Website Design: Valued Service or Just Another Commodity?

John Tabita

My grandfather owned an auto repair shop in Cleveland, Ohio in the mid-20’s, during Prohibition. I’m told some of his best customers were bootleggers who needed their cars double-springed so they wouldn’t sink beneath the weight of the cases of illegal alcohol they were hauling, thereby arousing the suspicions of local enforcement.

Dad learned the automotive business from his father, and in particular, how to rebuild engines. During the mid-50’s, he worked in downtown Los Angeles at one of the largest production engine remanufacturing companies of the time. Yet, he always dreamed of being in business for himself. He and his brother made that dream a reality in 1965 when they started their own engine rebuilding business.

To do so, several hurdles had to be overcome. They needed a building. And equipment—expensive equipment, like crankshaft grinders, a boring bar, a value resurfacing machine, and large degreasing tanks to clean the engine blocks. They also had to stock the shelves with an inventory of parts. Then there was worker’s compensation insurance, sending their wives to work to help support the families until the business got off the ground, not to mention, a second mortgage on the house to finance the whole thing.

Compare that to opening a web business today, where you need a computer, some software, and 250 business cards from Vista Print for $3.99.

Low Barrier to Entry

Sixteen years ago, when I was first learning Photoshop, I became very excited over how quickly I was catching on. I remember gleefully thinking, “This is easy; anyone could do this.” Then came the thought: “Oh no. Anyone can do this …”

The same can be said for HTML, CSS, PHP, or any other technical skill in the web designer’s toolkit.

Today, what we do for a living is even taught in high school.

The bane of web development is that the barrier to entry has always been low. A Google search for ‘los angeles web designer’ yielded 6,820,000 results. Considering the population of Los Angeles is about four million, that means everyone in L.A. and his dog designs websites.

To quote Thomas Friedman from The World is Flat:

When everything is the same and supply is plentiful … clients have too many choices and no basis on which to make the right choice. And when that happens, you’re a commodity. You are vanilla.

In an article on Freelance Switch, freelance web designer Rita Lewis says that when this happens, the relationship between you and the client becomes reversed: the client dictates the cost and you wind up doing the work for that price.

There seems to be a basic disconnect between what is needed to earn a living as a freelancer and what clients seem to want (at least on these outsourcing sites) to pay. The disconnect goes even deeper. Suddenly a client can define all aspects of a job from price to design, causing the designer’s role to change from that of a professional to that of a technician.

Large companies can manage to differentiate themselves through advertising. Think of domain names and chances are Go Daddy comes to mind. When I think of hosting, I think of Rackspace—not because I use them, but because I see their ads all over the Internet.

Product innovation is another way. Gillette managed to out-sell the competition by adding a third blade to its razor and giving it a stylish name—the Mach 3.

But both of these are beyond the means of the average freelancer or small web firm. To make things worse, the very reason you went into business in the first place is compounding the problem. It’s your left-brained, technical skills that are making you a commodity.

And even though design is a right brain, creative process, this has also been commoditized by the proliferation of design templates, do-it-yourself site builder applications, and even WordPress themes.

According to Wikipedia, commoditization is the process by which goods and services that once had economic value and distinction end up becoming simple commodities in the eyes of the market or consumers.

It’s difficult to make the case that web design and development can be placed in the same category as traditional commodities like lumber or sand. Yet, web design can be a service sold as a commodity. Sure, you can claim that there’s a distinction between the service provided by different vendors. But that distinction is only important if the market thinks it’s important. Any differentiation the consumer doesn’t care about ceases to be one.

You see, it doesn’t matter if you and I refuse to believe our services are a commodity, or that we can make a sound argument as to why it’s not. If the market perceives there to be plenty of choices and little or no difference between them, then you and I are not Chunky Monkey or Cherry Garcia. We’re vanilla.

Next week: How to break out of the commoditization trap.

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  • http://www.yoga-singapore.com Kian Ann

    Thanks John.

    This argument is very true. Nowadays, there are tonnes of WordPress themes (and with just $97, you can get membership access and download the whole bunch!), as well as drag and drop site builders like Weebly – that many people would just rather just go for one of these ready-made solutions rather than get a designer to create a site from scratch. Its becoming critically important for freelance web designers to really provide value through other means, apart from just a website.

    Looking forward to your next article!

  • Doug

    Website Design: Valued Service or Just Another Commodity? It depends on the market that you are targeting.

    Some businesses view web design as a commodity. For some of them it is. Nothing really justifies a small insurance agency, with an established base of clients, spending 10 or 20 grand on a site. They just don’t need it. A cheap template site serves just fine as their online business card. They don’t need to be “social”, go crazy with SEO, or any other such nonsense.

    The trick for a good freelancer, I believe, is to take on clients where we can provide exceptional value for what we charge. Clients where their investment in the site leads to substantial increases in leads, sales, etc. There is nothing more satisfying than a client calling after a few weeks that a new site is up and commenting about the notable increase in business coming from the web.

  • http://www.leachcreative.com Andrew

    You are absolutely right, there are plenty of “developers” who fancy themselves as designers, and too many regular joes who think they can design just because they have a copy of Photoshop or Illustrator. If people want real quality work, they need to go to a real designer, otherwise they are just wasting their money. This isn’t to say they should go spend 100k on a a design/logo, there are plenty of smaller shops who offer great work, for a fraction of the cost.

    Anyways thanks for your article, it was definitely worth reading.

  • Patrick

    This is of course a problem, but one you’d face in many industries. There’s overcrowding in the legal profession too, despite the relatively high barrier to entry. It’s a problem you’d face if you were opening a restaurant, trying to become an author or musician, or starting almost any kind of retail store. This is why marketing exists.

    I also think this is a problem that varies based on location. In a huge city like LA the competition will be fierce (although obviously not actually 6.8m), but in smaller towns there are probably only a handful of decent companies that offer web design/development. As more and more businesses start worrying about their online presence, there’s a clear opportunity for a web developer to attract new clients because the number of people looking for these services is increasing.

    I also don’t think it’s all that hard to stand out from the crowd, at least on a local level. You don’t need expensive ads all over the Internet, you need recommendations from people in your community. There might be a hundred web developers in your town, but people follow the recommendations of their peers, so once you’ve made a bit of a name for yourself and had a few satisfied customers you should find the clients start rolling in.

    There is a low barrier to entry, true. But there’s a high barrier to doing things well. If you have passion, genuine confidence in your skills, actually know what you’re doing, and can therefore make a high-quality website in half the time it’d take some high school kid who has to consult Google every 5 minutes, clients will pick up on it. And if you have some business skills and the ability to market yourself effectively (arguably rarer skills) to back up your technical skills, you shouldn’t struggle too much to get ahead of the game.

  • Alex.Barylski

    Interesting Article. I couldn’t agree more. I started feeling this way when first experienced freelancer and similar sites.

  • Anonymous

    John,
    I think in the eyes of the buyer everything’s commodity.
    About six years ago, I was told by a potential customer, that “nowadays everyone can put up an e-commerce site. It only takes a 14 years old with a scanner “.
    Right know, my country has still the lowest e-commerce figures among all the western countries.
    I’m asking myself if my country lacks scanners, teenagers or both.

  • Alex Rodriguez

    “A Google search for ‘los angeles web designer’ yielded 6,820,000 results.” — The fun part about looking for a web designer among the masses is finding a *real* web designer. I’ve met plenty of ‘web designers’ who still use ImageReady, use a free website builder (Wix), or they haven’t updated their skill level since 1995 (“CSS? Is that an STD?”).

  • http://www.pricklypearmedia.com/ Angelo

    WOW… powerful reading!

    Web design is a commodity for businesses who can’t afford custom designs.

    Most if not all businesses need a website, but I am not convinced most would like to pay several thousands for one. With this in mind we have to price things accordingly and as such, small businesses would ‘just’ be interested in having a website, rather than having a cracking custom design which will cost them an (in their eyes) an arm and a leg.

    Yes it’s true, our skills can probably be learned in school. If business was just about HTML, CSS and JavaScript I would be making money in college. Even back then CSS was not big – imagine that!

    However, this is just technical knowledge, you need to know how to run a business, how to deal with clients and prospects, how to evolve you skills and more important how to price things. All that other stuff could be a degree in it’s self! Education only provides the foundation to what you need before you start progressing your career.

    Having said this, it’s important not to devalue what we do, but to understand that we should evolve. New blood is always better, but on the end of the day, we need to know so many other little things that knowing how to create your website with the latest buzzword (e.g. responsive), would not really sell it’s self, particularly as clients know very little about these buzzwords.

  • Cabbagehead

    Agreed its a real problem! Been trying to figure it out. The only apparent solution (that I can see) is to align yourself with high-end organizations who expect high quality and are not scare of paying higher rates to get it. Of course from what I’ve observed, tapping this requires (a) you live in a major software center such as the Bay area, NYC, Seattle, etc … and (b) you’re prepared to work on-site as a contractor, not as an offsite freelancer. It seems the cost of the higher wage … is your freedom. :) Seriously though, it seems they reason these companies will pay higher rates instead of just offshoring, is because they want a tight knit on site team.

    Regarding lawyers – the national avg rate is still $275 per hour. What is the average web design/developer freelance rate these days? If Freelancer.com is any indication, its more like $27 per hour. ;-) On site, you can probably get more like $60-70 but you’re just an employee-for-rent at that point. Why not just get a normal job?

  • http://brianswebdesign.com Brian Temecula

    Sure anyone can have a computer, some software, and 250 business cards, but that doesn’t mean they can do diddly squat. In a recent conversation with a company that I do a lot of work for, they said they searched for and interviewed many developers who reviewed the work to be done and said they couldn’t do it. So, it’s one thing to call yourself a developer (or a designer), but if you’re not capable of doing complex work, then you’re not likely to succeed. I’ve been working on websites in one form or another for about 9 years. In the beginning I was using FrontPage … LOL.

    • Lars

      Totally agree here. Yes, anybody can do it…but not too many people can do it well.

      Just because you know Photoshop doesn’t make you a designer and just because you can use DreamWeaver to put together template based pages doesn’t make you a developer.

      Like auto repair or any craft or skill, its experience and education that produce professional results.

  • Cabbagehead

    An issue I’m still trying to reconcile, is how there can be professional services companies charging $175 per hour, and simultaneously offshore developers now readily available for $17.50 per hour. The other day I looked up “{xyz} developers in Los Angeles” and the entire paid portion of Google’s search results were ads from oDesk and Freelancer offering “{xyz} experts from $8.50 per hour”. If a prospective client starts their search here, the professional services company is at a severe disadvantage, I would think! I mean, a pro services agency can easily justify 2-4x rates because of being full time, experienced, insurance, etc. But how do they justify 10x?

    And yet the irony that I see is the professional services companies are doing well! It also seems like the offshore talent is doing well. It seems to me it is the mid-rate freelancer or one-guy shops that are struggling! How could that be? Wouldn’t the typical reasonable person gravitate to the middle of the road rates, when confronted with such extreme differences? Instead I see the market bifurcating into two – those who want Walmart prices, and those who want Tiffanys or Bloomingdales prices.

    Why is that?!?!

    • Lars

      I would say probably because the middle of the road guys don’t market themselves properly. There’s enough business for everyone, but it’s the one-man operations or mid-rate freelancer that usually is also not willing to invest in marketing and promotion of their business. On top of that, a lot of people would rather put their trust and money into a company rather than a single individual. The off-shore and outsourced community does well when companies simply want to make sure the bottom line is as low as possible.

      We run a mid-rate firm that is composed of two people (and a few contractors). The fact that we’re branded with a cohesive identity gives potential clients the comfort of dealing with a larger marketing firm but without the high end cost…and we do amazing work, to boot! :)

      If the mid-rate freelancers want to do better, they need to step up their marketing and appearance if they expect to compete.

  • http://www.freedomstudios.co.za Graham

    You have raised some very interesting and eye-opening point John. I think that most of us go about our daily business partially unaware of what is actually happening in the market and how things are shifting. I also tend to agree with Cabbagehead, it seems like the guys charging mid-range prices are the ones suffering the most. I think this is going to be the case for a while especially when it comes to entry level websites and simple site builders and cheap do-it-yourself options.

    I do however think there will always be a need for really incredible talent. If you are a professional, be it a designer or developer I don’t think you will be living below the breadline. It seems like a lot of tech start-ups and companies looking to launch new amazing web based products are starting to see the real value of quality design and brilliant development. So hopefully we see another shift that sees the rest of us getting a nice piece of the pie ;)

  • http://www.pinnaclewebdesign.us Doug Patterson

    The perception out there might be that we are a commodity, but it isn’t too hard to squash that misconception. The 80/20 Rule applies to web design, too. Probably 80% of the site out there are junk – either terrible design or bulky, terrible markup. I’ve found a lot of sites made with iWeb lately; every one is trash. Once potential clients understand that these DITY site tools generate worthless sites that often do them more harm than good, they come around and understand the value of experience and are willing to pay a reasonable price for what they get.

  • dave

    All too true.

    I’ve recently lost a client who paid somebody one third of my price but they ended up with a generic WordPress site that was a little buggy if I’m honest.
    If they’d have paid me they would have had a bespoke design and quality build, including hosting and full support.
    Trouble was they were hooked in by the lower price. I wasn’t prepared to compromise or lower my price. They got what they paid for but i think 7 times out of 10 clients will regret cutting corners. I fully expect this one to return to me.

    At the moment I manage to survive because years of experience and knowledge helps me tell the client what to do as well as how to do it.
    I think as time goes by though it’ll become increasingly hard to stand out from the crowd.

  • Antonius Murdhani

    Good article! and I have to agree with Doug up there, he made a good point that it’s about the exceptional value. Anyway, those template sites are one step behind in terms of innovation, most of the time the outcome isn’t as fantastic as hiring a good freelancer. So as long as we can provide innovation and added value in our customers’ websites, we’re gold. It’s about quality not quantity.

    I’m from Indonesia, down here most of the customers don’t know the benefit of a good website, they go for cheap with minimum result rather than paying more for a website that actually works. Freelancers are facing the inevitable price war, as number of web-designers offering templates grow like mushroom during rainy seasons. In order for them to survive is to lower the price, thus the quality is affected.

    Valued service or just another commodity? Well I think the answer depends on the freelancers/web firms and also the customers, which would they go for… quality or quantity.

    Cheers,