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no, it is not about 'you got what you paid for'.
website development quote is tricky.
1. if you hire freelancer or full-time employee:
for back-end (such as database development and coding): if you hire a developer located in USA, the hourly rate starts from $50 per hour. But if you hire a Indian or Russian developer located in India or Russia, the hourly rate is about $10-$15. From my experiences, Indian or Russian developers produce as good quality as a USA developer.
For front-end (such as graphic design in PhotoShop or static css/html coding): this is supposed to be cheaper than back-end because it does not involve technology that needs a strong technical foundation. However, graphic design pricing is very tricky. someone can learn PhotoShop within one month, then give you a piece of graphic that is bad taste, does not take into consideration of branding or at least perception because of color and typology. On the other hand, some graphic designers who have solid arts foundation doesn't have advertising background or sales personality and might produce something good looking but don't sell.
In addition, front-end design is a little bit like the price of a painting. It can be as little as $10 bucks or as much as $1 million, depending how designer perceives his/her own design.
Some designer (USA) might quote you $75 an hour, but give you something that you don't like or actually don't work at all, while some designers who quote $20 an hour might has the ability to produce an excellent work.
Note that with front-end design, it is your best bet NOT to hire offshore (Indian or Russian) because front-end design involves perception and English language. There is no way an Indian designer can give you the kind of color scheme US customers perceive as positive.
So my suggestion is:
for back-end design, check out elance.com. they have some offshore coders who bid on your project. You don't need to worry to get ripped off.
for front-end design, try to hire locally.
if you don't want to hire freelancers and want to hire a web development company, you might get fancy quotes. you don't necessarily get what you paid for. elance.com also have some web development companies that bid on projects. you might want to consider hire a project manager, someone who can bridge technical aspects and business aspects. usually a web development company is good at either front -end or back-end.
I agree to a large extent with MyCapital's response. One thing I want you to know though is that most web designer and web developer here in the US or oversee has one thing in common - they want your money! Well as much as there is nothing wrong with that, the burden to find who can actually do the job for you in the most cost effective way is still on you. I am a project manager and I work with a number of designers and developers who has done fantastic jobs for my clients. 99% of the time, anyone you give your web site job to will download a template and then modify it to suite your need. There is also absolutely nothing wrong with that as long as you get what you want. You dont really have to pay $75 an hour to get a good job but if I were you, I will be very careful with anyone offering $10 an hour.
If you let me know details of what you need, I may be able to help if I have done similar project in the past. You can reach me @ email@example.com If its a project my team of professionals can do, I can guarantee you satisfaction and most cost effect delivery.
I did an interview on my blog last month with Judy Schramm, CEO of ProResource LLC. ProResource specializes in teaching people how to get the most out of their outsourcing projects. She offers a free 10 day course on a couple of the different primary outsourcing needs including web design. Basically, you will receive an email a day talking about what you need to know to make your web design outsourcing project a success.
No, this isn't a shameless pitch. I am not affiliated with ProResource nor do I get any kind of kick backs from recommending them. Just though you might want to check them out to answer your question.
Hope this helps.
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