What's a fair price? and how to point that out?

Question

I'm a freelancer, but I don't actually get very involved with programming or application development myself. I thought this would be an interesting question to put across to you as many of you are technically focused freelancers.

I recently hired a freelancer to build me a simple app in Ruby on Rails. To cut a long story short I've so far paid over £4,000 and they still want an outstanding £2,000+. My issue is, the site is not very good and the only features it has are, you can sign in and out as an admin, edit products and upload new products, with descriptions, images and price. The developers have told me I'll have to put all prices in pennies since they haven't sorted that issue out, for example I have to input 1000 for £10.

I get the feeling what has been built could be put together remarkably quick and I'm wondering what your thoughts are as a community. I'm currently learning some Ruby on Rails myself and apart from the CSS they've done I could have done what they've done so far and quickly (I have no previous experience)

Thanks for you time.

Answer 1

I don't develop in Ruby but I am familiar with it. For the functionality you're describing, Ruby or not, you've spent a ridiculous amount of money.

There are PHP guys who'd work for $15/hr (I'm not one of them!) and for the price you've paid so far, it would have bought you almost 450 hours of development time. Perhaps you are working with a digital services "agency" that is greatly marking up the price of their developers.

As for pointing it out - you've already agreed to it. Maybe the best thing you can do is to get all your source code and find a less expensive option for further work. You've spent quite a bit for an app that doesn't do anything useful yet.

Answer 2

From what you described, we can indeed say that's something's fishy there. Yet again, if you take a look at my current project which I have been coding for 3 weeks now and has like 30ish classes, complete database layer with MVC architecture, etc., and again if you start it you will see only 3 UI screens with a few silly features implemented. Am I scamming my client cause he already paid not so little money? Not at all, because I am still coding the logic invisible to users (background logic).

My point is that you shared too little information and you did not tell us how you handled project management. Do you have a system of milestones? Did you approve of each milestone before going to another? Were you able to review the demo at the end of each milestone? Were you able to submit bug reports after each demo? These are just a few of the questions which you did not mention.

Your next step could be either of these:

• take a week break and review all current work and submit all bug reports and ask to be fixed before going further
• stop the project and ask the code. you may be asked to pay for all the work they did so far before getting your code
• tell them your worries about project costs and hire an external expert to review the project

Note as well: client are always worried about costs. How to explain some client that I will charge him 4 times more than "cheap coder" for the same product? I can't really. The client will never see that I spent 1 full day tweaking some animations while cheap coder will simply paste the code and finish the animation in 15min. On the surface, I may be overcharging the client (or scamming as someone said). But in the end, when users start liking app because of that simple animation and app starts getting him some money, everything changes. Web applications are expensive if they are to be coded properly. I (as a part of a team), once coded an app which we charged client like $100k for 6 months of work. Then the client returned to us after 6 months saying "guys guess what, I earned my first million" :). Ok this is just one good sample, but would this guy succeed if he found a team for $10k? Maybe yes, but I IMHO doubt.

Answer 3

This is your mistake: you hired a developer to make something that already exists and can be bought for less than it costs to make a new one. ALWAYS consider the cost of buying some existing software instead of paying to develop something. It is almost always more costly to develop something than to buy it. IMO, you're being charged fairly for what you're asking the person to do. Developing a fully featured e-commerce system isn't a small task.

However, it is a stupid task. I've been writing code for 30 years - I would never agree to do your project. We would need to have a really long conversation about why none of the hundreds of pre-built e-commerce solutions won't work for you, and even then I probably wouldn't take the project, or I would take it but inform you that I will be customizing an existing product. Ethically, I wouldn't feel right about charging you to develop a whole new e-commerce system. Unethically, I might charge you to develop the product and then I would sell it independently from you.

At this point, all you can do is try to mitigate the damage. Make sure your contract includes exclusive rights to the code so YOU can sell this e-commerce system if it's any good. Your other option is to just eat the loss, buy an e-commerce solution you can be happy with, and move on.

Answer 4

If you can provide us with a sample of the site to check the real complexity of it, we might shed some more light about what we consider a fair price.

I've recently started to learn web development three months ago (i like more PHP, since its available everywhere) and now i can set up this in 8 hours (version 1 took me 2 months and a half, this is version 2, from scratch):

(user/pass: juan)
    http://pringles.esy.es/intranet/computos/impresoras

The site is in spanish, my development and design skills sucks, but hey, this was done for free to cover a specific need i had at work (manage the toner stock wich we were doing by paper so far)

The penny problem is something i had to learn too, what you need to do is add the "step" configuration to the html control, like:

    <input type="number" step="0.01" value="0" name="pounds_amount"></input>

this way you can set pounds as the zero.

Regarding your question, a fair price is the price you are willing to pay for something, if you do your duty and research before contracting you will see different prices for the same thing, and then you settle for the one you feel comfortable, maybe someone from abroad (like me) will charge you 1000 o 500 for the job (currency convertion rates are a godsend for people in your country), but then he will work remotely, probably someone from the U.K. will charge you 4.000 for the job, but he lives close to your work and you can visit him to check progress...

Answer 5

Best way is to do like in real estate.

CMA - Comparative Market Analysis.

Find two or three comparables and show how your price is better, even if higher because it will also include you with your expertise.

Answer 6

While I don't program in Ruby in Rails, I think £4,000 might be a bit of a push, but certainly not an extra £2,000. However, you said you could do it yourself - but you haven't. And CSS alone won't get you very far. How many hours have they put in? Perhaps they are working weekends and late nights and they feel the price is reasonable for this unsociable hours.

I'm on the fence with this because while I didn't charge as much as this person is, I too had a client that was complaining on the price. I had to explain they were reasonable for time. This could be the same situation and if that's the case, either carry on paying or stop and do it yourself.

Perhaps you can come to an agreement to change the payment. For example, 'I'll pay you this but once we've reached X checkpoint I would like to stop, or pay a fixed price for Y to be completed'.

Always have a backup plan though in case they decide to throw in the towel.