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Pricing for a customer

Is it fair to price an eCommerce store based on value of predicted sales?

1 Answer

You'd suspect that as long as you provide more value to the client than you ask for in compensation you're worth it. Some consultants (smarter, better, wealthier) advocate for value-based billing: Patrick McKenzie does this well.

On an ethical level I agree, it is definitely fair to charge people based off of the service you provide. Developers don't make money commensurate to A) how hard we work or B) how much value we provide to society. I've worked jobs that were harder and jobs that probably better serviced society and I haven't made near what I do as a developer. The reason developers (and business people, designers, locksmiths, plumbers) make good money is because they provide high value to their client.

However you're not just competing against other developers who charge based on value. Most developers will just charge an hourly rate, and assuming that the store is successful that rate will work out to be much less than your value-based quote.

Anyway, if you can get the client to go for it value-based billing makes sense. It pushes you to provide more value, puts your incentives inline with the client (whereas billing hourly has your incentives at odds) and will probably make you more money.