Web Design Cost Breakdown: Where Does Your Money Go?
When an agency quotes $25,000 for a website and a freelancer quotes $5,000, where's the difference going? This breakdown reveals exactly what you're paying for—and what's just overhead.
The Key Insight
At most web design agencies, only 30-45% of what you pay goes to actual design and development work. The rest covers overhead, management, and profit margins. With a freelancer, 80-90% of your budget goes directly to the work.
What Are You Paying For at an Agency?
When you hire an agency, your project budget gets divided across many cost centers before any actual design work happens:
Office Space & Utilities
Rent, electricity, internet, furniture in prime locations
Account Managers
Dedicated staff to manage client communication
Project Managers
Coordination and scheduling across team members
HR & Administration
Hiring, benefits administration, payroll
Marketing & Sales
The cost to acquire you as a client
Profit Margin
Returns for owners and stakeholders
The Math on a $25,000 Agency Project
Marketing & Sales
$5,000 (20%)
Account Management
$3,000 (12%)
Project Management
$2,500 (10%)
Office & Admin
$2,500 (10%)
Profit Margin
$5,000 (20%)
Actual Design/Dev Work
$7,000 (28%)
Where Freelancer Money Goes
With a freelancer, the math is dramatically different:
The Math on a $5,000 Freelancer Project
Software & Tools
$200 (4%)
Business Overhead
$300 (6%)
Actual Design/Dev Work
$4,500 (90%)
That $4,500 of actual work from a freelancer is comparable to the $7,000 in actual work from the $25,000 agency quote. The freelancer simply has less overhead extracting value from your budget.
2025 Pricing by Project Type
Here's what you can expect to pay for different types of web projects:
Landing Page (1-3 pages)
Freelancer Range
$1,500 - $4,000
Agency Range
$5,000 - $15,000
Savings with freelancer: $3,500 - $11,000
Business Website (5-15 pages)
Freelancer Range
$3,000 - $10,000
Agency Range
$15,000 - $50,000
Savings with freelancer: $12,000 - $40,000
E-Commerce Website
Freelancer Range
$5,000 - $20,000
Agency Range
$25,000 - $100,000
Savings with freelancer: $20,000 - $80,000
Custom Web Application
Freelancer Range
$10,000 - $40,000
Agency Range
$50,000 - $200,000
Savings with freelancer: $40,000 - $160,000
Hidden Costs to Watch For
Agency Hidden Costs
- Change request fees ($100-200/hr)
- Mandatory retainer contracts
- Hosting on proprietary platforms
- Content migration fees
- "Discovery phase" charges
Freelancer Transparency
- Clear hourly rate ($150/hr)
- Minor changes included
- You own everything
- No lock-in contracts
- Flexible hosting options
Making the Right Decision for Your Budget
If your budget is under $15,000, an agency will likely deliver a scaled-down project with corners cut to fit their overhead. A freelancer can deliver a complete, high-quality solution.
If your budget is $15,000-$50,000, you're in the sweet spot where a skilled freelancer can build something exceptional, while an agency might deliver something comparable at the high end of their range.
If your budget exceeds $50,000, you may benefit from an agency's structured processes for very large projects—but consider that multiple freelancers or a small studio might offer better value.
The Bottom Line
When you hire an agency, you're funding a business model with significant overhead. When you hire a freelancer, you're paying for skill and time with minimal overhead.
For most small and medium businesses, the math strongly favors working with a skilled freelancer. You get more design and development for every dollar spent, direct communication with the person doing the work, and flexibility that agency processes can't match.
Get Transparent Pricing
I charge $150/hr with no hidden fees, no account managers, and no overhead eating into your budget. Get a detailed quote for your project.