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Profit Margin Question

by mco5044
6 replies
  • WEB DESIGN
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How much profit margin should you tack on to building an ecommerce website? I'm building a huge ecommerce website with a completely custom CMS and need help figuring out how much I should actually make without losing the deal by charging too much. My programmers are in India so that gives me some price advantage. Development team says this site will take around 4-5 months to complete
#margin #profit #question
  • Profile picture of the author jbyte
    This is kind of hard to answer without more details. But how much time do you have to put in? What are the development costs?
    20% might be nice, but it's hard to tell without more information.
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  • Profile picture of the author webdelux
    Is this company going to be a long term client? Are they going to purchase other products like internet marketing? I would charge 50% to 75% more than your costs. On a big project make sure to add a miscellaneous column in your budget to hedge if your developers go over.

    4 to 5 months? Thats too vague.

    Tell them you want a breakdown of hours. How many hours for the HTML, CSS, Javscript User Interface? How many hours of PHP/ASP? How many hours of database development? Planning? Testing? Get some strict milestones from them as well, such as when will the user interface be ready? When is the soft launch? Etc.

    Hope that helps!
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    • Profile picture of the author mco5044
      Originally Posted by webdelux View Post

      Is this company going to be a long term client? Are they going to purchase other products like internet marketing? I would charge 50% to 75% more than your costs. On a big project make sure to add a miscellaneous column in your budget to hedge if your developers go over.

      4 to 5 months? Thats too vague.

      Tell them you want a breakdown of hours. How many hours for the HTML, CSS, Javscript User Interface? How many hours of PHP/ASP? How many hours of database development? Planning? Testing? Get some strict milestones from them as well, such as when will the user interface be ready? When is the soft launch? Etc.

      Hope that helps!
      Thanks webdelux! I have an affiliate relationship with the Merchant provider so ill make some long term money there.

      The final proposal will definitely have all of that extra information as well
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  • Profile picture of the author Andrew H
    My programmers are in India so that gives me some price advantage. Development team says this site will take around 4-5 months to complete
    This is sounds like a very big project. Indian firms are notorious for failing to deliver on large projects. Hopefully you, or someone you know, has done a lot of business with them before. Also be sure to build in milestones so you can check on the progress of the work to be sure things are getting done with high enough quality.
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  • Profile picture of the author Diversion52
    I agree with Andrew. You absolutely should make several milestones for the project so you can also manage the project as you go along. Otherwise you're setting up to either win or lose big. Use the milestones to offer it to your client and to manage it with your developer team.
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  • Profile picture of the author Michael71
    Indians and big projects? You get what you pay for... I hope this works out for you.
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