May 28, 2018

Understanding the price differences between web development agencies.

When negotiating with different web agencies, it can be difficult to compare apples with apples. How do you pick the solution that is right for your business?

Written by Cameron Germein

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If you've ever gotten a website built, you'll know that the price difference between agencies can vary tremendously, even for what is ostensibly the same thing; one agency says $10k, another comes back $50k. Why can there be such an enormous variation?

The reality is that both companies are pricing the website according to the costs they'll incur to deliver the project. The agency with a $50k price tag isn't doing it because they're going to squeeze you for $40k profit - they know they're not "competitive" at the price they've offered. They're doing it for a reason.

Some agencies use commercial CMS software that can have a five figure price tag on its own. Most agencies use open source software however, which is free.
Every agency will have a different rate structure, which allows them to cover their wages, costs and deliver a profit. If the wages and costs are particularly high, then the hourly rates will reflect this.
Some agencies will low ball the price in order to get the job. Some agencies will pad their estimates in order to offer a fixed price. You're going to have to try and work out which is which.
Some agencies do better, more time consuming work. Some agencies bash it out as quickly as possible. Quality plays a significant role in the cost of a project.
Some agencies will have done a poor job of understanding your requirements, and under or over-estimated as a result.

The best way to solve this dilemma is to pick the agency to work with that gives you the most confidence in their ability to do the job, and then negotiate on the scope of the project until you're happy with the cost. Look for an agency that asks you a lot of questions, and provides a detailed breakdown of your requirements and their associated costs. Always remember though, the more you spend, the better the outcome will be - so don't screw the agency down to the lowest possible price, the only possible outcome of that is the lowest possible quality website!

Assembler is a web design agency based in Perth, Western Australia. This blog is intended to be an informal, behind the scenes look into the web design and development industry. If you like our content, please follow us on LinkedIn or Facebook!