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  1. #1
    Founder of Primal Skill Ltd. feketegy's Avatar
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    Question Project prices at outsourcing companies ?

    Hello,

    I just read that we're allowed to talk about prices here on the forum. So I'd like to ask the community:

    1. Where are you located and what are your prices for websites and web applications?
    2. Are you a freelancer or you're representing a firm?
    3. What variables you take in consideration when you're calculating your price?

    I live in Romania (some say it's the land of quality outsourcing, i don't know) my prices for websites varies from as low as 450 for presentation sites up to 4000 - 5000 for complex websites and web applications.

    I take in consideration the following variables when I'm calculating my prices:
    1. How urgent is the project for the client. How quickly wants to get it done.
    2. The complexity of the website / web application

    Some of my clients are asking for fixed budget prices, in this case I usually calculate how much hours will it take and I add to this around 15 - 20 % which is the profit. My hourly rate is around 14 - 16 .

    What are your prices?

  2. #2
    Twitter - @CarlBeckel busy's Avatar
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    I'm in the United States in Richmond, VA (a smallish/mid-sized city). My sites generally have been between the 2K-6K range, although I've started quoting a little higher lately.

    I own my own business, and I have an office and contract a fair portion of work out so I don't consider myself a freelancer, even though I'm technically the only one who works here.

    I always do fixed price projects, I only do hourly fees for little stuff. To decide my prices I have a price sheet, here's some of it:

    Planning/consultation $300
    Graphic design - 1 unique layout $350
    Coding 1 unique layout - $300
    1 month of special care/minor changes - $100

    I always include that last one. People don't even see the fee, they're always just happy to know I'll be around if the site acts screwy after launch or they want to change the text a little.

    As for those prices, I'm totally raising them soon.

  3. #3
    Founder of Primal Skill Ltd. feketegy's Avatar
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    Yeah, that's the difference between Eastern European countries and western countries.

    Our rate is much much lower, but the living expenses are also low.

    I'm interested in web development taxes in US, UK, etc. And also what form of firm do you have? Incorporated, LLC ?

  4. #4
    phpLD Fanatic bronze trophy dvduval's Avatar
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    We still mostly bill by the hour, so the price is based on the amount of hours worked.

  5. #5
    Twitter - @CarlBeckel busy's Avatar
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    I have Sole Proprietorship.

  6. #6
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    I developed a web services company over a 6 year period and we never did fixed-bid work after the first couple of years. Hourly rate can be very profitable if handled right. Our billable rates ranged from $39/hr for bulk purchase offshore services (i.e. man-months) to $115/hr to ac hoc consulting, with a typical blended rate of around $78/hr for an average annual revenue per client of around $2200.

  7. #7
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    Hi Sagewing,

    You are correct that hourly pricing can be very profitable but I have always found it very difficult to quote an hourly pricing as the customers feel that it's very risky.

    Any tips on that?
    Mukul Gupta
    Indus Net Technologies
    _______________________________________
    Design | Development | Internet Marketing

  8. #8
    Founder of Primal Skill Ltd. feketegy's Avatar
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    I do too consider that clients prefer fixed rates instead of hourly rates. This is simply, because:

    1. You're trying to sell something they can't see, touch, etc. yet.
    2. They don't trust you and they can't control, check if indeed you worked on those specified hours. (although there are tools on the Net)

    Every good, lasting partnership first step is to form a good business relation and trust. You have to prove that you worth their money.

    Also, I'd like to mention that I had clients who preferred hourly rating instead of a fixed price, but the majority prefers the latter.

  9. #9
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    This is an old and tired debate. Smaller clients who don't have much money will generally want fixed-bid. Larger clients will want good estimations but are more comfortable with hourly rate projects.

    And, there are multitudes of exceptions in between.

    One thing that I see over and over again: the companies and people that are earning the most (i.e. getting rich) are USUALLY (but not always) billing by the hour, using the attorney/cpa model of running a services business.

    Even in big government projects where the Fed requires a set project price are estimated and managed using hourly rates, and a blended hourly rate is used keep the project cost in line with the estimation - since the fixed bids are for set amounts of hours and there are agreed costs for overages, it's really not a true fixed-bid.

    So, if you want to really understand the pricing/hourly/fixed-bid debate, you need to look at the industry as a whole, not just what one developer says. After all, when most of us started out we did tiny fixed-bid jobs. Some of us have gone on to massive clients who prefer hourly rate - you have to consider all of that.


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