Web design pricing - per hour vs per project

In the world of web design, there are two basic ways most freelance web designers and firms charge: per hour or per project. As the CEO of a web design firm, I work with both clients and freelance contractors. So I see this tug of war at both ends. When a new client approaches us for a project, their first question is usually "how much is it going to cost?". We normally charge our clients on a per project basis. However, I often come across clients who insist on knowing the per hour pricing. Somehow, they feel better when they hear a small hourly rate. These are usually the bargain hunters who often go with the freelance web developer or offshore web design firms who quote a ridiculously low hourly rate. I have heard of rates as low as $5 per hour. The part of the information that is missing here is the number of hours it would take to complete the work. Clients will often sign on with these designers thinking they’ll save money, until that $20/hour web designer takes five times longer to do everything than the designer charging $60/hour and the quality is also compromised.

To prove my point, here is an actual incident that happened. I often get resumes and emails from offshore free lance web developers and design firms. One resume really caught my attention as the developer had a long list of programming skills and yet had quoted a rate of $5/hr. It looked too good to be true and so I decided to get a quote from him for a project I was currently working on (for the sake of comparison). Initially the developer would only give me the hourly rate and kept assuring me that the overall cost would be much less than any other developer or firm. When i insisted on overall cost of the project, I was surprised to note that the rate he quoted was the same as the rate I had quoted my client on a per project basis !!!!

Some of my best clients are the ones who have already been through the experience of using these cheap designers/firms. They have already learned their lesson and this time, they are smarter and appreciate the value and quality that a more established design firm has to offer. As in every other service based industry, in the world of web design also you will see a full spectrum of quality and pricing.

When I am in the market looking for a contract web developer, I always go with a developer who can quote me a price for the project, not an hourly rate. Here is the reason why:

• Once I get a quote for the project, then I know exactly how much is it going to cost me. There are no surprises along the way.
• The developer does not have any incentives for dragging out the work indefinitely. This means the work often gets done on time.

The bottom line is, shop smart. The lowest hourly rate might not be the lowest cost service.