At the moment we’re doing 8 web sites sites. Only one is below $5,000 (it’s $4,400).
I was looking at competitor sites last night and man, are they cheap! A lot of them do a 10 page web design for $900. And the sites can look okay.
I look at that pricing and just shake my head. There is no way possible we could do a web site for that. It takes us 10 hours+ just to analyse a prospect’s wants and needs and to figure out the best way to market the site and then put forward a detailed proposal.
That’s $1,000 right there before we even start!
What Often Happens
And when you’re competing on price, you’re basically screwed. There’s always someone who will do it cheaper. So your price goes down, down, down.
I can’t tell you the number of times clients have had us redevelop web sites after their previous web developer went out of business.
You Need To Make A Profit
Because web development is mainly a young industry, there are many web designers working from home, just starting out in business, with almost no overheads. And that’s fine.
Except they price themselves too cheap. Then they can’t make decent money. Then they can’t stay in business.
“I’ve Spent 3 Weeks On This!”
One of our old clients has just developed a new web site. She wanted to do it herself and has done so with a DIY site builder bit of software.
It’s only a small site, but it has taken her 3 weeks to complete. You see, even a small site is a lot of work.
It’s not how cheap you can get the web site. It’s how effective the web site is that counts.
It’s not just about how it looks. it’s about how long it takes to load, how well it gets ranked in search engines, how effective the copy is at getting people to stay on the site, how many people buy, etc, etc.
It’s never about price. It’s always about value.
Cheers
On the other end, you have the one that charge 20-30k for a web site and never deliver the promises. We were contact by such people and they ask us to redo their web site. When we tell them that they will have to pay us 10k for a new e-commerce site with bell and whistle extra that we have to program, that stop them right there. Confidence is already shaken for them.
To win them, we offer different kind of contracts and risk sharing. Stocks, % of sale and monthly payments are suggestion that we offer our customer. We can offer a low introduction price, but if the site is a success, then we cash in.
Have a good day.
You hit the nail on the head regarding price versus value, Brendon. I’ve seen even less than $900 quotes for 10 page sites. I think many designers are contusing the tasks of graphic design and coding with the prime purpose of building a client’s business.
I really like Hugues’ idea … charge initially a barebones, just recover costs price but tie it to a participation in the site’s success.
One problem with that though, is not only does the client then have to open his books to you … he has to be keeping books to begin with 😉
I sell a hardware system that can save a business a lot of money on vehicle operation costs. Initially I thought I could make some good deals by offering to sell at cost and then take a percentage of savings. Had to abandon that idea because the vast majority of my potential clients can’t really define what they are spending, so it’s impossible to construct a mutually agreeable monthly or annual savings amount.
I do see many beginner web designers charging after business for nearly any amount they can get, yet when looking at their own sites/portfolios, they haven’t spent any time there … under pricing will kill you faster than any other business mistake.
Brendon is right !!!!!! (Again)
It’s not about the price its about the value you bring the business.
If you look into Brendon’s web design handbook you will see that his client analysis form begins to look at what turn over and value the client believes that site will deliver.
It’s a perfect formula
TAKING SHARES OR PROFIT SHARE IS THE FASTEST WAY OF GOING BROKE
Who wants to rely on some other company’s poor business decisions, poor financial tracking, and questionable integrity?
If you want a share in peoples profit go join an affiliate program build a site make it successful and go and find the source and cut out the middle man taking “ALL THE PROFITS”
If you want to build websites for other people charge for your time up front.
You just have to ask, why are they in Business?
If anyone says anything other than “To make lots of money” walk out because you’re about to work with a problem client who doesn’t understand about investing to make money.
A “Good Website” is an investment; it’s a “BUSINESS ASSET” that “MAKES MONEY” that you can quote a RETURN ON INVESTMENT. Sites should make a “RETURN ON INVESTMENT” within 6 months of launch.
Get the client to check with the “Other Designer” if he can guarantee a return on investment, and offer a “satisfaction guarantee”
Stand tall with confidence when you ask the client these questions
Three days later the will call ……..with the words ….
“I’ve been thinking about what you said, and you are right, I can now see that you know what you are talking about and we will go with you because we can see the value in a site that WILL give us a return on investment”
The difference between and Expert and and Nubee is an Expert knows when a site will return value to the client and knows how to achieve this return with a site.
Billy Kirkley
Hey, not sure I like being called “old”. Young and ravishing are far better (though not as accurate). And yes, I have spent more than 3 weeks in development, but I wanted to learn the ropes – and I’ve got the time otherwise wouldn’t recommend it to anyone! As I commented to Anthony the other day, will probably end up coming to you for an overhaul anyway, but that’s money well spent. In the meantime I get to play – not all web sites have to sell from day one. But if you want one that does then I wouldn’t use any one else but you (and you can put a lid on that ego ’cause I can see it swelling from here!!! :))
Pricing is going to depend on a few things.
1) Who is your target market? If you’re selling to established businesses, you might want to demand a higher price. If you’re selling to startups, you’re likely going to need to lower your price.
2) How can you maximize income? If you’re charging $30,000 per website, and sell 1 per year, you’ll make $30k. If you charged $20,000, you might sell 2 per year and make $40k per year. Charge $10,000, you might sell 9 sites and make $90k per year. Charge $3,000 and sell 25 sites, you’ll make $75k per year. You can see that $10,000 might be your ideal price if you want to maximize income.
3) How much work are you doing? If you’re charging $10,000 per site and spending 900 on it, you’ll only be making a little over $11/hr. If that’s the case then you probably won’t be able to do the 9 sites per year that you need to make $10,000 your most profitable price, and you’ll need to raise it.
Hope that helps,
Tom
Thanks for the input
Jo, I didn’t mean “old” as in you’re old! I meant old as in been a client for a long time! (Phew!)
We both know you’re young and gorgeous.
And I reckon it’s a great lesson to do your own site – because you’ll be managing it, etc you get to see how much work it really is and learn so much along the way.
Thenaks for the comments Hugues and Dave – but I’m will Billy. Taking a % of the client’s profits is a bad, bad strategy.
I did it once with a client for whom we made a fortune. It was big money and the first thing the client did was say “I’m not paying you the agreed %, accept $x or we’ll just fight you in court and tie it up in legal action for the next 2 years.”
I think if you’re happy to take a % you’d be better off developing the site for yourself.
And thanks Tom. Yep, there is defintely a niche there for $500 sites – but no real profit.
Cheers
Brendon
Brendon – breakdown your pricing when quoting and do you display your hours next to items (if necessary)