Up-charge aka Price Gouging

For those of you that know me, you know that I believe in being very open and honest with people, in both my personal life and in business. I am also not afraid to speak my mind, especially when it comes to something I am very passionate about.

The same belief is carried over to my business. Delaware 302 is built on both honesty, and offering affordable solutions to our clients. We set our prices lower than the competition because our business is about helping businesses grow, not how much money we can make. We also never charge our clients something they don’t need. Not every technology company has these same beliefs though.

What many people don’t know, is that my company is also the development arm for numerous technology companies here in Delaware. To date, we have 4 that we work with on a fairly regular basis to build web sites and applications, host, and create graphic designs for. This is actually a fairly common practice when a technology company doesn’t have the staff or resources to handle the work.

This has led to numerous challenges that we have had to address, the primary of which is maintaining the illusion of being the technology company that the contract was signed under. The other one, which is the focus of this post, is pricing.

As I said in my opening, not every technology company has the same beliefs as we do. We have watched in disbelief as companies we did business with in the past took our project scopes and quotes, and up-charged the work as much as 115%. I will point out I did say DID work with. We no longer do business with these companies because of their practices, and insane price gouging to make as much money as they can from each bid.

It is the client that ultimately suffers from this practice that has no rules or regulations in place to stop it. Web site solutions, and the prices charged, seem to be at the complete whim of the company quoting the build. The type of client, and the perceived revenue stream they have also comes into play. Many technology companies charge more if the potential client is a well know store, law firm, or financial company, compared to a local mom and pop shop or a start up.

To drive my point home on this, I will share with you a recent project we quoted for another technology company. The client is a fairly well known company with locations in both Delaware and Maryland, and they wanted a new web site. I was invited to attend the meeting with the client’s marketing person, and she came to the meeting prepared with research she had done on their competitor’s web sites, and a wish list for the new site based upon this.

Armed with her research and wish list, we scoped out the project, calculated in the needed custom development, and wrote up a quote. We then sent the quote over to the technology company we were working with, so they could work it into their proposal. About 2 weeks later the owner of the technology company called and said the client had some sticker shock, and asked if we could cut our prices on the project. I came to find out shortly after that call, that they tacked on almost $11,000 to my quote.

I was in shock when I found this out. Who in their right mind would up-charge 115% on a site build when they are doing absolutely nothing, except generating a contract. Then have the brass ones to call me and ask me to cut my prices on top of it.

No wonder companies have such a bad taste left in their mouth when dealing with technology companies like this.

At Delaware 302, we strive to be different. We charge the same for our solutions no matter who the client is, without any up-charges. We also offer the same level of exceptional service to all of our clients.

If you are ready for a change, contact us and let us help you build a solution that works for you.

Let’s build the future together.

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About delaware302
Delaware 302 is more than an online clothing store. It's about giving Delawareans a way to express their pride about being from, or even just living in, the First State. Whether you're wearing it or displaying it on your vehicle - let the world see you are Delaware proud. But you don't have to be born here to "represent" the 302.

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