What exactly are you paying for when you buy a website?

A website has three main components: software, design and content. For the software component, when compared to other forms of software, it turns out that what we end up paying for and the value we get does not stack up.

The cost we pay and the value we get is largely driven by our understanding of what we are buying when we pay for a website. This is built on a misconception driven by the web developer community, fueled by publications targeting internet users.

Research shows that most businesses believe that they will need to pay between $5,000 - $12,000 to get a reasonable to high quality website. But what does the average business person believe that this buys?

From a software standpoint, for this money, most companies expect to get some sort of e-commerce functionality (i.e. the ability to sell products online via a shopping cart) and at least some type of content management system (i.e. the ability to edit the content on some or all of the website's pages). They expect that this website would be custom built for them by the web developer, who would also create the website's design and write some or all of the content for the web pages - even if that content is largely based on supplied material.

Taking out the design and the content portion of the work, this would equate to around $2,500 - $8,000 for just the software programming for this website.

But let us consider other software pricing to see if this is a reasonable charge.

An MYOB accounting system costs around $500 - and one would need to work hard to justify a budget of more than $1500 on an accounting system for a small to medium sized business. Now consider this: how long did MYOB take to develop? Over how many years? How many millions did its development cost?

The latest version of Microsoft's Windows operating system costs up to around $1000 - and I can hear some of you thinking that this is highway robbery. But again, ponder on how much time and money has gone into this product's development.

So how can a web developer justify the cost of their software? Surely they aren't comparing it with the functionality or share size of the development of either MYOB or Windows Vista! So how come it is up to 10 times more expensive than these other common business solutions?

The usual answer is that websites are custom built for each individual company. So are they telling us that the e-commerce and content management needs of each company is so massively different that it must be custom built each time?

Is changing a one set of text so different from changing another set of text? If so how do word processing programs like Microsoft Word manage to cope?

Does one product vary so much from another product that the system enabling someone to buy it via a website need to vary so much that a programmer must be employed to build a different solution just for your products? Then how can commercial Point of Sale systems deal with this problem?

The obvious answer is that, apart from a website's design and its content, the underlying software does not need any customization. What is more, if you dig a little below the surface of most websites you will find that they all sit on some common content management system and/or e-commerce platform.

These systems, much like ordinary software may have cost hundreds of thousands or even millions of dollars to develop, but are on sold to web developers for next to nothing. In fact, many are given away to web designers free of charge to pick up part of the hosting fees for the website.

So how can a web designer or developer justify their charge of $5,000 - $12,000 for a website and suggest that paying less than this will buy you an inferior product?

Next time you buy a website, make sure that your web designer itemizes their budget detailing how much it is costing you for software, design and content. Then you can judge for yourself if you are getting the best deal or not. Remember, if Microsoft can afford to charge less than $1000 for Vista, should you be paying more for the software behind your website?