How much should you charge to build websites? [Freelancing Tips]

What’s the best way to charge customers when building websites?

Should you use an hourly rate or charge by project?

When should you use a retainer model?

In this article, we discuss pricing strategies used by successful freelancers and explain why some creative professionals struggle to make $20 per hour while others are making over $15,000 every month.

Charging by the hour is a mistake

Although hourly billing is the de facto standard used by most freelancers (and can be good in certain cases), it’s not the best way to increase your revenue and get paid top dollar for your expertise.

Here are just a few reasons why hourly billing isn’t ideal:

• The faster you work, the less you get paid. As such, you are not necessarily motivated to increase your efficiency or learn more valuable skills.
• The only way to make more revenue is by working more hours. You start focusing more on volume and less on quality which makes it hard to stand out in front of potential clients.
• Because hourly rates are just a number, you are always being compared to your competitors on price, not the value you provide or your portfolio.
• Your hourly rate will undervalue or overvalue certain services you provide. You will either leave money on the table or get criticized for work that doesn’t seem to justify the price tag.
• Tracking your hours is a time consuming exercise that doesn’t help your bottom line.

Regardless of if you’re a designer, developer, or marketer who builds websites for a living, there are better ways to price out your web projects.

Project based pricing

The more sophisticated you get as a freelancer and the more predictable your work, the more you want to focus on project-based pricing. Here’s a quick example of how this works, and why it's the best approach:

How should you price this project?

Obviously, you can’t charge $120,000 for a website - you won’t be providing enough value to the customer and that price would not be competitive with other available options.

A website quote should come down to how much perceived value you can provide to your customer (i.e. “How much are they willing to pay?”). Furthermore, the quote needs to align with the required time investment so the project is profitable for you.

To illustrate different ways to price this project, let’s look at 3 fictional invoices where the total price is $12,000.

Although these quotes are made-up, they teach us several important lessons about customer behavior:

• Your hourly rate directly impacts your perceived expertise and value.
• A high hourly rate can be difficult to justify unless you work with high budget customers, meaning they will be more difficult to acquire.
• By removing hours from a quote, customers estimate the value of the outcome (results) and remove themselves from evaluating the process. Testimonials, reviews, and your portfolio can help address any potential concerns.
• Customers avoid uncertainty and don’t like to pay “extras”.

Challenges with Project Based Pricing

The two most common challenges to Project Based Pricing are project complexity and customer indecision.

The larger and more complex a project, the harder it is to evaluate. The same goes for dealing with indecisive customers that can make it challenging to estimate how many revisions they will request.

The best way to address these problems is by creating a detailed contract that covers the scope of the project and how reviews will be done. Your contract needs to outline what happens in unpredictable situations, such as new or unknown requests and dealing with never-ending review cycles.

Often, this will require you to add an hourly rate to deal with unknowns.

How to choose your hourly rate

Generally speaking, your hourly rate should match your level of expertise, your technical skills, and the industry or region in which you compete. It should not be based on how much you make divided by the number of hours you worked.

Here’s a quick example to illustrate:

Let’s assume you have an extremely efficient design process where you are able to build a high-converting landing page in 2 hours. Because landing pages provide your customers with a lot of value, you typically charge them around $1,000 per page.

Although all your customers are happy to pay you for the pages, they would be very hesitant to pay you $500/hour for your time.

This is why adding a line to your contract mentioning: “changes outside the scope of the project will be billed @ $500/hour”, is almost guaranteed to create customer pushback and make it harder to close new deals.

If designers similar to you charge $75 - $100 per hour, that’s what you should consider charging. If you go above that, clients will overly scrutinize your work and might look for alternatives.

The bad news is this hourly pricing strategy will leave money on the table. This is why, to maximize your revenue, you need to avoid charging by the hour.

How to avoid charging by the hour

• Do more customer research. The more you know about your customer and project, the easier it is to scope and price out.
• Gain experience. Project based pricing is much easier for experts than beginners.
• Work with experts. If you’re not good at logo designs or SEO, hire someone to help you do that. It’s much more efficient and scalable than doing everything yourself.
• Have a repeatable process as it creates efficiency and removes uncertainty.
• Reuse design components for added efficiency, such as templates. Custom designs are time-consuming and hard to estimate.
• Reduce the number of options you provide your customers; 2 options are often better than 10 options.
• Split up projects into smaller deliverables. If you know the value of 90% of the work, you should only bill by the hour for the remaining 10%.

How much should you charge to build websites?

The short answer is that it’s up to you. You need to come up with your price!

There are no formulas or rules that determine how much you should charge for websites or web-related projects.

Some people charge $500 for a logo and others charge $50,000.

When it comes to successful pricing as a freelancer, here are a few additional things to avoid and to consider when coming up with your prices:

Avoid

• Creating quotes based on the number of hours it will take to complete the task. If you’re going to do this, you might as well bill by the hour.
• Looking at what other people are charging for website projects. Although this provides insights into what clients are willing to pay, it should not overly influence your pricing.

Consider

• If you want to work with a specific client. Maybe they are a friend or an up and coming artist that would look great in your portfolio. Both are valid reasons for a discount.
• The customer’s budget. Often, the same project can be priced differently based on the industry or company you’re working with. This is why it’s always a good idea to focus on well-financed industries with high customer value such as professional services, construction, finance, events, medical, and e-commerce.
• Using a retainer model that includes your fixed costs and minor changes. Most people don’t mind paying a small monthly fee knowing their website is in good hands and that they can request small changes without being charged any extras.

Bonus tip #1 How to increase your efficiency as a freelancer

One of the best ways to improve your efficiency is through software.

While tools like Honeybook and Grammarly can help you get paid on time and avoid spelling mistakes, real efficiencies come from how you decide to create your websites.

Website building platforms like Pagecloud were made to empower creative professionals to build websites faster than ever and without code.

By allowing you to design and publish from the same tool, you can move projects from concept to completion in no-time.

The best part? By building with software like Pagecloud, you are providing your customer with a high-performance website while giving them the ability to make changes themselves.

Bonus tip #2 How to get more clients

There are several freelancing websites that enable you to showcase your work and attract potential customers. Upwork, Fiverr, and 99designs are just a few examples.

Unfortunately, many of these websites put a lot of emphasis on hourly rates and “starting at” prices for projects.

However, if you’ve built an efficient process for creating websites, you can attract customers on these sites even as a high-end creative professional.

While some freelancers purchase WordPress templates and make small changes to fit clients needs, others build with visual designers like PageCloud that leverage reusable sections to create custom sites in just a few clicks.

Pro tip: Most website builders have communities of freelancers or agencies building on their platform. Joining programs like Pagecloud Pros is another way to get free client referrals.