Don't worry about competition like that. Probably the only time that they will be offering support is during the 30 minutes of time. There is likely going to be very little customer support there, which is something that you would want to stress in your sales presentations.

Edit: I just looked at their prices. They are baiting you with the cheap price, but if you want any additions you are going to pay for it. $400 for a logo, $120 to make it mobile, $25 for a paypal button, all of this is going to add up quickly and be much more than a couple of hundred bucks.

Horrible business model, and I agree with the previous poster, he will disappear on his customers.

I took a look at their pricing page.

I can't find where it says how many pages initially, I'm going to assume 1, not sure what their "One-off" means. Because down below they mention $75 per page there after. So a five page site could actually cost $497, $197 for the first page and $75 x 4 = $497. So not all that impressive or scary so far.

Next, they are using a CMS, in fact it's Wordpress and they are buying premium templates from Themeforest. You have to learn to dig a little.

So after you break everything down it's not all that impossible to make money the way they are doing it but you didn't dig enough to uncover how they are doing it. I'm not trying to beat you up but you have to learn to dig a little and analyze what you find. I did this in like 4 minutes albeit it's not exhaustive.

Also, they are making money from the hosting..I almost forgot to mention that one. It's a biggy. You could actually give websites away for cost and if you get the hosting you would make money every month for the life of the customer.

I charge way way more than that for my websites. But then again I don't want to play with customers at that level. Too much of a headache.

I really hope this helps. Don't be initimidate!

I took a look at your websites and then I took a look at your competitor's websites. There is no comparison. I can tell at first glance that your websites are custom designed. Your competitor is using templates and they look like templates. Anyone with eyes can tell the difference. I wouldn't worry too much about these guys. You get what you pay for.

Randy

Thanks for all the responses guys

I don't think I should be worried either. The main thing that got got to me is that his sites look so good, albeit not custom.

Perhaps adding that type of model into my business wouldn't be such a bad idea. Custom websites and templates. Cheap and expensive. For customers with different budgets. I would increase my custom designs to $1000 ($997) and then have templates for $247 or something.

Either way, good competition is always good. It makes you grow. As a result I am going to do some serious business model re-thinking.

Thanks for all your responses guys

You're welcome!

And if you are up to it don't forget hosting. Add hosting to your repertoire if you don't already have it.

Yeh I definitely do offer hosting. In fact 100% of my clients use my hosting.

Plus then the SEO which is a huge money maker, or even google adwords management.

Right now the main thing I'm lacking is a decent funnel and a decent website of my own. My whole business structure up until now has just been websites and SEO when ever I can.

This can be a lesson for everybody, a good sales funnel will only ever help your business.

What I mean by this, is that you offer certain products in certain orders, at specific times. Each service has it's own selling and performing process.

Basically:

1: You sell the website. After the sale step 1, 2 and 3 are completed. Now the website is up an running.
2: After a 2 weeks of operation, you call and explain google adwords and sell them on it. $250 set-up, and then a monthly amount depending on their budget. (now they see how traffic leads to customers first hand, and you discover what keywords work the best all while they pay you)
3: After 1 month of adwords you explain SEO to them. Then upsell them that (much easier now they see the power of lots of traffic.)

Plus you are selling: Hosting, logo design, mobile website. (And for template customers all the other stuff like support, training, extra pages etc.)

In this whole process you ask for a testimonial at a certain time, ask for refferals at a certain time (like when going to sell SEO and then they get a discount)

So much stuff we can build into our business's. I for one know I have been incredibly lazy on this front. Not really developing anything of substance. Just selling websites over the phone for a good buck, and then upselling SEO here and there. Basically letting the customer controll the proccess, not me.

This is not to say that I am not making money. I have been sitting on about $3500 a week for the last few months now (not to brag, but just to say that simply selling websites and SEO in an unorganised way over the phone still works like a charm!) But if you want to grow beyond that small point you need to put the effort into the business as well, not just the sales.

Tomorrow I am going to spend all day developing my business model, and the process that all customers will go through (from every email I send; to everything I need from my customers; to everything that needs to be done to complete the service, the order and its time-frame).

Thank again to everyone who has responded to this thread. Whilst what I have said might not make sense right now I am having a big ah-ha moment that I think will really impact my bottom line

Cheers,

James

Also, if you notice, they have their logo and a direct link to their website on each of the example websites. This means they probably retain full ownership of the site or have that in the contract somewhere.

I agree with most being said here in the other responses....but this may also help asking yourself- "How does my webdesign outsourcer have a business at $150 per site- on the HIGH end?".

Thats what you are paying someone else, so, on another note, it may be a bit embarrassing if they happened upon this thread and saw that you cant believe people charge $199. and actually make a living...Just a thought

I dont think its unreasonable to believe someone could make a good living at $150 per hour... Even if they only worked 2 hours per day.

I wouldnt worry about it, there are probably ten others like him in your region that you arent even aware of and they dont bother you unless you think about them, otherwise you are just getting your weekly sales quota as usual and they are of no consequence either way...

Lastly, I agree, its a loss leader.... just leads into the premium stuff. Part of the pitching funnel.

There will always be competition in whatever you choose to do. Looks like you're working from a place of integrity - telling your prospect exactly what they can expect for the money you're charging them.
I like what you said about calling back your existing clients with other offers - and formalizing the process. That's been a bit of a downfall of mine. I do the work, get them on the hosting, monitor the sites and send monthly reports. Then look for more clients...
Think I'll be changing my own process.
Having said that, not all clients are going to need all services. Just depends on who they are.
Good luck with you business model. I'm

There will always be competition in whatever you choose to do. Looks like you're working from a place of integrity - telling your prospect exactly what they can expect for the money you're charging them.
I like what you said about calling back your existing clients with other offers - and formalizing the process. That's been a bit of a downfall of mine. I do the work, get them on the hosting, monitor the sites and send monthly reports. Then look for more clients...
Think I'll be changing my own process.
Having said that, not all clients are going to need all services. Just depends on who they are.
Good luck with you business model. There's definitely money to be made in the local market.

I agree I think the $197 comes with a massive upsell to get to a site that will actually do anything for you.

I knew a guy locally that was making pretty websites for $100 a pop. His eyes glazed over when I talked to him about conversion, seo, lead generation, etc. He basically was making digital billboards that might as well be on a dirt road to nowhere.

Wow, this has turned into quite an interesting thread!

Lots of great info.

Here is a newsflash... I'm not sure you realize this or not... but your websites are not custom. They are CUSTOMIZED templates, not custom. I could put up a "custom" wordpress site just like the ones you posted and it would take me 30 minutes.

Look at all the extras he has. That's how he makes his money. Contact page, additional pages, $75/each.. Hosting, SEO..

$200 website ends up being the same $800 website you sell.

The advantage you have... you're selling quality.. you're not selling cheap.

Not happy at all. One of the websites your competitor showcases is for a good mate of mine who knows what I do.

Grrrrr

Your competitor makes a nice looking website, and to the layperson, they are not much different from yours. He has a nice system. Get a client on board at an entry level price, let them get comfortable with the process and then upsell them. His average ticket is probably $500. If he's outsourcing it, he's making $400 a sale and probably much more.

Dont let it annoy you.... Its there for you to recognize it and to make the proper changes if you feel necessary. The important thing is that you are able to read in between the lines as all of your friends have done for you on the WF today. Your questions could and should have been answered by yourself in a few minutes by simply reading your competitors details. If you can't do this I fear your weakness !

Seems we have a few here that cannot take criticism.

"people in glass houses"
"you can give it but can't take it"

springs to mind

James,
Keep going mate. You're doing a great job (For a Seaford dude)

In addition to what's been mentioned before, eChimp probably is doing their own designs and coding and knocking them out in an hour or two. The two portfolio sites I saw look like they could be using twitter bootstrap.

Pretty good sites for only $150 outsourced!

@Sitefurnace:

Thanks man. It's hard to call out someone like IamNameless because of how active he is, you never know if your going to get attacked my a heap of others who are 'online' friend of his. But it seems like a few agree with me.

Anyway.... Definiately a lesson for a lot of people around here: There comes a time when you need to evolve your business model.

Right now there are a lot of people who originally just had trouble selling on the phone. But now we can do that we get lazy when it comes to actually building a "real" business.

I agree with everything you said there. In-fact I am going to begin using stuff from themeforest.net and just getting my guys to customize it a little, and set it up properly for the customer. That will make the cost cheaper, and the process quicker. After a month I will probably have licences to 20-30 quality themes and landing pages, depending on how my sales go.

Thanks again,

James

I don't understand the bashing on his competitor, why would he have bad support etc? And what's wrong with using templates? Who cares if it's a customized template if it's both better looking and cheaper for the customer? Sounds like a win-win deal to me.

Well good luck to you, I tried offering insight, if you don't like it you don't like it. If you didn't want an argument to start, you shouldn't have thrown insults at me because I have the type of personality that will address any question, and comment towards me. I hold no grudges though and do wish you the best of luck.

Yes, we have different definitions of custom. Custom to me, is built with no template, creating your own template from scratch, hand coded. Of course, it doesn't matter because a custom website, and a template can get the same results. The only time it makes sense to go the custom route, is from a programming aspect when they need something that a script won't handle. It really doesn't matter though, does it?

How about we get some more value from this thread...? Since we're already on the topic - how do you guys explain to your clients about customized themes and that their sites isn't entirely unique? In which part of the sales process do you tell them, or you don't do it at all? Just curious

John durham, I admire you sticking up for your buddy. I'll give you that. I am not a coward, I just don't like bullys and although it's not my fight I felt the need to address the balance a little and stick up for S62731 - you're doing exactly the same, you didn't initiate this but you've decided to join in - does that make you a coward?

I'm sure you can outsell me
Im sure you have sold thousands more websites than me
Well done for being a whole lot smarter
S**t, I even bet your d&*^s bigger than mine as well going on all your other triumphs so congratulations on that.

We can chest beat all we want but I'm not into that. Where I'm from, being humble is a character trait that is respected. Yes you might be better than someone else but you don't go around telling everyone - it's just not cricket.

If you think that because you have contributed more gives you the right to be rude then I despair and cannot argue with you there sir.

Custom, customized, none of this matters. No one is going to ask. The only thing that matters is the finished product. If business owner had the time to learn Wordpress, buy a template and customize it, he would. Some do, MOST do not. It's a headache. They want to write a check and be on their way. A template is a tool in your tool box. You buy it, install it and tweak it. You get paid for what you do and knowing how to do it.

I set a trap for a guy on another message board. That sounds lousy but it wasn't my intention. He boasted that he had created a from scratch website for another guy we both know. Prior to that, upon looking at it I asked him what theme he used, but he insisted he did all of his work as pure HTML from the ground up. Wordpress was beneath him. Ha ha. So, I proceeded to show everyone on the board which theme he used and where he bought it.

Duh, we can't inspect the properties of any site? The guy who bought the site wonders why he was charged $2000 for a $35 theme. Hey it's still a nice looking site. I guess he felt guilty and wanted to hide the evidence.

The extras are where these types of operators nail their clients.

-http://jaleigh.web-cast.com.au/
-http://demo.hrroofing.com.au/

If you can get sites like that built for $100 - $150 complete that is one hell of a deal. Tell you what I''ll buy sites like that from you all day long for $250

Or PM your source and I'll pay you a commission on each one I buy. I've never had that kind of quality out of India in that price range, in fact at double that price.

nice thread ...kinda like a tennis match...lol
btw ...all those links in the thread are giving your competitor free backlinks from a pretty high pr site..if it were me, I would go back and 'deactivate' those links...stay well and happy !

Most web design customers want the same thing...more customers for their business. Whether that means a custom solution or a template, most won't care if they are getting more customers for their business from your efforts. I would show the value of onpage seo then later you could upsell them to offpage seo.

I started out with coding from scratch but most customers want to be able to make small changes on their own (seasonal business hours, coupons etc.) and though I prefer coding html, wordpress is easier for customers to use so I have been moving in that direction.

This is an interesting topic. I'm learning new things

I haven't read anything but the OP, but is he really a direct competition to you? Are your potential customers telling you that they have decided to go with echimp instead of you? Otherwise it's something that you shouldn't even look at. If they have mentioned it, then just realized that $197 is a simple website with no support. It looks like you both do modified wordpress templates. He probably offers terrible support and it looks like he has really expensive upgrades (which I assume you include some of them in your price).

Even if he is your direct competition, you need to drive home the value of your sites over his and compare the total cost if they went with him (which would end up being about the same as yours).

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s62731 you seem like a good guy, with a great product. Send me a PM and I'll send you a report I've written on Pricing :-)

Some very good points made throughout this thread. Each web designer has to come up with the business model that works for them. I think the most important thing is to offer value and tell the customer exactly what they are getting. If it a customized theme or template tell the customer just that.

If you like their themes and want to know which one they are using just do a google search for "wordpress theme detector" theng bingo you know which theme to use and customize.

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