How to overcome inflation in E-commerce and rising prices for software development?
Global inflation has risen from 4.7 percent in 2021 to 8.8 percent in 2022. And is now significantly impacting the development costs and required budget for online start-ups relying on the services of freelance developers to (re-)develop their new online solution.
Whereas two years ago, the required budget for hiring 1 junior and 1 senior freelance .NET developer mounted up to €30.000,- per month. Now, the actual costs for hiring a freelance developer in our Western world easily exceed €35.000.
So how to deal with these rising costs and survive as an online entrepreneur during these challenging economic times?
Start working in the mix with local and remote software developers from countries like India
Hiring a remote developer from developing economies like India can offer relief. In these countries an ever improving education sector is producing more IT talents than the number of jobs created by a still maturing economy. Whereas local competition keeps their salaries extremely competitive. In addition, power currencies like the USD and the Euro create extra purchasing power for us Western countries. And make it possible to hire the best and multiple developers for the same price you would pay to hire one locally.
Whereas hiring 2 juniors, 1 medior, 1 senior freelance .NET developer and 1 tester now costs around €70.000 per month in our Western world. Hiring the same number of developers in developing countries such as India will only cost you around €25.000. Which comes down to a third of the required budget and cost savings of around 65%!
Cost savings that can quickly add up to sizeable budgets, as the following two real-life examples show:
Example 1:
In the first example you see the initial cost calculation one of our clients made about a year ago based on hiring 5 Dutch Freelancers for a period of 6 months:
| # Developers | Level | Hourly rates | Monthly costs |
| 2 | Junior | € 65.00 | € 22,620 |
| 1 | Medior | € 80.00 | € 13,920 |
| 1 | Senior | € 110.00 | € 19,140 |
| 1 | Tester | € 75.00 | € 13,050 |
| Total per month | € 68,730 | ||
| Project total | € 412,380 | ||
Example 2:
In the second example you see the alternative project calculation we were able to offer this Start-up based on hiring 5 Indian Remote Sofware Developers for the same period:
| # Developers | Level | Hourly rates | Monthly costs |
| 2 | Junior | € 17.50 | € 6,090 |
| 1 | Medior | € 25.00 | € 4,350 |
| 1 | Senior | € 35.00 | € 6,090 |
| 1 | Tester | € 25.00 | € 4,350 |
| Total per month | € 25,013 | ||
| Project total | € 150,075 | ||
As this example shows, just by hiring Indian instead of Dutch freelance developers, this client was able to save almost two third of his budget. And a dazzling amount of over €260,000 in 6 months time!
Ensure a successful collaboration
At the same time, after 15 years and like many others, we also learned that collaborating remotely with Indian Developers can be quit challenging. Due to the physical distance, time differences, different language and cultural diferences.
Therefore, we chose to do things a little differently at WeSquare, and started to pay extra attention to the collaboration itself: To train Indian developers how to collaborate effectively with Western Start-ups from a distance. And to train start-ups how to collaborate successfully with Indian remote developers. On top of that, we started to add Dutch resources to the remote development teams we assemble for our clients. In case a client has none or too little prior experience collaborating with and managing remote developers.
And with success! Last week we already welcomed the 7th start-up company to assist in realizing its dream and all of its online ambitions during these challenging economic times.
Contact us for concrete examples and practical tips
So, if you too have any plans for starting-up an online bussiness during these challenging economic times, don’t hesitate to contact us. As we will be happy to share lots of concrete examples and valuable experiences on the do’s and do not’s with regards to collaborating with remote developers. As well as practical tips on how to ensure a succesfull collaboration with remote developers from India. Visit this page, or contact us for more practical information on collaborating with Indian remote developers.