Three weeks ago I received the following message on LinkedIn:
Hello, I’m looking for someone who could customize a WordPress plugin we bought. It’s a car reservation system, we need to change the pricing model and add a few extra SQL tables that would operate with the plugin.
The contact is a manager of some small agency, in his 50s, so I replied with my usual template for people who get in touch with me as I do dozens of WordPress things here and don’t look like scam – that I can forward that to my peers and share it in the relevant group if he has a post or at least a detailed project description, where scope, deadline and budget would highly increase the chance of finding a decent candidate. What I got as a response was quite stunning:
Thanks, the plugin costs $25 so I estimate the change would probably cost around $15.
That’s the kind of mindset that blows my mind. Really.
WordPress is free and Open Source
That conversation reminds me of a great post from Morten named “WordPress is not easy – and that’s okay”. Especially that quote: “We paid a WordPress developer $200 to build us a new theme and we’re having some issues”.
It also reminds me of Clients from Hell and other relevant resources, where I’ve contributed with real stories myself. Or the Freelance Freedom webcomic for the poor freelancer struggling with people who try to do business without being able to think clearly in the first place.
You know, I’ve heard people saying: “But freelancers should work for free, why else would they call themselves free lancers?”. There are real people out there who believe that freelancers are like charity workers, dedicated to helping people with everything for free, and they often use open source which is also free and is meant to be used so that the “smart” people could exploit that and make piles of money.
There have been hundreds of discussions about that sort of clients, and who’s responsible for educating them. Admittedly, I’m not very well aware of automobiles, or apartments. Still, I would be ashamed to just go to a car store or real estate broker with: “I want a car/apartment” providing them with: “I don’t have a budget” or “My budget is $200”.
However, there are different divisions of management consulting and their experts are willing to help potential clients to narrow down their requirements and form a decent specification, and also give them some rough numbers for the possible cost of whatever they want. However, if those consultants are charging $100 – $800 per hour and those clients want to spend $15 on something, there’s clearly something going wrong down the way. That’s why some cheap clients send “Request for proposal” forms to some agencies who do the heavy lifting for free and then send those documents to other freelancers to get the cheap number and work.
Yes, I’ve seen that quite a lot of times, and it’s terrible. And perspective matters.
You know what? I’ve also worked in companies who do Java and .NET development and I haven’t heard of many similar scenarios there. Why, you ask? Because those technologies are targeting the large businesses, the enterprise, the “fat” clients and still most of them run away from the “insecure” Open Source and their childish hippie philosophy of doing stuff for free. It doesn’t seem serious, and very few serious brands actually rely on the open platforms. Good thing that at least numerous governments slowly migrate to Linux and open CMS/LMS systems.
A WordPress Product Business Model
Disclaimer: I’m going to speculate here a lot about numbers, based on my personal observations and generalization. I don’t believe there are any numbers available for the public whatsoever, so I’ll go with my assumptions.
So, our client claims that when a plugin costs $25, then the customization can’t cost more than that said plugin, right? I guess that we should all be “freelancers” then, since we use WordPress, which is open source, hence our work can’t cost more than the platform we build on…
Anyway, so let’s talk rough numbers.
I was unable to find customer numbers for some of the larger plugins, although sources like Gravity Forms have shared some numbers: “Over A Million WordPress Sites Are Already Using Gravity Forms.“. That probably translates to over a hundred thousand customers. CodeCanyon shows some public numbers where the first 5% of plugins sell more than 1000 times.
Keep in mind that there are different ways to sell a WordPress plugin, different pricing models (one-time vs. recurring payments), different price range ($5 or $500/product) etc. Also, the uniqueness, complexity, richness of features and elaborate documentation + vivid community are key factors for bringing more sales to a product.
If we try to narrow this down to a product that is complete, well developed and extensible, and is sold in a marketplace, it would probably generate 500-5000 sales in the first 6-18 months. The price could be $20 – $120. Again, it’s all speculation: if your product is a simple “yet another gallery” built in 1h adding nothing in particular for the customers to be willing to buy it, and if you sell it through your blog with 50 unique visitors a month, then it won’t generate any sales, naturally. On the other hand, if it’s a decent plugin and you set up a site, share it in the social networks etc. or use a marketplace to distribute it, then you can quickly gain some speed and revenue accordingly. The price could also be $0 – $1000 even, but let’s talk some general rough numbers (even if we include extensions to existing plugins for extra features that are needed).
Assumingly, the $25 plugin that the client mentioned is a car service plugin, which makes it fairly rare and probably wanted, as there are enough car dealership stores around the world, it’s fairly cheap and doesn’t have that much competition. So if that plugin has made 2000 sales for the first year, that translates to $50’000. Or that’s how much do other customers value that plugin in general. That also includes some marketing costs, documentation, and (usually) support.
If changing the pricing model, adding a few tables, doing comparison etc touch about 2-5% of the overall features, that would cost $1000 – $2500 alone. If we refer to the previous example where costs are also allocated to support, docs and such, well guess what? Client communication, management, testing and plugin research are also added up to the end service which could translate from 5% to 60% of it, therefore the number is completely realistic, if not incredibly lower.
And what’s the difference between $15 and $1000 – $2500? It’s about 100 times lower than the realistic cost of the required service, in a regular market. And by regular market I mean a market where WordPress isn’t evaluated as “free so everything else should be free or nearly free”, but a general custom based platform or a proprietary software.
I’d still point out that it depends on numerous factors and the numbers are hypothetical. A different type of research could point out different numbers, geographical location has it’s role too, and most freelancers have no idea how to estimate anyway. Still, if we decide to take on the project, we have to communicate that project with the client, get the actual specifications, research the plugins and implement the changes, test it and ship it, that would likely be 5 – 50 hours of work at your rate. So unless you charge $0.3/h, I don’t think that this would be the project of your dreams.
The Actual WordPress Pricing
Brian Krogsgard just posted his thoughts on “How much should a custom WordPress website cost” and it’s one of the best pricing articles I’ve read lately. He’s outlining rough numbers for freelancers and agencies based on their experience and location, and it’s a good example of what’s happening out there.
That’s the type of thing that customers should refer to before approaching freelancers, consultants or agencies. What do you do before buying a car or an apartment? You browse car dealership websites, housing and real estate listings and generally form your opinion on how much does it cost based on some factors.
Some agencies provide rough numbers, packages and bulk prices for websites, which is cool. We’ve tried to provide some rough hours for smaller tasks in one of our projects even though every week potential clients keep ignoring those numbers and submit the N/A budget at the end.
Chris Lema has a great book called “The Price is Right” that sheds some light on pricing. He regularly writes on pricing and speaks about it at conferences. Other consultants have reviewed that subject additionally, and Troy Dean – another favorite consultant of mine – had his talk named “101 Ways to Demand Higher Fees” that also touches on a lot of marketing (which is what most consultants and freelancers forget occasionally).
The guys at WPML posted another resource on “Why Drupal Developers Make x10 More than WordPress Developers“. I specifically enjoy this one as Drupal is also an open source CMS just like WordPress, yet this research is proven to be true in many areas, and lots of agencies work with high-end clients as the platform is selling itself as an enterprise thing for serious projects, and not as a blogging platform for small business websites.
I’ve also written on Pricing and Product Marketing since we need to market ourselves properly, reach out to our target group, and find our niche, whether it’s a “quick dirty jobs to save small projects” or “boutique elite agency for badass high-end projects”. Either way the global underpricing is easy to be inherited as a philosophy by the majority of the clients, which is hurting the ecosystem and the overall quality of products and services we do provide as agencies, consultants, or freelancers.
If you have any real numbers for your larger plugins or themes that are not publicly available, I’d be happy to hear you out, just send me your comments or get in touch via the contact form.