You Get What You Pay For


Article by Robert Farris

A patient goes to a dentist with a terrible toothache and would do anything to have it fixed.

Patient: How much to have this tooth pulled?
Dentist: $190.00, and it will take just a few minutes.
Patient: $190.00 for just a few minutes work???
Dentist: I can extract it very slowly if you like.

According to data collected by ActivMedia's annual study of electronic commerce; website development costs have grown into a $10+ billion industry. While online revenues reached $95 billion in 1999, they are also expected to reach $226 Billion in 2000.

  • The average budgeted investment for e-commerce website development in 1999 across all websites was about $37,000.
  • Business-to-consumer (B2C) operations that sell exclusively through the Internet; budgeted an average of $68,000.
  • Typical retail and business-to-business (B2B) site expenditures were in the upper $20,000's.

According to this study, online growth is exploding particularly among mid-range and smaller online operations, as companies gear up to meet anticipated demand: "Internet-generated revenues in 2000 will reach $226 billion, nearly six times the $38 billion observed in 1998. Typical growth rates for many mid-range players are even higher, and some companies will experience online revenue growth of over 2000%!”

Naturally, e-commerce programs that see growth rates that are higher than average are going to budget more for website development today; in order to handle the expected future business. These companies understand that with a successful online presence will create the leading companies of the new century.

Additional points to analyze:

  • This year, European websites committed to spending better than twice as much per website on development costs than what is to be spent in North America ($77K vs. 34K).
  • Websites anticipating profitability in two to five years had far higher development budgets than web sites that were already profitable or expecting profitability in the near term (averaging $59K vs. $26K).
  • E-commerce revenues, aggressive promotional plans, and length of online experience correlate with larger web site budget levels. Website development budgets for 1999 were skewed upward for firms with larger promotional budgets, larger revenues, a greater number of registered domain names, and total staff sizes greater than 100.

Mortgage companies need to have a firm and clear financial commitment to budget their web site development. Your corporate web site needs to look as good (or better) than E-Loan, IF you want to compete with E-Loan.

A patient goes to a doctor with a stomachache; finds out that he needs to have his appendix removed.

Patient: Doctor how long will it take and how much will it cost?
Doctor: About 1 hour and $10,000.
Patient: $10,000 for 60 minutes worth of work????
Doctor: Yes, it is a basic procedure. I could even show you how to remove an appendix in one hour... but it would take me 10 years to teach you what to do if something goes wrong.

And in closing, there is a web development adage; with top quality web design, you always get what you pay for.

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Robert Farris is one of the co-founders of, a leading mortgage lead generation provider to corporate clients. They currently provide thousands of highly targeted Internet mortgage leads on a nationwide basis. The company can be reached online at:

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