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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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How Much More in the Big City? by Robert C. Brenner, MSEE, MSSM
For years, I've heard it expressed by small shop owners, But I can't charge
THAT MUCH in my area!" Many small business owners feel that their prices
should not be as high as other shops, particularly those in the large cities.
Most believe that prices are significantly higher in the densely populated
areas. I decided to test this hypothesis.
To do this, I accessed our company's extensive database of hourly rate
pricing data. I wanted answers to two questions:
I chose as my analysis samples, California and New York, two of the most
populated states. I looked at three categories of service: graphic design,
desktop publishing, and web site design. About 6,000 pricing points were
involved in the analysis. The data for each state was partitioned into four
population categories: under 25,000, between 25,000 and 99,999, between
100,000 and 999,999, and those cities with populations 1 million and higher.
The statement of hypothesis was "Prices are substantially higher in large
metropolitan areas than they are in small towns or rural areas.
The small towns in California included Aliso Viejo, Calabasas, Capitola,
Dobbins, Fallbrook, Idyllwild, Lakeside, Larkspur, Red Bluff, Trukee and
Ukiah among others. Small towns in New York state included Catskill,
Cooperstown, East Quogue, Fishkill, Fort Plain, Great Neck Ossining, and
Warwick among others. In California, the largest cities are Los Angeles and
San Diego. In New York, we have the Bronx, Brooklyn, Manhattan, Queens and
New York City. Between these two population extremes, I analyzed a hundred or
so other cities with populations in the 25,000-99,999 and 100,000-999,999
categories. Here's what I found:
Small Towns (population <25,000)
In the smallest New York towns, graphic design averaged $54.46 an hour.
Graphic design averaged $63.78 an hour in California. The typical rate was
$50 an hour in New York and $60 an hour in California.
Desktop publishing averaged $51.96 an hour in New York and $58.32 an hour
in California. The typical rate in New York was $55 an hour. In California,
graphic design in the small towns typically costs $60 an hour.
Web design averaged $54.72 in New York and $63.33 in California. Table 1
shows this relationship. In both cases, the typical rate was $50 an hour.
-------------------------------------------------------
---------------------------------------------------- Small Cities (population 25,000 - 99,999)
For these size cities, graphic design in New York averaged $62.50 an hour
and $62.55 an hour in California. The typical price was $60 an hour in both
states.
Desktop publishing averaged $65.71 in New York and $58.30 in California.
Again the typical price was $60 an hour in both states.
The largest difference occurred in web design services. This work
averaged $80.01 an hour in New York and $67.07 an hour in California. Table 2
summarizes this relationship. Web design in small New York cities typically
goes for around $85 an hour. In California, the typical rate is $60 an hour.
----------------------------------------------------
---------------------------------------------------- Large Cities (population 100,000 - 999,999)
Next I looked at billing rates in the larger cities. The data shows that
in this population density, graphic design in New York state goes for an
average $46.88 an hour ($50 an hour typical). In California, it averages
$66.53 an hour ($65 and hour typical).
Desktop publishing averaged $52.73 an hour in New York ($60 an hour
typical) and $61.43 an hour in California ($60 an hour typical).
The largest price difference in this population category was for web
design. In New York, web design services averaged $43.00 an hour ($45
typical). In California, this same service averaged $66.33 an hour ($60 an
hour typical). Table 3 summarizes this relationship.
----------------------------------------------------
---------------------------------------------------- Major Metropolitan Cities ( 1 million plus)
In this category, I found a reversal in high prices. Graphic design
averaged $67.44 an hour in New York state ($60 an hour typical). It averaged
$57.25 an hour in California ($60 typical).
Desktop publishing averaged $67.79 in New York ($65 an hour typical) and
$60.26 in California ($60 an hour typical).
Web design averaged $72.92 in New York ($75 typical), but only $61.17 an
hour in California ($55 an hour typical). Table 4 summarizes this
relationship.
----------------------------------------------------
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Next, I compared the average prices for graphic design in all four population
densities. Table 5 compares the two states.
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Now it gets interesting. Notice that in New York, the lowest average
rates are not in the small towns, but in the large cities. Still, the most
expensive work is found in the major metropolitan areas. Not so in California
where the highest rate occurs in the large cities (not metropolitan areas).
Actually the average price in the largest California cities turned out to be
the lowest among all four population densities.
For desktop publishing, we find the hourly rates as shown in Table 6,
below.
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---------------------------------------------------- Finally, we look at web design service (Table 7) ----------------------------------------------------
----------------------------------------------------
What this data shows is that for graphic design and DTP, prices are higher in
the metro areas and larger cities. But the lowest prices are not necessarily
found in the smaller cities. Also, no correlation exists in web design
pricing relative to population density. For both New York and California, the
highest prices were found in the smaller cities. The lowest prices were found
in the larger cities and metro areas.
Therefore, the hypothesis has been disproved. Pricing is based on a number of
factors, and population density appears to be a minor player in the pricing
decision. Prices are not significantly higher in the larger cities than in
the small towns. Instead, billing rates are based on perceived value and what
each market will bear.
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©Copyright 2001, Brenner Information Group, All rights reserved.
revised on July 10, 2001
