Ridiculous price-war and undercutting in Web Design

IrishExpat · 14-03-2013 2:48pm #1

Maybe it's just me, but I have noticed a steep decrease in prices of late with 'designers', particularly on Irish classified websites. From €200 down as low as €25 for web design.

I have to ask; what is their business model, if this amounts to a sustainable income? Or is it a high number of part-time designers or template-merchants?

If I begin work with a client it involves a number of time consuming steps:

initial networking, or email or call
initial consultation
organizing domain name / hosting (if they're not tech minded)
negotiating timelines and deadlines, and being extremely flexible
sourcing assets (if any)
beginning design process, including client along the way
rendering initial sketches etc to vector
possibly user testing
beginning to code (HTML5, CSS3, PHP)
Installing the chosen WP/Joomla platform
SEO and Analytics
Competitors Analysis
client training on using the WP platform
the list goes on ...

That's only one possible formula of the steps.

This, including continuous development in any number of software packages (Adobe, SEO workshops), never mind marketing myself and customer support amounts to a full-time job - and I price myself accordingly.

To see others then clearly re-selling templates or sub-standard design for €25 ... it 'must' be damaging this industry.

Am I missing something?

Open to discussion on this one.

Kenny Logins · 14-03-2013 2:49pm

€25? That's crazy. Where did you see this?

OU812 · 14-03-2013 2:53pm

I used to work in web design when a simple HTML site would cost thousands.

Made a comfortable living off it too.

Prices came down & I got out for a couple or reasons, but mostly because I could see the direction it was going.

It should still have a reasonable cost attached for something decent, but people are prepared to pay very little for anything these days

As an example but unrelated.

I was trying to give away a CRT portable TV on done deal & got loads of calls from people who wanted to know would I deliver it to them too.

Zamboni · 14-03-2013 2:56pm

It is like taxi drivers in Dublin. Low entry requirements.
There's thousands of teenagers/students out there who have these skills.
I'm not doubting your professional service but the simple fact is that there too many providers now.
Many customers requiring web development may not even understand what their business require are and might base their purchase decision purely on cost.
There is oversupply leading to a reduction in price.
This isn't 'damaging' the industry. It is just business.

IrishExpat · 14-03-2013 3:04pm

Kenny Logins wrote: »

€25? That's crazy. Where did you see this?

Gumtree.ie, if I remember correctly.

I'll try to track it down, but here's another one, offering for €70. Not 'as' bad, but still far too low. Once again, I'd love to see their business model.

http://www.gumtree.ie/cp-media-design-creative-in-dublin/web-developer-designer-available-at-a-low-price-464284291

Yes I agree the prices of old - several thousand for simple HTML markup - were overblown and ultimately unsustainable, and I'm all for clients shopping around for the best ROI, but there has to be a line.

I now receive work on nearly 100% referrals, but I've had clients bring this up before - "oh we saw a student offering a website for €50." or "we're thinking of going with Wix."

The best I can do is count to 10 and give the analogy of IKEA vs. commissioning a carpenter for a long-lasting, unique item.

Time to get out of this game and focus on upskilling for pure marketing/branding?

robfahy · 14-03-2013 3:06pm

I used to freelance, but got out and opted for full-time employment when I had to compete with "Irish" web design firms that had no clue what they were doing and outsourcing all their work to freelancers in India they had sourced online. They were easily able to undercut me and many clients just compared price, without taking any of the advantages of working with a professional into consideration. One client in particular, who I had worked with for years opted for a new local design firm over me, who offered to do an e-commerce website for him for €500. A few months later he came back to me when everything went pear-shaped. They told him they could no longer reach the web designer in India that was working on his website.

14-03-2013 3:09pm

If you're really lucky, you'll get a student who has enough talent to cover for lack of experience, and is willing to do sites for really cheap in order to build a portfolio.

Usually the service will involve

Install a CMS via control panel (customer pays for domain and hosting)
Add a free theme
Upload a logo through theme control panel

A portion of our client base comes from people on the rebound from these cheap site providers. I met one coming into work this very morning - he'd been in to me (twice), bought the cheap option elsewhere. Now he needs something that actually works and shows up in the search engines, from someone who will return his phone calls and reply to his emails.

Kenny Logins · 14-03-2013 3:11pm

Just had a peep at one Gumtree advertiser offering website design services for ~€99, has 5+ years experience, but is only 12 (or 13) years old. Fair play to him.

IrishExpat · 14-03-2013 3:17pm

Deleted User wrote: »

If you're really lucky, you'll get a student who has enough talent to cover for lack of experience, and is willing to do sites for really cheap in order to build a portfolio.

Usually the service will involve
Install a CMS via control panel (customer pays for domain and hosting)

Add a free theme

Upload a logo through theme control panel

A portion of our client base comes from people on the rebound from these cheap site providers. I met one coming into work this very morning - he'd been in to me (twice), bought the cheap option elsewhere. Now he needs something that actually works and shows up in the search engines, from someone who will return his phone calls and reply to his emails.

You're right, this is the 'one' advantage of the cheap option, but it can also 'burn' the client, who now doesn't trust designers after receiving the 'cheap' option.

Luckily I'm getting out of this line of work soon to focus on a very different industry, but in recent months I've re-positioned myself as 'the' go-to designer/consultant for a particular sector in a specific geographical area, and there's enough work to keep me occupied.

So a strong option is niche web design, but it takes a 'lot' of networking and relationship building and knowing the industry and its challenges.

pcardin · 14-03-2013 3:18pm

WordPress can do wonders nowdays and simple to understand and use therfore cheap prices. :pac:

smash · 14-03-2013 3:19pm

If someone tells you they can get it cheaper, then let them. A race to the bottom is not a race I want to be in.

devildriver · 14-03-2013 4:43pm

smash wrote: »

If someone tells you they can get it cheaper, then let them. A race to the bottom is not a race I want to be in.

Nail on the head right there!

Usually if a potential client questions my pricing and says they can get it much cheaper elsewhere I'll say "Great, give me his name I'll hire him".

The reality is there are some providers out there that can provide quality at low cost - but they are very rare. Most lowcost designers are poor quality and provide poor support simply because they have to produce high volume to make their pricing sustainable.

As a designer you must be able to convince your customer that you are offering value and quality and that does not come cheap. If they are prepared to sacrifice the professional image of their business for the sake of saving a few quid then it's best to let them go elsewhere.

off.the.walls · 14-03-2013 7:04pm

I find the fact that you're all targeting students as the problem with this rather offensive, I'm a student, I charge accordingly for my time. Not saying I can produce amazing websites but I can produce good quality either from scratch, templates and or wordpress themes depending on what it is that my clients want done.

But the fact is if people like me want to get the clients we can't be charging them thousands for a site that we can easily make with the skills we have learned and only by doing these cheap jobs are we going to have a portfolio impressive enough to get into the industry in order to be able to charge the higher prices.

Sonnenblumen · 14-03-2013 7:46pm

Spending lots or little on designing a site is no guarantee of value. It is easy to point the finger and point out the risks of a race to the bottom, but in my experience, the designers are hardly exclusive innocent victims? Why would any prospective client accept a poor pitch, no matter what the fee may be?

The sooner some of them realise they are not masters of life and quoting for open heart surgery the better. As for the ones that never reply in a reasonable time, well the bottom is probably nearer than they realise.

Another poster made a very valid point about young designers offering very competitive rates because they are building experience as well as a portfolio.

Wide ranging pricing is not unique to this industry, responsive better proposals/project pitches would be a step in the right direction to helping clients see the real value of professional design in practice.

Graham · 14-03-2013 8:17pm

IrishExpat wrote: »

Gumtree.ie, if I remember correctly.

I'll try to track it down, but here's another one, offering for €70. Not 'as' bad, but still far too low. Once again, I'd love to see their business model.

http://www.gumtree.ie/cp-media-design-creative-in-dublin/web-developer-designer-available-at-a-low-price-464284291

Looking at the other Ads from that advertiser he can also supply you with:

Avon consultation
Satellite TV (no license required)
Scratch cards
Porn/lingerie
Personal shopping
Personal training
Child minding/Nanny/Au-pair
Cooking steamer
Counselling (but only without pills).

gctest50 · 14-03-2013 8:57pm

Kenny Logins wrote: »

Just had a peep at one Gumtree advertiser offering website design services for ~€99, has 5+ years experience, but is only 12 (or 13) years old. Fair play to him.

"....where at age 10 he enrolled at Randolph-Macon College in Ashland. He graduated cum laude with a degree in mathematics and was a member of Phi Beta Kappa and five other honor fraternities.

Humanitarian aid efforts are benefiting orphans in East Timor and youth in Sao Paulo, Brazil, and Smith is helping people in Rwanda build their first public library.

He has met with presidents, including former President Bill Clinton and former Soviet Union President Mikhail Gorbachev, as well as Nobel Peace laureates, such as Ireland’s Betty Williams and South Africa’s Archbishop Desmond Tutu. His efforts have brought him before the United Nations Security Council and several state legislatures."

You'd never know sure - could be this lad gathering up a few euro to finish the library in Rwanda.

KonFusion · 15-03-2013 12:09am

Gumtree?

Seriously? Anyone getting their web guy off gumtree deserves whatever ****e they end up with :pac:

These people are not web designers. They do not drive prices down, and they most certainly do not pose competition to me, or any other legitimate web designers/devs/companies etc.

Do they damage the industry? No. They're not even in the same industry. They are not selling design, and the customers are certainly not buying it.

Do they damage an outsiders perception of the industry? Perhaps. But as already mentioned, that is not unique to our industry, and it's nothing new.

You can buy do-it-yourself eye surgery kits, but that isn't damaging the eye surgery industry

In a recent blog post by @Paddy, one of my colleagues, he was talking about the cost of a website and competition with services such as Squarespace etc, he mentioned a blog post by Eoghan McCabe talking about 99designs, which I quote part of below as it's pretty apt:

But I don’t advise people against using 99designs as long as they know what they’re buying. They’re buying their pick off the rails in T.K. Maxx. They’re buying their choice of sandwich filling in Centra. They’re buying LASIK@home. They’re buying a half-hour off a cheap hooker. They are not buying design.

So worry not lovely denizens of the design industry, these cowboys are only competing amongst themselves.

B1gft · 15-03-2013 12:15pm

My main business is web development but I am also involved with another unrelated business. The two business's are under pressure from people selling at major reduced prices. I find (not saying all) that the money goes into the back pockets, in other words, they do not pay tax. This alone, straight away, makes it hard to compete.

I think that developers or any small business person, has to find a niche, that is not over competitive. You have Google, the enterprise board and I think Blacknight giving free websites for one year, I think I heard someplace that they have giving 10,000 sites.
I had a pub as a client. A young girl, who was working part time in the pub, told the owner that he could get a free Website on WordPress.Com. He phoned me in a rage, thinking I had robbed him for hosting and support. I lost his business and God knows how many more from him talking.
The days are gone that the most expensive is the best (or people use to assume that)
There was a programme on Bloomberg called App nation, all about the App business. There was two 13 year olds who had made a successful maths App. 13 years old!
This business is changing.
Just for the record I thought myself WordPress when I was 43, imagine the kids who are computer savey in primary school. The competition is just going to get worse.
You can tell anyone the advantages of paying hundreds over little money, but the realistic situation is business's are, in the norm, cash strapped.

OU812 · 15-03-2013 12:23pm

Anyone copped the banner on the page

smash · 15-03-2013 6:14pm

off.the.walls wrote: »

I find the fact that you're all targeting students as the problem with this rather offensive, I'm a student, I charge accordingly for my time.

You charge too little!

The Corinthian · 15-03-2013 9:00pm

Most Web sites are not rocket science any more. It's not 1999, when you'd have to build a CMS from scratch, design the DB and write all the stored procedures, or do the designs separately, then cut them up and embed them in your code. The reality is with the range of CMS's out there nowadays, you can produce a full site, with a new design template, a surprisingly varied number of features and functionality (including fully functional eCommerce shop-fronts) and the whole thing won't take you more than a day or two at most. And that covers probably 95% of Web sites.

Of course, there's more to it like that; undeclared nixers allowing lower prices, desperate Webdev firms trying to get some cash-flow - any cash-flow - to survive a little longer, and also cluelessness on the part of suppliers who underestimate how long a project will take.

However, for 95% of sites in the SME sector, a monkey with a few spare weekends to figure out how to set up Wordpress and apply a template is all that's needed and this ease of entry along with Irish clients always looking for something for nothing (or at least close to nothing) and have no issue with substandard work, means that the Webdev market is a bit of a turkey nowadays.

Except for that 5%. That's where you get your rebounds, when they've realized that the bottom-feeder they've hired can't actually do the job, even at a substandard level. Where you actually need to code or design from scratch and understand what you're doing rather than cut 'n paste. But those projects tend to be with larger firms (who have special requirements) or the public sector (as they have to show they did due diligence when awarding the contract).

There be money there still.

KonFusion · 15-03-2013 9:42pm

The Corinthian wrote: »

Except for that 5%. That's where you get your rebounds.

That makes it sound like only 5% of people are getting professional work done, and only after they go with some idiot

I disagree with you on the 95% of SME's remark. I don't think it's that high. There's plenty of SME's out there (and startups) who have a brand, and need a site that maintains and/or reflects that brand accurately, where a scraped together wordpress site just won't cut it. But yes, I do agree that for a majority of them this is the case, but these people should never be one's target in the first place, so does it really drive down prices for bespoke web work? I would say no.

There's plenty of work out there (if not more so than ever? I need an infographic or something :P), and still plenty of people who recognise the value over some guy off gumtree. I know a number of firms so busy with projects that they're turning down work (albeit this is only in the past 6-12 months), or referring it on elsewhere to smaller firms.

You can compete on price, or you can compete on quality. If you're selling a homogeneous product, such as wordpress with an off the shelf template, then you can't compete on quality, and you're in a race to the bottom.

So we're competing on quality, selling a completely different product. These guys/gals doing the off the shelf sites "for 95% of sites in the SME sector" have no true bearing on us, other than I mentioned in my previous post.

If the thread is about them, then yeah sure, it's a price war where they undercut each other in a race to bottom of the bargain bucket.

But if it's about us, I don't feel there's a 'ridiculous' price war, or major undercutting. No more than there is in any open market.

The Corinthian · 15-03-2013 9:55pm

KonFusion wrote: »

I disagree with you on the 95% of SME's remark. I don't think it's that high.

The percentage wasn't exactly scientifically derived, it was meant more for illustrative purposes. My point is that nowadays, it's pretty clear that a significant, if not overwhelming, majority of Sites are built on the back of such CMS's, and the skill required in managing, modifying (all but low level) and installing them isn't exactly rocket science.

If the thread is about them, then yeah sure, it's a price war where they undercut each other in a race to bottom of the bargain bucket.

I understand that, but as I said, they're able to do what these clients want at a level that the clients are willing to accept. Why pay a more expensive firm to do something that is so easy to get into that a monkey who charges a quarter the rate will do quite adequately?

In short, stop chasing brochureware and other simple site contracts.

CelticRambler · 15-03-2013 11:41pm

It's not just the bottom drawer designers that damage the reputation of this sector but high-price, high-profile projects too. Think of the new-look Irish Times, the EU Presidency, Discover Ireland - all big-budget, professional designers and severely criticised (rightly) on this very forum. That encourages SME owners to question the value of paying 000s when there's no obvious correlation between price and quality. So they think 'why not risk 50 or 100 on "some student" effort?'

There's also the problem of what to do with a website, or what to expect from it. I'm old school - I love hand-coding and keeping file sizes to the absolute minimum (a side effect of learning in the days when 16k RAM was massive) - so I appreciate sites that have a "handcrafted" feel to them much more than a collection of widgets and applets and two dozen calls to third party sources.

redman85 · 16-03-2013 1:10am

The Corinthian wrote: »

Why pay a more expensive firm to do something that is so easy to get into that a monkey who charges a quarter the rate will do quite adequately?

Can I ask what experience you have in web design / development?

The Corinthian · 16-03-2013 7:42am

CelticRambler wrote: »

It's not just the bottom drawer designers that damage the reputation of this sector but high-price, high-profile projects too. Think of the new-look Irish Times, the EU Presidency, Discover Ireland - all big-budget, professional designers and severely criticised (rightly) on this very forum. That encourages SME owners to question the value of paying 000s when there's no obvious correlation between price and quality. So they think 'why not risk 50 or 100 on "some student" effort?'

Those costs tend to be bloated as a result of non or extra developmental costs. Doing any kind of IT project for larger orgs is a very different beast to doing one for an SME, and unless you're willing to suck up the extra hours that are often imposed by the internal bureaucracy, politics and due diligence demanded by such projects, then they add up, I'm afraid.

redman85 wrote: »

Can I ask what experience you have in web design / development?

Over fifteen years. You?

devildriver · 16-03-2013 12:43pm

KonFusion wrote: »

You can compete on price, or you can compete on quality. If you're selling a homogeneous product, such as wordpress with an off the shelf template, then you can't compete on quality, and you're in a race to the bottom.

So we're competing on quality, selling a completely different product. These guys/gals doing the off the shelf sites "for 95% of sites in the SME sector" have no true bearing on us, other than I mentioned in my previous post.

If the thread is about them, then yeah sure, it's a price war where they undercut each other in a race to bottom of the bargain bucket.

But if it's about us, I don't feel there's a 'ridiculous' price war, or major undercutting. No more than there is in any open market.

Exactly. I think this is one of the most important dictinctions on these types of discussions.

We're simply not comparing like with like.

When these araguments break out (regularly in my experience) about design being too cheap or too expensive we find that everyboy from the lowly Wordpress hack flinging together nasty templates right through to huge agencies that charge hundreds of thousands is bundled together as if they were the same thing.

They are not. And their clients are not either.

They have different requirements, expectations, audiences and budgets.

That encourages SME owners to question the value of paying 000s when there's no obvious correlation between price and quality.

No obvious correlation - well that's questionable but for the sake of argument if we can see two sites that "look" exactly the same does that mean the process of creating them was exactly the same?

Trojan · 16-03-2013 3:00pm

It's become a bifurcated industry - this a natural development of the industry life cycle, and trying to prevent it is futile. Instead, be aware and embrace it.

Aaron Wall (SEObook - great blog) writes about this issue in SEO:

Aaron Wall wrote:

This is why it is so hard to find a great SEO to recommend for small businesses. If that SEO really knows what they are doing & understands the market dynamics, then they probably won't serve the small business end of the market very long, or if they do, they will do so in a way where their continued flow of payments is not tied to performance.

The issue in web design is very similar. Our market is becoming polarised with more and more low end services coming online.

You can optimise, scale and replicate in order to service the cheap web-design-as-a-commodity end of the market, or to go for the opposite end with high quality, customised services - provide something different that only you can provide.

It's also possible to use segmentation to attempt to service both markets with different brands (even with identical products: Old Navy vs. The Gap vs. Banana Republic).

Another option is product creation - apps, software-as-a-service, elearning, etc. (This is something I've done myself - creating SelfAssemblySites to service the web-design-as-a-commodity market.) SEOmoz abandoned SEO consulting and created a membership site that provides tools instead - far more scalable.

As web design customers become more experienced and educated, they will start to see the value of higher quality services. I've seen an interesting pattern - I've found that a typical startup business will be happy with their 3rd website.

The first they've usually paid too little for (seeing it as a commodity) and the site is unprofessional. The second time around they've paid too much for, but the site is still not good enough as they didn't plan and spec it out properly. By the time they get to the third attempt at it they have their ducks in a row: they are far more educated in what they need the site to do, and about how to manage the design and development process.

Actors often talk about the "5 Stages of Fame":

(Actor) Mary Astor wrote:

Supply the name of any well-known player, and the producer/director/casting office says,

1. Who's Mary Astor?
2. Get me Mary Astor.
3. Get me a Mary Astor type.
4. Get me a young Mary Astor.
5. Who's Mary Astor?

The same applies to being remarkable and building a brand and reputation in our industry. If you want to service the high-quality end of the spectrum, you want the customers saying "Get me Mary Astor".

The competitive advantages the marketplace demands is someone more human, connected, and mature. Someone with passion and energy, capable of seeing things as they are and negotiating multiple priorities as she makes useful decisions without angst. Flexible in the face of change, resilient in the face of confusion. All of these attributes are choices, not talents, and all of them are available to you. -- Seth Godin, Linchpin: Are You Indispensable?

maccored · 18-03-2013 12:38am

This thread makes me wonder if web design in itself, as a standalone business model, isn't really just dead. It's being swallowed up by web development work, where you supply VP web servers and look after everything for the client, including their design. Most SMEs Ive met dont use their sites to it's best abilities, mainly because it was designed like a printed brochure, and not like a shopfront to a digital world. Thats where most low cost web design focuses itself and as a result their clients WILL be happy enough, as thats all they have come to expect from a website. Many SMEs have to be approached with a solution to how a website will improve business, and thats outside the remit of low cost designers.

B.A._Baracus · 18-03-2013 12:49am

Graham wrote: »

Looking at the other Ads from that advertiser he can also supply you with:

Avon consultation
Satellite TV (no license required)
Scratch cards
Porn/lingerie
Personal shopping
Personal training
Child minding/Nanny/Au-pair
Cooking steamer
Counselling (but only without pills).

That is insane!!! :pac:
I put the sellers mobile number into google and all the above came up. lol.

What a chancer. lol.

Sonnenblumen · 18-03-2013 10:34am

Perhaps he's another example of a budding well diversified entrepeneur whose name might remind you of something sweet?

Oh Lord, it can't be?:D

Ridiculous price-war and undercutting in Web Design

Comments