenance to be done, so it gives them peace of mind knowing their website is taken care of.
Good write-up, but those are pretty low estimates. Our sites START from $5,000.00 and we’re from a 3rd-world country.
To add to my comment above:
Although I admittedly skimmed through the article, I didn’t notice any mention of hourly rates, or what an average hourly rate is. There is a danger to excluding this, because giving ballpark estimates can mislead potential clients into believing that a website can be done within those estimates, with the revisions included. Anyone who has experienced spec creep knows that this is death-by-a-thousand-tiny-cuts.
I also found the $40-60k for an application to be extremely low, and definitely misleading. “Apps” or “SaaS” projects often hit hundreds of thousands of dollars, especially in the US, simply because of the amount of small features needed, as well as the testing and development work needed to make it all come together properly.
A more accurate price would be between $80k to $150k for a minimum viable product-level App/SaaS project.
Hi Andrei,
There are a lot of factors that come into play for pricing. My overview is a general guide based on what I’ve generally seen in the space I’m in. Chances are I wouldn’t work at the low end of any of my estimates either, but that doesn’t mean people can’t get that price. A lot also depends not only on the site but on the amount of prep work and consulting that you do. The “building” is usually the least of the challenges.
When I mentioned apps, I was thinking more simply than you suggested, generally in terms of a website that has a back end for ecommerce, an intranet or inventory management. That’s the category where we start tying into UPS for shipping costs and other APIs that are generally used and widely recognized.
When it comes to SaaS projects, that would definitely be in the “plus” range. In fact, I would say those are really outside the scope of pricing because they are often ongoing for the lifetime of the application. You can build and “ignore” a website (whether you should is another question!) But you’re never really done with a SaaS app. I agree that these types of projects are much higher end and higher cost.
I didn’t mention hourly rates because that wasn’t the goal of the post, but rather to give general estimates. Hourly rates can vary just as much – from $50 an hour for general production or less skilled services to $200 an hour for high end programming. That’s a post all by itself!
I would like to say these estimates are low but it’s what I’ve seen that works. Sure, I’ve seen higher as sadly, I’ve seen lower. It comes down to the value provided and what the market will bear. Definitely not a simple topic!
Interesting read. Just wanted to chime in with my average website cost. Typically our “entry level” project built ontop of a configurable and editable CMS system comes at around $7,500. That’s the design and implementation, and no real work put into responsive design, seo, or digital marketing (such as social integration work).
My preferred range, to do things the “right way” typically falls somewhere after $15,000. That buys enough time to properly design and implement a consistent user experience targeted to the most popular platforms (including mobile) and with some social integration.
I have a feeling that your web projects include a lot more strategic planning and business development than most. I was being relatively conservative on those points and focusing primarily on the cost of “building” as opposed to the consulting that can (and should) happen. There’s a lot more that goes into building a site than the actual construction of it and that falls under the umbrella of planning. Some businesses don’t even want to go that far though I’m sure every developer wishes they would!
You’re exactly right, we do have some core initial planning that goes into each project – the larger the project the more detailed these processes are and higher the budget. It’s unfortunate that a lot of smaller businesses don’t want to go this far, but don’t give it a second though when it comes to purchasing physical assets like office space or warehouses. I’m sure they wouldn’t take shortcuts there! I’ve always felt our industry is in one of the weirdest possible states one could be in.
I’ve seen poorly executed sites put up for $20,000 (I know because I lost the bid) which I can only guess was based on “snob factor”. These guys bought an OSCommerce template and skinned it over the course of a couple days. We estimated $9,500 for a unique design to be built.
I’ve seen the opposite too, where we quoted an insurance company around $25,000 and they got a website from a teenager for a few hundred, have gone through a number of redesigns, and have just recently turned back to us for help.
Communicating the value and expertise required to manage a website to a client – not enough articles on that around 🙂
Yes we are in an under-appreciated and under-valued industry full of “commoditized” websites that make professionals look like overpaid scam artists. I often say that people will shell out $200 for a sweater that probably cost about 2 cents to manufacture, but they’ll nickel and dime you over your hourly rate for a service that is actually designed to make them more money. It takes a lot of customer education!
I’ve also been in both those scenarios, more often than not the second, where someone goes “cheap” and then comes back to repent (poorer) later.
I’ve been too hard on myself as far as price. As a developer, I’m always looking for the biggest bang for the hard earned buck. Every website I do is always custom because when I started in 96 that’s all there was. One thing to remember is a fully custom website is a lot harder to hack then say a Word Press site.
There are pros and cons to everything… WordPress has its weaknesses but it can also be great for people who have a lower budget and want to management capabilities. We used to build customs CMSs all the time, but it just doesn’t make financial sense with so many platform available out of the box. We generally reserve custom for “specialized” – to your point, something that requires a high degree of security or specialized features. And of course any admin is only as safe as it’s worst password!
I try and help businesses out by creating them a simple website to get their business off the ground. I am not a professional and I don’t know a whole lot about the industry. So I simply use those drag n drop templates and charge less than $200 for 12 hours of work. I respect the ones that do this type of work day in and day out, but for the few businesses that I created a website for money was an issue. They did not have the resources to have a professional do it, so i use the creativity and desire that I have to assist them the best way I can. So far everyone was very pleased with the work I produced.
When it comes to a business website that is planned, designed and developed to meet business goals and branding requirements, copywritten and search-optimized, tested on various devices and monitored for results… there is a lot more work involved and so a higher cost.
But sometimes a simple DIY solution is an option for people with very low budgets. There are many DIY tools that provide a drag-and-drop interface for someone just getting started to do inexpensively. If that’s a service you can provide and your customers are seeing results, then that’s great.
Hi Carol,
Great read! I have a question you didn’t touch on and no one asked. I’m beginning to think there was a reason why I didn’t see the question asked. lol The reason is probably because no web developer in training or experienced will consider it. Here it goes. Is it completely unheard of to look for a web designer who will work to improve their portfolio or an experienced web developer who would assist for a percentage of the profits or future earnings. I understand web design is time consuming and the designer should be compensated for their work. My father is software engineer and computer programmer so trust me I understand. I work a full time job and have a great idea for a website but have limited funds to pay for the work. Any advice would be greatly appreciated.
Trey
Hi Trey,
You bring up a great point that’s worth considering. So first of all, I don’t think that working for free to build a portfolio is a good idea. I know other people have different opinions on that, but in my opinion, that can devalue your work and set you up for a lot of pricing woes. If you really want to build a portfolio, I would suggest simply building it – do some comps for demo purposes, and just practice during your down time. And build it through paid work. You may not be able to charge top dollar yet but your time is worth something, so price accordingly (another question for another day!)
As for working for a percentage of profits, that can work if both parties are willing to participate. However, this is not good enough to do on a handshake. If you really think this is a viable option, you need to have a written, legal contract in place that defines the parameters of your agreement. What you’ll do, what you expect to get in return, how long the deal is valid for (Do you get a cut of profits for a year or forever? Are you responsible for an initial design/build or maintenance forever? etc) So to that end, you should both have an attorney and be able to sign a binding contract that you both agree on. That can cost time and money so it would have to be a substantial project worth both of your time. I think that could work, if you look at it as an investment, but again, I would certainly go down the legal road with that and be clear about what the expectations are.
I think someone earlier in this thread proposed doing a payment plan i.e. take some kind of deposit and then sprwad the payments over some window of time. What you are proposing is a bit like an investor and is quite interesting. I think one of the most important processes is qualifying the client, I got lost in the weeds for the first year not doing thatvery well i.e. taking on clients who did not really believe in the value of a good online presence. my 2p for this first day of september.
Yes, I think spreading out payments can help. You’re probably going to be working over time anyway so if it’s easier for your client, and guarantees income to you, then it’s a good option. As for the investor angle, you’re right – you must vet people, have a legal contract and be sure the project is worth it for all parties!
Carol, thank you so much for the very resourceful article. Most of the pricing is very much in line with what I have been doing, but there were some points that will help me better educate my prospects.
My question for you pertains to estimating custom functionality requirements for specific front-end and back-end user and administrator goals. I find it rather difficult when a prospect approaches me and wants a quote on an entire website with custom functionality when there hasn’t been any meetings to discuss the requirements and consult with them on their options. In my experience, this process takes hours and it’s not a service that I prefer to do for free. Do you typically give them a very broad range and then let them know that you wont know final costs until you start the project and define the specifications?
I completely sympathize with a prospect shopping around for price when starting a new project. Anyone has to have a budget and its usually a good place to start when deciding who to hire. Yes, I think a great client will factor in value but price will always be part of the equation no matter what.
How can you provide comfort to a prospect with these custom needs during the “selling” stage so you can close the deal?
Thanks in advance!
That’s a great question that deserves its own blog post. It’s a complex answer and unfortunately you run into the same thing we all do – people don’t perceive time as value in many cases. You can call up a contractor, landscaper, pool installer, or any number of professionals and get a free quote. So when it comes to websites, people follow the same mental perception. We should just pop a quote out and send it.
The problem is that when it comes to web, there are so many variables, so many things to consider and so many options that it’s impossible to give someone a quote without asking about a billion questions.
And to your point, doing that requires time, research, possibly some spec building. Should we invest that time for free, so somebody can shop around?
I gave ranges here for best estimates based on some standard things in terms of a website. But when it comes to custom sites, especially sites that are more intensive (and can fall into that “plus” range) we take a completely different approach.
Normally we will give a prospect an hour or two of our time to ask questions and get an idea of what they’re trying to accomplish and what the business goals are. We do that for free as part of prospecting. We don’t, however, provide any specs to them. It’s just something we put together for internal use.
We have a spreadsheet where we plug in line items as best we can, against hours to complete a task and an hourly rate. I know that not everyone likes to base things on an hourly rate but it gives us a baseline otherwise we’d just be making things up. We figure in a percentage for management and cost of doing business so we end up with a general range. So we may tell someone, we estimate $5-10,000. Yes, that’s a pretty big range but it’s a pretty big empty space we’re trying to fill without knowing enough!
That will at least give them an idea of what they’re looking at, so if they have a $1,000 budget, they know this is out of their range.
For bigger projects we take an iterative approach where we give the client a baseline budget, say $20,000 – and stipulate that the cost will increase depending on the number of features, the amount of change requests, etc. Then we develop and release the project in pieces so the client can review, test, make changes, etc. If they want ten new things and we’re already at 20k, they may decide to wait until another time.
It can be a minefield but you really do need to start with value and work from there to price. Anyone who is price shopping is probably not going to pay your price anyway. They’re going to find someone else, tell them you want 20k and the other company is going to do it for 19.
I hope that helped!
Carol,
Thank you so much for your feedback! I like the idea of starting with a base price formulated from the information provided during a possible 2 hour free “preliminary strategy” session. It just takes some good explanation to the client that the costs can change depending on the level of customization required after the initial “blueprint” phase of the project. I think in order to put them at ease with the potential increase in costs, its important for them to understand that during the “blueprint” phase we’ll balance immediate needs and overall goals with budget to consult them on the best possible choice.
Thanks again!
Wow! This is an amazing article! Very in depth and well written. You should do this for a living ;)! OK, seriously, my wife found this and sent it to me because she’s that wonderful! As brilliant as she is, she doesn’t do what we do, so she can only offer so much advice, which is why she sent me your article. Here is where I always get taken or ‘in over my head’. This is when I try to assess the situation and work up an over all estimate. Is there a detailed questionnaire sheet you use to get all the smallest details when preliminarily meeting with someone in order to accurately quote them a price when you finally do get to run all the numbers?
Thanks in advance!
Scott
I wish I was that organized… no, we have been doing this long enough I guess that the questions are sort of second nature but wouldn’t it be nice to have a list like that! I’ll tell you though that I’ve found some traction with putting together my own packages instead of leaving it open ended. Basically, I tell people “here are the six things you get” and add a price tag to it. Then we can skip the entire quote process. Most people don’t need much more than that, especially in the small biz space. It takes the pressure off them thinking about it and you trying to quote it. And if they do need extra services you can have some additional line items, whether you want to bill hourly, or something like “$100 per extra feature X”.
Thank you so much for this!!
Wow! This is an amazing article! Very in depth and well written. You should do this for a living ;)! OK, seriously,
so sweet graphicsdesigner
Basically, I tell people “here are the six things you get” and add a
price tag to it. Then we can skip the entire quote process. Most people
don’t need much more than that, especially in the small biz space. It
takes the pressure off them thinking about it and you trying to quote
it.
I agree. I find that to be true for many small businesses. Most times it’s easier to bundle up a bunch of the essential stuff into a doable package and skip micro managing customizations.
So I figured that after the first year, the $60/hr that I average is
reasonable for my area and for the skills that I bring to the table.
This is only one pricing strategy and it works for me. Fat Diminisher System Review