Freelance web development pricing tips.
Follow these pricing tips to earn more as a freelance web developer.
ALL you need to know 🧵👇
❌ Too many developers are quick to say $'X' for a 5-page website based on what the “going rate” is.
Or they just charge whatever hourly rate they think is fair for their level.
I’m going to share why I think there is a better approach.
There are 3 main pricing options most web developers choose:
1 → Hourly Billing
2 → Fixed Price
3 → Value-Based Price
⏱️ Hourly Billing
MOST client disagreements come from charging hourly.
The client expects the task to take 30 hrs and you take 50 hrs.
Oh, but you tracked your hours for proof?
So what. A client will question your knowledge and expertise then.
Hourly Billing discourages efficiency.
If you can buy a code snippet, a plugin, or a website template for $100 to save you 2 weeks of coding, why would you do that?
After all, you're charging for your time - not the fact the task can be done quicker and easier.
Hourly Billing is bad for those who are more knowledgeable.
Some websites can be completed within a day.
Do you just take your hourly rate X 8 hours?
...then you're missing out on more $ and you need 22 clients each month.
Bob charges $100 /hr.
Fred charges $200 /hr.
Because Fred is more qualified and experienced, he can complete the task in 1 hour = $200.
Bob is qualified, but not as experienced as Fred, so this task takes him 3 hours = $300.
Bob ends up with more $.
💰 Fixed Price
This is where you estimate how long the project will take you and how much you want to earn.
Let's say it will take you 1 month, and you earn $5k, then you'd charge $5k or a bit more.
Although not the best solution, I do find Fixed Pricing better than Hourly Billing.
But is there a better pricing approach?
📈 Value-Based Pricing
Can be summarized as:
❌ You’re not selling HOURS.
✅ You’re selling potential RESULTS.
Here's how to do it:
Find out the potential increase in sales value of the project to the client over a year.
Then base your price off of this potential return.
Your fee should be around 5-10% of the annual sales increase.
A business sells drones. They ask you to create an improved website to increase their sales.
Your 2 main questions should be:
1 → How many sales do you currently get each month?
2 → What is your average selling price of a drone?
They answer with:
→ 10 sales per month
→ $8,500 each
You then do simple math to figure out how much they earn each month ($8,500 x 10 = $85,000).
You look at their website and see what they are doing currently, but where they can improve.
Then you work on a low estimate of what you expect sales could increase after you make a conversion-centered website.
(This is based on experience or CRO knowledge)
In this scenario, let’s say you are confident your improvements will generate 2 sales extra per month.
This means the business would make an additional $17,000 per month and $200,000+ in the first year.
You then prepare your proposal with this mentioned.
Based on the above, your price could be $10,000 - $15,000.
Would you, ‘as the business owner’ be willing to pay around 5% of what you could potentially earn after one year?
You won't close EVERY client like this.
But you will get the RIGHT clients.
💳 Receiving Payment
The main issue for freelancers:
Not getting paid on time.
You do the work, the client is either not happy or the project is never “done” so the final payment gets delayed or not paid.
ALWAYS get 100% payment upfront.
Just explain that it’s company policy.
If it’s a deal-breaker, then get 50% up-front and decide on the 2nd 50% payment date.
Make sure it's before the project is complete.
Because a project that is “done” is relative to both you and the client which could take months.
🔥 BONUS Tip:
ALWAYS provide 3 pricing options to choose from.
1 → $3,500 (Website)
2 → $5,000 (Website ++)
3 → $8,000 (Website +++)
Most clients choose option 2.
Read why and get my free Proposal Template here 👇
🔥 ANOTHER BONUS Tip
Clients wanting to pay the lowest price are often the most difficult to work with.
I hope this thread helps some of you ❤️
For further reading:
1. Hourly billing leads to client disagreements.
2. Hourly billing discourages efficiency.
3. Fixed pricing > Hourly billing.
4. Value pricing > Fixed pricing.
5. Don't sell your time.
6. Get 100% payment upfront.
7. Always offer 3 pricing options.
8. No cheap clients.