Why Development Companies Quote Radically Different?

Why do development companies quote radically different prices for the same project? Imagine this scenario: Your company needs to hire a firm for a custom web development project. You request several proposals to see how much the assignment will cost. However, the quotes that you receive are wildly different — perhaps the highest and the lowest are hundreds of thousands of dollars apart. Why did this happen?

To delve into the reasons, it is important to first understand the basic criteria behind web development quotes. Most companies will quote on a project based on the amount of effort (no. of hours) they think they need to complete the project and the average hourly rate they charge. Both numbers will vary wildly from company to company, thus leading to very different estimates.

Experience Matters

The first factor that could be responsible for those quote divergences is experience and developer skill set. Web developers with more experience might complete your project much faster than those with less experience. Thus, those skilled, seasoned professionals might be charging you for fewer hours. On the other hand, they may feel that their time is worth more, resulting in higher project bids.

Accuracy of Project Bids

Experience can also lead to more accurate price estimates. Someone who’s worked on countless web application development jobs, and has experience in the specific type of application and technology you need, will have a sharper sense of how much your project will cost. This experience will diminish risk and make time estimates that much more accurate. It also means that you won’t have to pay the developer for researching and learning new technologies. By contrast, a newer or less experienced firm might be guessing about what to charge, and that might mean a grossly imprecise quote.

This can come back and bite you during the middle of the project when the developer realizes the true scope of the project and tries to increase the bid they provided. They could do this by claiming that certain items in the project are “out of scope” and hence require an additional charge. Or they could start taking “short cuts” during development, thus reducing the overall quality of your product.

The Tools of the Trade

Another factor is whether a developer chooses to use a framework or third party tool for your job versus deciding to develop your application from scratch. For example, the developer may use an existing platform like WordPress or Magento to build your application, or they may use an existing framework like CakePHP or Microsoft.NET. They could also decide to use pre-existing modules or custom controls to help reduce programmer hours. Keep in mind, though, that for more complex application requirements, there may be an inherent danger whenever a developer relies on an existing tool: They may discover that the framework or tool isn’t flexible enough. At that point, the developer may need to abandon some or all of the work done. Consequently, your project’s cost could skyrocket.

Types of Web Development Companies

Price estimates will vary a lot depending on the size and location of companies that provide bids. A custom web development firm with employees based in the U.S. should cost considerably more than one with overseas workers. However, it can be very difficult to communicate with offshore companies because of the time difference, lack of fluency in English and understanding of American culture. This is especially true when you have to communicate with them over the phone to discuss important requirements when email or chat based communication does not suffice. These factors may delay projects and result in sub-par quality. Worse, offshore companies can sometimes be unethical and unscrupulous, and you could end up losing all of your money with no hope of retrieving it because of international legal jurisdictions.

You will also pay according to the prestige of a web application development company. Distinguished operations with hundreds of employees and grand office complexes charge the highest rates by far. Therefore, you could save plenty of money by opting for a leaner, more efficient midsize organization. A tiny and little-known outfit — maybe one comprised of two or three people — should be cheaper still. And independent contractors or freelancers are often the most inexpensive.


Generally speaking, you should disregard the highest and lowest bids you receive. Opt for a company that has demonstrated prior experience in the type of application you want built and the technologies needed to build it. And don’t forget to check references before you award your project. After all, you want to be confident that you’ll get high-quality work and that your project will be finished on time and on budget.

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