RE: OT (sorry): Web site Pricing

[Kevin Chipalowsky <kchipalowsky@yahoo.com>]

Noel,

You've asked a great question.  Here's my $0.02:

The accepted practice for most professional services
is per-hour pricing.  It's a horrible model.  It puts
the service provider's interests in opposition to the
customer's interests.  If you're charging per hour,
then you want the project to take as long as possible
so you can bill for as much as possible.  The
customer, however, wants the job done quickly and
doesn't want to feel like they've taken advantage of.

If you can give your customer a fixed quote (or quotes
for each feature), then you're setting yourself up for
greater customer satisfaction.  You and the customer
will be working towards the same goal: finish the
project quickly.

Unfortunately, inexperienced software developers will
probably screw themselves if they quote a fixed price
for a project.  Inevitably, requirements change.  Even
with a formal procedure for changing requirements and
re-pricing, the customer will always try to sneak in
new requirements by going around the process.  To make
things worse, most software engineers underestimate
the amount of time it will take to accomplish anything
-- usually by a factor of at least 2.

So you have a dilemma:  Should you charge by the hour
and let the customer always wonder if they got the
best deal, and therefore make them question whether or
not they should hire you for future projects?  Or
should you quote the customer a fixed price (this
almost guarantees their satisfaction at the end of the
project), and risk losing money on the deal if your
estimate was incorrect?

In this case, I would charge by the hour, because you
said the requirements are so unclear.  It's what most
consulting firms would do, so you'll be able to get
away with it.

It will be your responsibility during the project to
convince the customer that you are spending their
money wisely.  If you forget this step, they probably
won't say anything, but they also won't ask you to
come back for the next project.

If you're not sure about what rate to charge, check
out Janet Ruhl's site: www.realrates.com.  It's the
only reliable site of its type that I know of.


Kevin


--- "Stieglitz Noel (fin2nxs)"
<fin2nxs@ups.com> wrote:
> It will be a website with:
> 
> "Library" of media to check out posted by
users for
> a fee (cc transactions).
> Public and Private Chat rooms w/webcam access. 
The
> chat rooms will be
> administered by users of the website (create own
> room and administer it).
> 
> I haven't got the requirements yet, so I am not
sure
> what is involved.  I
> was really just asking for maybe some high-level
> rules that may apply to any
> web project, or, for those of you with
experience,
> your own personal
> preference.
> 
> Thanks again,
> Noel
> 
> -----Original Message-----
> From: James Mitchell
[mailto:jmitchtx@telocity.com] 
> Sent: Thursday, November 07, 2002 1:25 PM
> To: ajug-members@ajug.org
> Subject: RE: OT (sorry): Web site Pricing
> 
> 
> That depends on what you are selling.
> 
> James Mitchell
> Software Engineer/Struts Evangelist
> http://www.open-tools.org
> 
> "Only two things are infinite, the universe
and
> human stupidity, and I'm not
> sure about the former."
> - Albert Einstein (1879-1955)
> 
> 
> > -----Original Message-----
> > From: Stieglitz Noel (fin2nxs)
> [mailto:fin2nxs@ups.com]
> > Sent: Thursday, November 07, 2002 1:04 PM
> > To: ajug-members@ajug.org
> > Subject: OT (sorry): Web site Pricing
> >
> >
> > Hi all,
> >
> > I am about to start a large web project, and
I
> don't know anything 
> > about pricing.  Should I charge hourly or by
> feature?  Suggestions for 
> > quick reads (online/books)?  Your input is
greatly
> appreciated.
> >
> > Noel
> >
> >
> 


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