Recent articles suggest
that fortunes are being made providing web service. We read about
web programmers charging $125-$250 an hour. And we read about
$250,000 and $500,000 sites. Even small businesses are told that
they should expect to pay $20,000 to $25,000 for an Internet web site. New
entrepreneurs who see these dollar amounts conclude that they can
easily make thousands of dollars designing web sites. But are these
earnings typical?
About 12 months ago, my
company initiated research to identify the typical and average
prices for Internet service. Our goal was to determine what the
majority of web service professionals are charging for their work.
Through on-line and
print media searches, comprehensive surveys and personal interviews,
we collected over 5,000 pricing points related to web site design
and implementation. The data from our research provides a good
picture of Internet service today.
Our first look compared
prices in the United States. (We also collected international
prices, and these will be tabulated and released later this year.)
All of the prices varied by region across the U.S. with higher
prices found on the East and West Coasts. We published the results
of our research in our Regional Pricing Tables reference book. Here
is an overview of our findings.
Many advertising
agencies and high end marketing companies are indeed generating high
revenues supporting Fortune 500 companies. While incomes for the
majority of web service providers are lower, earnings are still
quite respectable. Overall, revenue generated by web service
professionals is higher than that currently earned by desktop
publishers and most graphic designers. This is why many graphic
designers and DTPers now offer web site design and layout as part of
their service package.
We found a wide range in
billing rates with the lowest prices charged by new entrepreneurs
entering the profession with minimal business experience or
training.
We found web design
going for $25 -$350 an hour, with single page design going for as
low as $10 and as high as $500 dollars for full flash enabled pages. The U.S. average for
designing a single page site is $133.39 with a standard five-page site priced
between $500 and $15,000 ($5,000 is typical). Twenty-page sites are going
for $10,000 to $40,000 ($12,000 to $18,000 was typical).
Additional pages are
being billed at $100 to $1,000 each ($248.06 average and $250 was typical).
Banner ads are being designed for $300-$1,000 (typically $500 each). As
described in our Pricing Tables, animation is typically priced at
$125 an hour, and hyperlinks are being created for over $55 an hour.
A basic form with an
average of 15 fields is going for $1,500 with form design effort being
billed at an average of $110.50 an hour. Add interactivity to a form and the
average hourly rate jumps to $225.51 an hour. Image design is
typically going for $100 an hour. Programming is being billed at a
respectable $250 an hour for HTML authoring, $285 an hour for CGI
programming, $350 an hour for Java work, $100 an hour for database
programming, and $250 an hour for VRML programming. Overall,
programming rates varied within a range of $100-$300 an hour.
Nationally, audio
recording and editing averages $194.71 an hour. The average for
digital video came out $172.50 an hour.
Design and
implementation of secure transactions for electronic commerce
averaged $284.52 an hour. Even site maintenance is going for $50 to
$150 an
hour with site registration and promotion going for $85 an hour.
There is indeed a lot of
money to be made in web service, and smart entrepreneurs are earning
it. Yet we found a whole segment of the industry who consistently
under-prices the actual value of their work. This was particularly
prevalent with young owner-operators who are charging rates so low
they seem to be doing web design as a hobby. Their low rates are
doing themselves and their industry a disservice by forcing average
prices lower than they should be.
The growing number of
new shops suggests that low-price competition and wide price ranges
will persist for some time. Just as in desktop publishing during the
first half of this decade, web service providers today are
under-pricing each other as they fight for prime positions on the
information data highway.
Value pricing is key to
the success of a web service business, and smart shop owners can
succeed with good information and intelligent pricing decisions.
Pricing is both an art and a science, but information is what gives
an owner the edge in business today. Pricing should be a pro-active
event. Web service providers can maximize their bottom line by doing
their homework and by reaching for information that can make the
difference. Develop the skills. Understand and control costs. Add
value to each job, and then price to what the market will bear.
There truly is plenty of gold out there for web service
professionals.
