Many small- to medium-sized web development companies, those interested in joining the industry, and ISP customers often wonder what is the "going rate" for a web site. This can differ greatly based on your geographic location, level of experience, and the breadth of services desired. For example, a brand-new small company in New York City might charge the same for a web site as would a large full-service ad agency in Australia...just because they can.
As pricing methods vary, you will want to select the way or ways that you bill your clients. The three main pricing methods are: hourly, flat rate, and "Chinese Menu." Hourly pricing is similar to that of most ad agencies or freelancers. The project is estimated based on the amount of time and labour it will take, and you charge X currency units per hour. In flat rate pricing, you proclaim that the project costs X currency units. You may break down in your estimate each service or task and its cost, and each would be a flat rate. In "Chinese Menu" pricing, each element a web site can contain is given a price; the cost of the web site is the sum total of all elements needed. For example, if each graphic costs $5, a link costs $3, and 250 words of text costs $25, a one page web site with one logo and one e-mail link may cost the client $33.
The June/July 1997 issue of YourCompany Magazine spells out what a professional web site could cost (page 41 if you read print magazines!). Their outline is as follows (all prices US$):
- a 10-page web site plus e-mail for ordering/feedback: $2,500
- a web site containing an online catalogue (with ordering) that includes photos, graphics, audio, or multimedia: $5,000-$50,000
- an interactive web site that searches databases, does spreadsheets, has database integration, or online purchasing with customisation: $75,000-$250,000
- monthly maintenance fees can run from $100 to $5,000 depending on what you need
This seems a bit high to me, though companies certainly are charging these rates! One of the main errors with this picture is that no company would spend $50,000 on a web site that had a catalogue and not use a database. Of course, that outline was published almost a year ago. Once upon a time, the web was a new and fertile land where even the above-average user wouldn't have known what kind of talent, knowledge, and time it takes to build a good web site. Many companies around the world took advantage of general ignorance, and charged as much as they could. Companies thinking "you get what you pay for" paid top dollar for their sites. These economics ruined it for the rest of us; the number one response I hear to the "what is your budget" question is "as little as possible." As years go by, the web continues to grow exponentially, and the number of companies and individuals selling any kind of web services is almost uncountable. People are becoming more educated about what web sites should and can cost. They are also learning that it doesn't take a Computer Associates or AT&T to create a top-notch heavy-duty site including database manipulation, multimedia, and commerce. I believe web pricing for mid-1998 in the US is more like the following:
