Pricing your design services is a dilemma that all web designers face. It can be very difficult to put a monetary value on your time and your experience. Whether you like this aspect of designing or not, it is something you need to do if you are a freelancer or if you operate a web design company.
Unfortunately, pricing your services is not an exact science. You need to consider a lot of factors in order to price a project correctly. And you may find that you need to price different projects in a different way so that you are compensated fairly.
In this article, I would like speak about the factors you should consider when pricing your web design services.
Hourly or Fixed
Design projects are normally charged as a fixed price or on an hourly basis. It is important to understand the pros and cons of each pricing structure.
Clients generally prefer to pay a fixed price for design work so that they know in advance the full cost of a project. The benefit of this is that both parties know up front what the cost will be i.e. a client wants a design and will pay you X amount of money.
For designers, charging on an hourly basis may be a more practical solution as it ensures you do not lose out financially if the project takes longer.
Consider a website design that you expect will take 20 hours to complete. Before you take on the project, you could quote the client a fee of $1,000 or an hourly fee of $50 per hour. If you charge a fixed price and manage to complete the website within ten hours, you have effectively earned an additional ten hours of income. But what if the project takes longer than expected? What if the website took 25 hours, 30 hours, or even 40 hours to complete? You could end up spending double the time you had expected for no additional earnings.
As you gain more experience in freelancing, you will have a better understanding of what is involved in a project. Therefore, if you are positive that you will not face any problems with a design, it may be worth charging the client a fixed price. However, things do not always go to plan and it is difficult to see the challenges that a particular design may present. That is why charging per hour is favored by many designers. A good alternative is to charge a fixed price for a project and then charge more if it takes more than an agreed number of hours to complete.
Even if you favor charging by the hour, you may be faced with the decision on whether it is worth taking on a project on a fixed price basis (e.g. a project advertised on a freelancing website or because a client wants to know the final cost up front). Be sure to evaluate each project and know the pros and cons of each charging option before you agree terms with the client.
Determine the Market Rate
Knowing the market rate for design work will help you price your own services effectively. You can do this by checking the rates of competitors on their website and through freelance marketplaces.
Understand the market that you will be targeting:
- Will you be offering your services locally or internationally?
- Are you targeting small businesses or large companies?
- Will you be taking on smaller jobs (e.g. logos, banners) or bigger projects (e.g. complete websites)?
Compare like with like to ensure that you have a realistic estimate of the market rate of your services.
Evaluate Your Own Skill Level
If you can put your ego to one side, it is worthwhile evaluating the quality of your services against competitors. This will help you determine whether you can charge more than the market rate.
- Do you have more experience than your competitors?
- Can you offer something that others cannot e.g. technical or design experience?
- Do you have a good reputation within your market?
Being aware of your own skill level will allow you to price your rates accordingly and justify these rates to clients.
Are You in Demand?
If you just starting out, you may have to drop your rates initially in order to build up a portfolio. This will help you secure projects you may have lost due to your recent entry into the market.
As demand for your services grows, you will be in a position to increase your rates. Turning down clients because you have too much work on your hands is a sure sign that you are in demand and probably not charging clients enough. So don’t be afraid to increase your rates if you have a lot of enquiries about work.
Identify Your Own Costs
Be aware of your business costs when you are pricing your services. On a project to project basis, you should incorporate the cost of any stock images or templates you need to purchase for the project. You should include any costs of hiring another developer or designer to help you with any problems you may face too.
Also take into account ongoing freelancing costs such as marketing expenses, telephone calls, insurance, and any traveling expenses that are involved visiting the client. The important thing to remember is that any expenses you incur will eat into your profits. Therefore, they should be incorporated into your pricing structure from the start.
Sign A Contract
It is in your interests, and your clients interests, to sign a contract before you work together. Your contract should detail:
- The estimated time to complete the project and what happens if the project takes longer to complete
- How many revisions are included with your initial draft
- Whether you will be working set days per week and whether you have any holidays planned
- How payment will be made
- What happens if the client changes their mind and wants to change the design
- What conditions need to be met to cancel the project early
- Whether the client be charged an additional fee if the project requires more work than expected
- Whether the client can pay an additional fee to make their project priority and finish the design sooner
- The amount of support, if any, that is provided after the design has been completed
It is not enough to have your terms and conditions agreed verbally with the client. You should sign a contract so that the law is on your side. At the very least, you need to make it clear on your website what happens in certain situations and have the client agree to those terms through an online declaration form. This will avoid unnecessary problems arising in the future.
After Sales Support
Providing support to clients can be a big drain on time. If you are going to provide after sales support to your clients, you should agree with them beforehand how much support is provided free of charge after you have delivered the final design. For example, you may include two hours of email support after delivering a website design to help explain how important functions work. Beyond that, you could offer additional support at a set rate.
A good way to earn extra money in the future is to set up a contract for two or three days of maintenance work and support every month on an ongoing basis (perhaps under a retainer). If a few clients sign up to this, you can easily increase your passive income.
Discounts for Loyal Customers
It sometimes pays to be a little flexible with your pricing, particularly when it comes to offering discounts to loyal customers.
- Will you offer a discount for placing more than one order?
- Will you offer a discount if the project is larger and contracts you to a longer period of time?
- Will you offer a discount to returning clients?
- Will you offer a small referral fee or discount to a client if they refer you new business?
While you should not get into the habit of dropping your rates, you should give consideration to offering discounts to good customers. Remember the 80/20 rule. 20% of your customers will bring in 80% of your income; therefore it pays to give preferential rates to your best clients.
Jeff Gardner wrote a great article for Smashing Magazine five years ago in which he spoke about the Quality-Price-Ratio in Web Design.
The quality of a design and the monetary cost of producing or procuring that design have absolutely no relationship whatsoever.
Jeff noted that, from a client’s point of view, a design will fall into one of four categories:
- Bad design that’s expensive
- Bad design that’s cheap
- Good design that’s expensive
- Good design that’s cheap
This illustrates that both the quality of your designs, and the price of your services, are subjective. Your branding and your confidence in your own abilities will therefore be a big factor on how you sell yourself to clients.
Ultimately, it comes down to how well you can negotiate a price and sell yourself to the client. Do not be afraid to walk away if a client is not willing to meet your demands, as you may have to turn down a higher paying client later because you have agreed to work at a lower rate.
It is common for designers to accept as much as 50% of the final price as a deposit. Some designers deliver the final work on delivery of the final payment, while others charge clients in stages. For example, the first payment before the initial draft, another payment after the next draft, final payment upon completion etc. Paying in stages reduces the risk for both you and your clients.
Another important thing you need to consider is the method of payment. Before you do anything, discuss with the client how you will be paid. You should be aware of the costs involved in accepting payment through a service such as PayPal, and the corresponding risk of a client making a complaint through a payment service about non-delivery. This is why many designers accept payment by check or direct bank transfer instead.
To get a better understanding of how other designers charge clients, I recommend reading this fantastic series of articles by David Airey from 2008. A total of 60 designers share the method they use to charge clients and why they chose that particular method. It is a great insight into how other designers operate.
- How 20 designers charge their clients (Part 1)
- How 20 designers charge their clients (Part 2)
- How 20 designers charge their clients (Part 3)
It may be tempting to do some work for a client before payment has been made, though it is better to wait until you have been sent the initial payment before you do anything. If not, you run the risk of doing design work for a client that does not pay up.
Pricing your services is a necessary part of working as a designer. If you take all pricing factors into consideration, you should price your services correctly. Though remember that pricing your services is not an exact science, so you need to accept the fact that you may sometimes under price your services. With experience, this becomes less of an issue.
While you may need to drop your prices a little at the start to encourage clients to try a designer with few past clients, be aware that pricing your services too low might attract tire kickers that waste all your time.
We are proud of the fact that web designers from around the world use Elegant Themes designs to create websites for their clients. Therefore, we want you to get a good price for the work you do by taking into consideration all the factors raised in this article.
Do you have any pricing advice to share with fellow designers? If so, please share your tips in the comment area below 🙂
Article thumbnail image by Doremi / Shutterstock.com
This article is useful for web designing, thanks for post.
I charge hourly, and my hourly rate is slightly lower than other web design / development business around me.
My pitch to clients is “I charge X hourly, and I bill by the minute for actual work done”. Before I give an estimate I get a full list of pages they want, how they expect those pages to behave (photo gallery, calendar, static page with an image or two, detailed tabled data etc), then I ask them how they want to proceed with graphic design (do they want to look at some pre-made looks and give me samples or do they want to give me some idea and I can send them a half dozen to pick from).
From there I estimate how much time it will take me to do what is on that list, citing things that may be variable (like they don’t know how many photos they’ll send for a photo gallery, and if they need any kind of cleaning up) could drive the pricing up.
If a client starts a ‘lets change the plan’ I always include a note to ‘keep in mind this was not in the original estimate conversation’.
Sometimes I’m off on a project because I’ve miscalculated how long a certain thing would take, or the solution you thought would work isn’t and you have to go back to the start again. What I usually do is take some of that time off the project and chalk it up to a learning process for myself.
But I try to stress to clients the sure way to drive up the cost of an estimate is to start changing things AFTER I start building the navigation. Clients changing their mind on page names, or the verbiage on those pages is what usually blows my estimates. I try to stress to them to go over their pages and the content on their pages within their own organization (their co-workers, bosses, supervisors etc) and make sure they are satisfied with it before sending it to me.
I have some local competitors who do the ‘package deal’ and I think it’s a rip off. They charge X amount for X number of pages, and then Y amount for Y amount of pages. Populating static pages takes no time at all. What takes time is creating the initial layout files. Creating additional pages based on those layouts usually takes less than 15 minutes if all you are doing is copying / pasting content they’ve sent you electronically.
I wrote this article here on the ET blog specifically to address questions like yours. For the most part I think other designers/developers found that the price ranges I specified matched their own experiences: http://www.elegantthemes.com/blog/resources/a-general-pricing-guide-for-wordpress-websites
This very useful artical for designing. Now I want to make it a great experience building quality sites and learn from it while earning an additional income.
great article this is. you can manage price on the basis of website requirement and website have many requirement so you can add price as per requirement. thank you for sharing…
I charge flat fees, clients have multiple packages to choose from, all of which have inclusions soecifically stated. I charge 100% upfront. You don’t pay half your air fare before departure and the other half when you land. I work with serious clients and have quadripled my fees since working with Divi. Additional work is quoted and clients are to pay first
It’s a great post. For a long time I want to be a freelance web designer. But I was not sure how to price my services. Your article will help me a lot in this regard. Thanks.
I used to develop sites myself back in the late 1990s, but today, I have a developer and a designer working with me. That said, I bought a package of design contracts that I’ve been using for the past 15 years. It clearly spells out what the client will provide (text, photos, etc.), what pages will be created and any special features on those pages. Mostly, I estimate how long the project will take and charge a flat fee.
If they want anything different, I’ll give them a change-order form that gets added to the contract. Until they sign the change order, the extra work isn’t done. I have a love hate relationship with the whole web development industry. Some clients can just be a lot of work – even with a smaller job. Other clients are great and I enjoy the projects.
Now that Divi 2.0 is out, I’ll be using it to upgrade most of my own sites. I’ve often thought that web designers should form their own support group to help each other navigate difficult clients and projects. This particular thread is a good example.
Me as well. This is something I’m thinking about also. I’d truly like somebody to have admittance to my spreadsheet that contains all client accounts, passwords, contact points of interest, and so on in the event that I get run over by a transport… . anyhow who? Maybe a decent subject for an alternate post Kevin?
Wow great insight, I have been thinking of getting involved in this arena I have done it before but for friends and for free. Now I want to make it a great experience building quality sites and learn from it while earning an additional income.
Nice and informative article! Today I was actually pondering on my pricing, because I lost some jobs to other designers over the last couple of days. Maybe I should consider an hourly rate over fixed price in some situations. Tough call!
I just wanna say thanks for these great articles, I also do sites on a freelance base for small business and yes pricing is not as easy to figure out, but I guess after doing for a long time you learn to discern the situations and giving a reasonable price.
On another note, I’d like any input on what any of you out there would change for a non profite site that has about 30 pages done in wp can someone send me some info or give me an idea. Much appreciate it 🙂 ..peace!
Thanks for this lovely article. Indeed signing the contract and fixing the rate is mandatory for Professional Website Designing Company, in order to avoid any problem in the future. Also by providing support after the delivery of the project; can help in creating a good relation with clients.
Great article, Kevin! Your knowledge in the field is much appreciated and I would like to Thank you for the insights that you provided through this article. This will help me a ton for setting prices for my customers (although it’s not related to website business but to Photography) on ClicksToRemember. 🙂
Very helpful information. Thanks for posting.
Thanks for the great stuff with some unique points that’s are most important for web designers.
According to me, its depend on the customers requirement and web designers skill.
I think it is dependent on client requirement and others functionality. Inner Pages price is different from the Home Pages.
How much should be charge for bilingual or multilingual sites? Let’s take the assumption that the client provides de translations and the atructure of the pages are exactly the same. What should it be, a 100% more or a lesser percentage? I am currently doing a re design of a quite large site: at least 250 pages in spanish and the same quantity in English. And having in account that nowadays Argentine economy is actually a disaster and it is very difficult for manufacturers to maintain their firms alive, I don’t want to overload the prices to not scare away the customer. I’ll appreciate your advice!! Thans a lot!
Hello, everybody. I am writing from Argentina. It is very difficult here to find designers willing to openly share what they charge for any kind of design. What is ussually done is to send a fake email pretending that we are a lead customer and ask for a quotation. So, other than doing that I found that if I go to the aid of the Graphics Designer Guide (US) I take the prices in u$s, remove two figures and those would be my prices in Argentine Pesos. If there happens to be any Argentine designer reading this it will be very helpful to share ideas and experiencies.
I also found a very useful tool in http://www.webpagefx.com: A proyect quote calculator. I hope you’ll find it useful. I use it, but of course, using that trick of the two figures and modifying some concepts that would not fit in our market. And, for example, their way to quote for SEO depending of the number of keywords I do not think that is appropiate.
I’ll write appart another comment regarding bilingual or multilingual prices.
I bookmarked this article knowing that I would need to revisit it in the future because I wasn’t happy with my pricing structure. I feel like I have a better handle on how I want to charge for my services and will be putting that knowledge into practice with a newly acquired client. It seems to me that the best way to price your time/skills is to use a fixed rate for a project based on the specs and then an hourly rate if you go over a predetermined amount of hours which are outlined in a contract. Thanks again ET for all the great info and keep the articles coming!
Good read. In depth knowledge, I have gained from here.
Designing a website based upon the user requirement is difficult. Web Designers should be capable of creating a eye catching website for their clients to get attractive results.
Hello, congratulations for the post. I am freelance Barcelona, I dedicate years ago to web design and seo, the hardest part is reaching an agreement with a client, because the competition there is very large, and the prices are usually very cheap, I can not compete with designers from other countries and according to the currency that is a gift to the customer, Greetings
Great article kevin.
As a web developer just starting in freelance I find it really hard to price my products, the main reason being that I live in a country(Mexico) where this type of job is really undervalued.
Guess I’ll have to lower my prices to build a portfolio.
Thank you Kevin for the timely article and thanks to those sharing good advice.
Everyone should have a written contract, signed with a down payment in hand before starting any work, no matter how comfortable you feel with a client. We only have fixed price projects and retainers. We’re in a situation now because we have a new (less than 90 days) client who had not yet signed the 8 month agreement for an entire marketing makeover. We have been working for 2 months to revamp all her marketing to start the turnaround in her sales decline.
Yesterday, she suggested that, because sales have not increased in these first 2 months, she may end our deal on July 30 and believes she’ll get the new website, Facebook, email system, Google My Business optimization, signage, branding, videos, etc for only the 2 months’ fees she’s paid to date.
Her July fees are due now. She paid June in 3 installments instead of on the 1st as we do with all our clients. Our response: if you’re really considering that, we need to meet Tuesday to let you know what we will release for what’s been paid. Thank goodness we have not given access to anything yet! That’s what we have to look forward to this week.
It’s amusing that some local business owners/medical professionals will order hundreds/thousands of $$ in over-priced promotional items, magazine ads, apps, and printing without blinking an eye at the price and the vendors’ huge margins.
Then they “nickel and dime” website designers and marketing professionals on our fees. Today, everyone thinks they can “do marketing” such as put up a site (thanks to wix, weebly, godaddy, etc) and design their branding (thanks to vistaprint). We are all dealing with this “you can be a marketing expert” environment in the US.
We overcome part of this here by sharing what the “overnight/DIY” sites don’t tell them about: Required Terms of Service/Privacy/Disclaimer pages, FTC email marketing rules/regs, and so forth.
We educate them to realize that a “pretty” site they make does not necessarily mean it performs well in lead gen, prospect cultivation or customer nurturing because they do not know the marketing essentials. (Opt-ins, offers, consistent communications, educational/informational selling).
Divi 2.0 gives us all the tools to build beautiful sites with the marketing essentials that get the lead gen and sales results high quality biz owners are looking for and make investments in excellent marketing to get.
Thanks for Kevin, Nick, and others at ET for this blog and everyone in the ET community who participates and shares the info that may well make the difference between profit and loss.
We’re raising our rates again this week and no longer will accept clients who haggle on price and compare us to their staff’s hourly wages. Earlier comments on this thread had some astute observations about this behavior by business owners.
We feel more confident in our decisions partly because of what we’re reading here and the unbeatable quality of Divi and Elegant Themes’ community in general that makes our business look so fabulous and keeps us on top of our game.
One of your best articles I think – very useful and covers most things. I am an experienced designer and knew most of this but still read it through. The biggest headache is “project creep” – clients thinking they can just add on new things – which to some degree is understandable as they study the work in progress, new idea and edits creep in. So I try to build in pricing flexibility and agree right up front what I am including. The other problem is the consultation process takes ages if a clients hasn’t a clue what they want or they expect you to write all their content. So make sure they can supply the content in advance… I find that filters the keen from the lazy!!
Thank you! Merci! Gracias! To Kevin and specifically to all the commentators because your ideas & explanations have been as insightful as Kevin’s article!!!
Great article! I always require 50% down by the client and give them a flat rate with the scope of work clearly specified in my contract. I give them one submittal and two drafts…anything more than that, I’ll give them an additional estimate. If the scope changes, it clearly states in my contract that I can give them a specific estimate for that as well. The contract should be clear on who does what and what’s expected otherwise the job is a waste of your time.
For the flat rate, I estimate the number of hours it’ll take me plus 20% as a fudge factor for any unforeseen costs. Usually, that covers it and everyone is happy.
For me, a client who is happy is a client who’ll refer me to others.
Excellent article, thank you, and some excellent comments as well.
I’d just like to add that I’ve raised my prices 50% since I’ve started using Divi, and I’m very comfortable with that because I know I can deliver an excellent website for my clients.
There’s one *really* important factor for freelancers I don’t see mentioned here, one which I find a lot of people don’t seem to understand. The hourly rate you charge a client has almost zero correlation with the hourly *wage* you might expect/hope to be paid if you worked for someone else. They shouldn’t even be compared.
Someone accustomed to being paid a perfectly good *wage* of $18/hour might balk at charging $75/hour as a freelancer — but she shouldn’t, and the reason is very logical.
The easiest way to explain it, I think, is this. Even though you may be only 1 person, you still have to spend time and money on almost all of the things a company does. Maybe you work from home and use the same Internet and phone service you’d already be paying for — great, that helps. But you still have to pay for computers, software, and other tools and services. And even more importantly, you have to spend a *lot* of time:
— Seeking and obtaining clients – setting up and maintaining your business website, and any other marketing and networking efforts you do
— Bookkeeping, invoicing
— Free initial consultations
— Maintaining software
— Continuing education
It goes on and on. I’m a pretty focused, efficient worker, but when I tracked my time for a few weeks once, I found that about ONE THIRD of my time was “on the clock”, even in a good week. So to be paid for 20 hours, I usually have to work about 60 hours. Track it yourself and see. It would be a very unusual freelancer who could work on the clock even 40 hours a week.
But if you want a viable business, and you don’t like working for free, you absolutely should consider that time something you should compensated for.
So charging clients $75/hour probably means you’re earning something like $25/hour. Subtract various expenses from that, and it’s easy to see that $75/hour is by no means the “high rate” that we’re sometimes accused of charging.