Web Developer Economics: The Wrapup

We started this series to get a look at the financial ins and outs of a web developer these days. Now we can wrap it all up by looking at the numbers all together.

We looked at:

• Monthly Service Costs
• One-off Software Costs
• Hardware Costs
• Poll on Earnings

Let’s assume a fresh start in independent web development. You’ll be purchasing all software and hardware needed (as laid out in the previous posts) and you have an average load of clients paying you (as sourced from the poll).

Incoming Money

At the time of this writing, here are the poll results for what CSS-Tricks readers are earning from building websites. The exact question was:

For those who build websites for clients: the average amount of money (USD) you personally earn from a completed website is closest to:

There is a very large (42%) contingent earning less than $1,000 per website. Another large contingent contingent (34%) earn between $1,000 and $2,000. 14% are between $3,000 and $5,000 and those left are up at the high end of the earnings spectrum.

This doesn’t tell the whole income story though of course, because it doesn’t factor in number of completed sites in a year. If you earn $1,000 per website and do 25 websites in a year, you’re earning more than someone who earns $20,000 per website and only does one. No surprise there.

If we multiply one per-website earning by the number of people earning that much, the curve² looks a lot different.

30,000  * 327   = 9,810,000
20,000  * 58    = 1,160,000
10,000  * 151   = 1,151,000
 5,000  * 360   = 1,800,000
 3,000  * 477   = 1,431,000
 2,000  * 620   = 1,240,000
 1,500  * 655   =   982,500
 1,000  * 711   =   711,000
   500  * 2,522 = 1,261,000

² 30,000 based on the rate of increase in the poll and the text “Over $20,000). 500 based on the rate on of decrease in the poll and the text “Under $1,000”.

There is a spike at the high end, but the rest of the curve is a lot flatter. I think this says something about the market. There is a pretty even distribution across the entire spectrum of earnings. We don’t have enough data to be absolutely conclusive, but I’d say based on this there is the most demand for very inexpensive websites. As you move up, there is less demand, but the higher rates make up for it.

To figure out the average, we can total up the dollars and divide by voters:

$19,546,500 ÷ 5,891 people = $3,318.03 average earnings per website.

That number matches up fairly well with the numbers Matt Mullenweg shared in the 2012 “State of the Word” address (talk, slides). With 27,000 responses, the average earnings for WordPress-based client work was $2,500 with the low end being $2,000 and the high end being $4,200.

For a different look at incoming money, we can also look at the ALA survey results for 2011:

The average there being about $50,000.

Costs the First Year

These costs are based entirely off my own, which as I mentioned in previous posts are somewhat “premium.” I have no doubt a more efficient/frugal/thrifty person could lower these costs significantly. I’d warn against being frugal at the cost of quality or efficiency though.

¹ $531.91 (monthly) ✕ 12

Costs in Subsequent Years

Theoretically the first year is the worst. But you don’t have to buy a computer every single year. Even I get an average of 2 years out of one and I suspect most people get more than that. You don’t need to upgrade Creative Suite every year. In fact I suspect I’d be just as efficient if I was still on CS2 or CS3 (yet here I am, at CS6). Subsequent years will have less costs than the first.

You will occasionally need new hardware though, and occasionally need to upgrade one-off software. I’d think subsequent year costs would hover around $8,000 on average.

Making it Work

Poverty in the U.S. in 2012 is defined as earning $11,170 or less.

At the average per-site earnings of $3,318.03 and first-year costs of $10,711.87, a person would need to complete and bill for seven websites ($23,226.21 billed, $12,514.34 earned) just to beat poverty. The second year, five websites.

To earn the average $50,000 at the average per-site earnings, a person would have to complete and bill for 18 websites, or 1.5 per month. At the low end ($500 per site), that would be 121 websites in a year, meaning completing and billing for over 2 websites every single week.

It gets a lot easier (seemingly) at the higher end of the spectrum when you think of a person completing a website every six months for $30,000 and hitting the average income.

Wrapup

I’d look at all the numbers here presented with a huge wheelbarrow of salt. Because:

• This wasn’t exactly scientific.
• It doesn’t take into account people at agencies or apps, which is a lot (majority?) very well.
• Anecdotally, most web developers I know aren’t struggling at all.

Still, pretty interesting stuff I think! I’d love to hear any final thoughts by those of you in this world and making it work (or struggling).