Charge for Upload Time

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califdon
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Re: Charge for Upload Time

Post by califdon »

I respectfully disagree with Benjamin. Our entire system of commerce is based on the value of anything to the buyer. If the buyer can find an equivalent product for a lower price elsewhere, he is free to do so, but the same product often has a different perceived value to different buyers. I don't find anything unethical about offering a product to different buyers at different prices. It is matching price and value. The exception is a commodity market, but I hope we don't consider our efforts as developers to be a commodity.
cadboury55
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Re: Charge for Upload Time

Post by cadboury55 »

I know what you're asking, then, but in general, you can charge to a project only the time you spend doing something that is necessary to do in order to achieve the project objectives. Normally that does not include learning time that the client can reasonably expect you to know, etc. (unless the project itself is a research project). So, if a project requires you to transfer files, that time would be legitimately charged to the project, but if you are just sitting there trying to figure out what to do next, it should not be. There are gray areas, to be sure, but that's where professional ethics comes in. At least, that's my take on it.
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califdon
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Re: Charge for Upload Time

Post by califdon »

cadboury55 wrote:I know what you're asking, then, but in general, you can charge to a project only the time you spend doing something that is necessary to do in order to achieve the project objectives. Normally that does not include learning time that the client can reasonably expect you to know, etc. (unless the project itself is a research project). So, if a project requires you to transfer files, that time would be legitimately charged to the project, but if you are just sitting there trying to figure out what to do next, it should not be. There are gray areas, to be sure, but that's where professional ethics comes in. At least, that's my take on it.
That is true if you are billing your time, and that is common for web developers, just keep in mind that you don't have to bill that way, you can give your client a fixed bid to accomplish a defined objective, say, development of an entire website with carefully written specifications. But I think we have assumed a time billing in this discussion, so that's only a small reminder.

So I agree with what you said about learning time, but that's different from whether you charge the same rate to all clients, which is the point Benjamin and I disagreed on. In practice, I doubt that much of this makes any difference, but certainly Benjamin is right to emphasize that professional ethics should be a major consideration.
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Re: Charge for Upload Time

Post by matthijs »

What is unethical about charging as much as you can for a service? What is unethical about trying to make a profit (as big as you can)?

Anyway, I think in the end the base question is: what is it exactly that you want to sell?
- do you sell "developer hours" (I am for rent!)
- do you sell "website XP200, website DR3000, webform T54, .." (I have these products to sell. Please buy them!)
- do you sell a service/provide value (I provide a valuable service. You pay me X and I make sure you get Y in value return and more)

It's up to everyone to decide which one. You could even combine them I guess.
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Benjamin
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Re: Charge for Upload Time

Post by Benjamin »

matthijs wrote:What is unethical about charging as much as you can for a service? What is unethical about trying to make a profit (as big as you can)?
Well that is a loaded question, so I stand by my original stance.

What is wrong with charging people $10 for a bottle of water after a storm and all utilities are out? What is wrong with charging a Mercedes owner more for gas than the owner of a Geo? What is wrong with charging more for a vacation or airline tickets if the user is using a more expensive type of computer?

What you are speaking of is not unheard of. You'll see branded and unbranded products that are identical being sold at different prices. You'll see identical services being sold by different people at different prices. That's a free market.

When you start classifying customers to determine how much you can bilk them out of however, you are on shady ground. I am not understanding the position a few of you are taking with this, how you can justify it?
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Re: Charge for Upload Time

Post by matthijs »

Well the thing is: I am not selling a commodity like gas. And certainly not selling bottled water in an emergency situation. I'm selling services in a free market. People are free to choose who to work with. They might choose to work with me because I'm such a nice guy. Or because I never miss a deadline. Etc. See my selling options in my previous post. It's your choice what you want to sell.

And I don't see the problem with differentiating between different customers. If a small non-profit comes to me for building and designing a blog, it's a different kind of value I sell them compared to when a big company comes to me for a similar kind of job. It's my choice to do this specific project for this client at this time. It's also a free choice of the specific customer if they want to go with me at the agreed conditions.

This kind of differentiating happens all the time in other businesses as well. Student discounts for products, lawyers offering lowers rates for people with less income, etc.

But again, it's your choice what to sell. Do you sell ready-made products, do you sell the hours you work, do you sell a service? If you sell ready-made products it probably isn't going to work to differentiate between customers (they are buying a commodity and expect exactly the same product and the same price). If you provide a service and sell value, it is possible to differentiate.
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califdon
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Re: Charge for Upload Time

Post by califdon »

This has developed into an interesting discussion. It is good to share viewpoints on a subject like this. I respect both sides of this discussion, but I do come down on the same side as mattijs, at the end of the day.
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Benjamin
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Re: Charge for Upload Time

Post by Benjamin »

I guess what I'm getting at here is if you have a base rate, there's nothing wrong with charging some clients less. It's charging certain clients more where I see the issue.
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califdon
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Re: Charge for Upload Time

Post by califdon »

Benjamin wrote:I guess what I'm getting at here is if you have a base rate, there's nothing wrong with charging some clients less. It's charging certain clients more where I see the issue.
If you have a published base rate, I'd agree with you; if you have an ad that says "Web Development: $75/hour" then you are surely obligated to not bill at a higher rate. But IMHO if you negotiate separately with each client, as I think most of us do (or did--I'm long since retired), then I view it as a classic free market negotiation: what are my services worth to you? I'm reasonably sure that my "mow-blow-and-go" gardener charges different customers differently. In some societies, bargaining is a core ritual of any purchasing. In the U.S., we are not as invested in this way of doing business, and I'm not arguing that we should adopt it, but I mention it merely as an example that ethics are what your culture says they are.
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Christopher
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Re: Charge for Upload Time

Post by Christopher »

A lively discussion about capitalism and ethics! My guess is that Don and Matthijs are more ethical than they let on, and that Benjamin will charge what the market will bear to a greater degree than he lets on.

I do know that there are some objective points about this subject. There is a cost below which contractors cannot continue to work (except perhaps "dumping" to gain market share for potential future profits) and a cost above which clients cannot afford. Between those two cost points is a gray area. I don't think any of us would overcharge a senile old wealthy person who has the delusion of needing a website about her cat. But it does raise the interesting question when dealing with businesses whose owners a quite competent. It seems that it is just as ethical for a contractor to try to charge in the upper end of that gray area, as it is for a client to attempt to only pay toward the low end of that gray area. That is the essence of how prices are set.

This gets to Benjamin's point: if you have a base rate and you have customers willing to pay more than that rate -- it seems like you should raise your base rate. They obviously value you more than you do. You can always discount, but finding your value seems an important of being in business.
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matthijs
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Re: Charge for Upload Time

Post by matthijs »

Benjamin wrote:I guess what I'm getting at here is if you have a base rate, there's nothing wrong with charging some clients less. It's charging certain clients more where I see the issue.
This is indeed a legitimate choice you can make. You choose to rent yourself for a certain rate. That's you business model. People can hire you for $ X/hour. That's fine. And in that case, I can see how it feels wrong to charge more for client A just because he is richer.

However, there are other business models. And one can choose to go with those as well. I have used and still use different ones at the same time. Sometimes a client wants to have me work with them on site. So we work out a certain rate and I'll be there, in the office, doing stuff and getting paid $x/hr. (that rate might differ, depending on things like how busy I am or how important the job is). Other times someone approaches me and wants to build me a website. Then in the discovery process I will figure out what I can provide the client (how much value!) and I will charge for that. So that means it might differ between client A and B.

A few practical problems I have with charging purely based on hourly rate:
- For many clients, an hourly rate has little meaning. They want a website or something else build. They might have a certain budget in mind. Or not. What they are interested in is what value I can provide them. How will the website I build for them make them money? How will I work together with them in the process, how smooth will everything go? Hourly rates just don't fit in too well. For some clients $30/hr seems too much. For others $70/hr too little.
- I'm trying to compete in the market on value I provide, not on price. The webdesign/development business certainly is no easy market. Anyone with a computer and internetconnection can start a competing business. If I try to compete on price I might as well stop right away. No chance of winning from students working from home or developers from Pakistan working for $10/hr.

So talking about ethics, I don't see anything wrong with charging what you want in the way you want, as long as a client voluntary agrees to everything, fully aware what he pays and - more importantly - what he gets. I'm not a bankster deceiving a poor customer with tiny small print and hidden costs in a mortgadge contract :)

And there's even the (ethical?) question about our own market: if we all compete eachother purely on price, what are we doing to each other? Lower our rates until we barely make enough to survive?
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califdon
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Re: Charge for Upload Time

Post by califdon »

@Jonah: See what you started with a simple question about charging for upload time?!! :D This bunch is not afraid to voice its opinions! (And I'm sure glad it's not.)
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Bill H
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Re: Charge for Upload Time

Post by Bill H »

There was an editorial in the San Diego Union-Tribune after a hurricane in Texas, written by a professor at UCSD, saying that profiteering in disaster areas should be legal, otherwise people who had emergency supplies would not be willing to travel to the disaster areas and sell those supplies - the profit would be insufficient. No, I am not kidding. Not only did the dimwit UCSD prof write that inanity, the Union-Tribune printed it as an op-Ed. Sheesh.
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califdon
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Re: Charge for Upload Time

Post by califdon »

I'm not so sure that profiteering in a disaster area should be illegal, Bill. Immoral, yes, but the problem with illegal is that somebody has to decide where to draw the line. If somebody charges a little more because of the cost of transportation, it may be reasonable, but how much more before it is judged to be illegal? And who gets to make that call? But I get your point and have the same repugnance of the guy who profits from the misfortune of others as you do.

[San Diego rules!! (I was born and raised there)]
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Jonah Bron
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Re: Charge for Upload Time

Post by Jonah Bron »

Indeed, this is quite an interesting discussion. Well said, Christopher.
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