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The world's largest collection of prices and pricing related support tools for the desktop professional |
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current rates for writing, editing, graphic design, DTP, prepress, multimedia and web design and development |
| HOW DO I KNOW MY PRICE IS RIGHT? |
 Set your rates using
How to Price Graphic Design & DTP Services
or Pricing Guide for Web Services ($34.95 each)
These books clearly explain how to set prices that work. (Both books also include tips on estimating, bidding and
negotiating jobs.) |
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(A Comparison of Pricing in Large and Small Cities) by Robert C. Brenner, MSEE, MSSM
For years I've heard the expression, "But WE can't charge THAT MUCH in my
tiny town!" I decided to test this statement and find out if this hypothesis
is true, that prices and population density are directly related.
To do this, I accessed our company's extensive database of current
prices. I wanted answers to two nagging questions: 1) Are prices
substantially different in small towns versus large metropolitan areas? and
2) if so, how different are they?
I chose as my sample Northern California with over 2,500 data (price)
points that are current to June 1999. The data was partitioned by population
into four groupings: under 25,000, 25,000-49,999, 50,000-99,999, and 100,000
and more.
The smallest cities included Folsom, Goleta, Lake Tahoe, Red Bluff, San
Lorenzo, St. Helena, Truckee and other tiny towns.
The cities with populations of 25,000-49,999 included Burlingame, Chico,
Eureka, Gilroy, Monterey, and Roseville.
Included in the next grouping (50,000-99,999) are Livermore, Milpitas,
Palmdale, Pleasanton, Redding, Santa Barbara, Santa Cruz, and Walnut Creek.
The cities with population densities above 100,000 included Bakersfield,
Concord, Fremont, Fresno, Hayward, Santa Rosa, and Stockton. The largest
cities included San Jose with 783,000, San Francisco (724,000), Oakland
(373,000), and Sacramento (370,000).
I compared graphic design, desktop publishing and web site design within
these population densities. Here's what I found.
In the smallest cities graphic design averaged $57.16 an hour ($50
typical). The highest typical and average hourly rates were in cities with
populations of 25,000-49,999. Here the average hourly billing rate is $71.92
($70 typical). (Typical refers to the most recorded price point.)
For populations from 50,000 up to almost 800,000, the average price for
graphic design varied little (from $66.38 to $69.28 an hour). The typical
price was the same in all of these categories ($65 an hour).
A similar phenomenon was found with desktop publishing. With a sample
size of almost 300 companies, the highest average and typical price was in
the 25,000-49,999 population density. The average was $65.58 with $60 an hour
typical.
The smallest cities typically charge $55 an hour for DTP ($55.41
average). We found a similar distribution of typical and average prices for
the 50,000 and up groupings. In these two higher groupings the average price
varied from $59.57 to $62.75 an hour. The typical price was $60 an hour for
both groupings.
Web design followed a similar pattern. The highest average hourly rate
was $70.63 in the 25,000-49,999 population group. However the highest typical
prices ($65 and $75 an hour) occur in the top two groupings. In the smallest
cities, web designers are charging an average $44.60 an hour ($50 an hour
typical).
This analysis showed that, for Northern California, while graphic design
rates varied from $30 to $150 an hour with average prices varying from $57.16
to $69.28 an hour, the highest rates are found in the small cities with
population densities between 25,000 and 49,999. The same holds true for
desktop publishing and web design services. Thus the theory was confirmed for
the smallest cities (under 25,000), but was refuted for the second smallest
cities (25,000-49,000) when measured against the largest cities in the state.
I therefore conclude that higher prices are generally NOT determined by
population density. In reality, this research shows that shop owners charge
higher prices in smaller towns than they do in the densely populated
metropolitan areas. To see if this hold true elsewhere, in the next article,
I'll describe pricing in New York state.
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©Copyright 2001, Brenner Information Group, All rights reserved.
revised on July 10, 2001
