Unrealistic Project Proposals in E-Commerce: Why Lower Prices Are Rarely the Better Choice

Anyone who issues a tender for an e-commerce project regularly receives proposals whose price ranges seem inexplicable. For ostensibly identical requirements, the calculated budgets sometimes differ by a factor of three or four. One proposal quotes 80,000 euros, another 320,000 euros, and both claim to implement the same platform, deliver the same functionality, and meet the same timeline.

This experience is not an exception. It has become the rule. The reasons for this lie deeper than differences in daily rates or efficiency. They lie in the structural dynamics of a market in which short-term deal success is often rewarded more strongly than long-term project stability.

This article analyses why unrealistic project proposals are not a marginal phenomenon but a systemic problem. It describes the mechanisms that create and sustain this behaviour. And it offers guidance for merchants facing the task of making an informed selection from a multitude of proposals.

The Normality of Extreme Price Differences

An e-commerce project is not a standardised product. It is an undertaking whose scope, complexity, and risks depend on a multitude of factors that are often still unknown at the time of proposal submission. The question of what a relaunch costs is therefore similarly meaningful as the question of what a house costs. The answer depends on which house, in which location, with which materials, for which use.

In e-commerce, this problem is amplified by several factors. The technical landscape is fragmented. Requirements differ from company to company. Internal prerequisites on the merchant side vary considerably. And the quality of requirements documentation, if it exists at all, fluctuates significantly.

When a merchant invites three agencies to submit proposals for the same relaunch, they actually receive three proposals for three different interpretations of what this relaunch might mean. The agency with the lowest price may have understood a leaner solution. Or they have not priced in risks. Or they have consciously calculated that additional work can be renegotiated later. The most expensive agency may have over-dimensioned. Or they have included experience values that are more realistic. Or they have less utilisation pressure and calculate more conservatively.

Without deeper analysis, the merchant cannot discern which of these assumptions is correct.

The Illusion of Price Certainty

Many proposals are presented as fixed prices. The term suggests security. It conveys that the stated amount will be the final amount. That all eventualities have been considered. That no unpleasant surprises await.

This security is in most cases an illusion. Fixed prices in e-commerce projects are based on assumptions about the quality of existing data, about the availability of internal resources, about the stability of requirements, about the complexity of interfaces, and about the customer's decision-making speed.

If these assumptions are not explicitly documented, the fixed price is not a guarantee but an optimism scenario. Reality then manifests in change requests. In supplements. In postponements of the go-live date. In discussions about what was included in the original scope and what was not.

A serious calculation would need to state ranges. It would need to make uncertainties transparent. It would need to disclose which assumptions underlie the price and what happens if these assumptions prove wrong. However, such transparency is unattractive in the acquisition process. It appears less decisive. It gives the competitor who quotes clear figures a psychological advantage.

Thus a market emerges in which many providers quote prices they do not consider realistic themselves. And merchants choose proposals whose attractiveness is based on assumptions that no one has verified.

Commercial Pressure on Agencies

Agencies operate under considerable economic pressure. Their most important metric is utilisation. Employees who are not working on projects cost money without return. The larger the agency, the stronger this pressure. A team of twenty developers generates ongoing costs that must be serviced, regardless of whether projects are available or not.

This pressure creates incentives that do not always align with the customer's interest. A proposal that secures the contract is more valuable in the short term than a proposal that calculates realistically but does not lead to an award. The consequences of overly optimistic calculation only become apparent months later, when the project is already running. Then renegotiations are possible, escalations common, and the original price difference to the next best proposal long forgotten.

For agency leadership, a dilemma emerges. Serious calculation leads to higher prices. Higher prices lead to fewer won tenders. Fewer won tenders lead to underutilisation. Underutilisation threatens economic stability. Aggressive calculation appears as a rational strategy, even if it damages customer relationships in the long term.

This mechanism is reinforced by the structure of many selection processes. When merchants primarily compare by price, when procurement departments specify budgets based on market research that itself reflects aggressive proposals, then price competition becomes the dominant dynamic.

The Assembly Line Logic of Project Work

Many agencies have optimised their internal processes for efficiency. This sounds positive at first. However, efficiency often means standardisation. Standardisation means that projects are pressed into predefined frameworks. That the same solution approaches are applied to different problems. That individual requirements are treated as deviations that cause additional costs.

This logic is understandable from a business perspective. It enables faster project completion, deployment of junior staff, higher margins. However, it also means that the specific needs of the individual merchant fade into the background. That consulting is replaced by execution. That questions about why are asked less frequently than questions about how.

For merchants, this dynamic is difficult to detect. A well-structured proposal, a professional presentation, competent-seeming contacts can create the impression that deep understanding of one's situation exists here. Whether this understanding is actually implemented in project work only becomes apparent once contracts are signed.

The Role of Software Vendors

E-commerce platforms are shaped not only by merchants and agencies. The software vendors themselves play an important role in market dynamics. Their partner programmes define which agencies may act as certified implementation partners. Their metrics determine which partners receive preferential recommendations. Their incentive structures influence how partners calculate and sell.

Many partner programmes reward licence volume. Agencies that sell more licences advance in partner levels. Higher partner levels bring advantages: better commissions, earlier product information, preferred leads. This structure creates incentives to win projects, regardless of whether the proposed project actually fits the customer.

The quality of implementation, customer satisfaction, the long-term success of the project often do not flow into these metrics, or only indirectly. A partner who acquires ten projects, of which three fail, will rank higher than a partner who acquires five projects, all of which succeed. Short-term deal orientation is systemically reinforced.

For merchants, this means that the partners recommended by the software vendor are not automatically the best partners. They are the partners who sell the most. That is not the same thing.

Short-term Deal Success Versus Long-term Customer Success

The fundamental tension in this market lies in the conflict between deal success and customer success. A proposal that wins the contract is successful for the agency in the short term. A project that works sustainably is successful for the merchant in the long term. These two goals are not congruent.

A realistic proposal that deals honestly with uncertainties may lose against a more optimistic proposal. A partner who asks critical questions and points out risks may appear less decisive than a partner who promises solutions. A project that starts more slowly because fundamentals are clarified first may appear inefficient compared to a project that begins implementation immediately.

Market mechanisms reward speed, decisiveness, and attractive prices. They penalise caution, transparency, and realistic assessments. This dynamic is difficult to break as long as merchants do not adapt their selection processes accordingly.

Distrust of the Most Expensive Proposal

A common reaction to extreme price differences is distrust of the most expensive proposal. If one agency charges three times as much as another, they must either be overpriced or have understood something completely different. Both appear problematic.

This reaction is psychologically understandable but not always rational. The most expensive proposal can be overpriced. But it can also be the most realistic. It may contain experience values that other providers do not have. It may price in risks that other providers ignore. It may reflect quality standards that other providers do not aspire to.

The difficulty lies in recognising these differences without deep specialist knowledge. A merchant conducting an e-commerce project for the first time cannot assess the appropriateness of effort estimates. They cannot evaluate whether the stated daily rates are market standard, whether the planned phases are realistic, whether the team composition makes sense.

The cheaper proposal appears safer because it requires less capital investment. This security is deceptive, however. The actual capital investment only becomes apparent at the end of the project, not at the beginning.

Marketing Instead of Substance

Many proposals and presentations invest considerable resources in external presentation: high-quality slides, impressive references, and convincing formulations. This professionalism conveys competence. However, it says little about what will actually happen in the project.

The ability to present well does not necessarily correlate with the ability to implement well. The teams that appear in the pitch are not always the teams that later work on the project. The promises made in sales are not always the reality experienced in implementation.

For merchants, it is difficult to see behind the surface. The questions that really matter are rarely asked in presentations. How does the partner deal with unexpected problems. What does actual communication look like in project day-to-day. How are conflicts resolved. How honestly are mistakes handled. These aspects only emerge in collaboration.

The Shifting of Uncertainty to Later Phases

A common strategy for offering attractive prices is not to clarify uncertainties in the proposal but to shift them to later project phases. The proposal is based on a best-case scenario. Deviations are treated as change requests. Clarification of open questions occurs not before contract signing but afterwards.

For the merchant, the proposal initially appears clear and binding. Complexity only becomes apparent when the project is running. By then, contracts are signed. Budgets are approved. Switching to another partner is costly and difficult. The merchant's negotiating position has fundamentally deteriorated.

This strategy is not always conscious deception. Sometimes it results from time pressure in proposal preparation. Sometimes it results from optimism. Sometimes it results from lack of experience. However, the outcome for the merchant is the same regardless of intent: higher costs, longer timelines, frustration.

The Context-Dependency of E-Commerce Projects

E-commerce projects are context-dependent to a degree that is frequently underestimated. Implementation of the same platform can proceed smoothly for one merchant and fail for another. The differences lie not in the technology but in the surrounding conditions.

The quality of existing product data determines the effort for data migration. The complexity of the existing system landscape determines the effort for integrations. The decision-making culture in the company determines project speed. The availability of internal resources determines how much work the external partner must take on. The clarity of strategic objectives determines whether the project has a clear goal or must navigate between contradictory requirements.

These factors are often not captured in standardised tenders. The agency receives a requirements catalogue that describes functions but not the reality behind them. They must make assumptions to calculate. And they will make those assumptions that enable a competitive proposal.

The Risks of Under-Dimensioned Proposals

A proposal that is calculated too cheaply leads to a project under pressure. The agency will try to save the margin. That means leaner teams. That means fewer seniors. That means less time for quality assurance. That means more standard solutions, less individual adaptation.

The consequences do not show immediately. They show when the system needs to scale and does not scale. They show when changes become more expensive than planned. They show when performance drops. They show when support encounters problems that should not exist.

An e-commerce system is not a one-time purchase. It is infrastructure that is operated, maintained, and developed over years. The decisions made in initial implementation determine costs and possibilities for years. A cheaply implemented system that is difficult to maintain will ultimately cost more than a more expensively implemented system that is robust and extensible.

Projects Do Not End at Go-Live

A widespread misconception is viewing go-live as the project end. In reality, go-live is the beginning of a new phase in which the system must be operated, monitored, updated, and adapted to changing requirements.

This phase after go-live is neglected in many proposals. Calculation focuses on implementation. Questions of how the system will be operated, who is responsible for maintenance, how quickly problems can be addressed, are pushed into the background.

For merchants, this neglect can prove expensive. A system that is difficult to maintain causes higher ongoing costs. A system whose documentation is incomplete makes vendor switching difficult. A system based on individual customisations that only the original implementer understands creates dependencies.

How Merchants Can Make Better Decisions

The situation is not hopeless. Merchants can design their selection processes to at least partially compensate for the problems described. The key lies in shifting focus from pure price consideration to a more comprehensive assessment.

Examining the Information Base

A serious proposal is based on substantial information. If an agency submits a binding proposal without having understood the existing system landscape, without having spoken with relevant stakeholders, without having checked data quality, then this proposal is based on assumptions, not knowledge.

The question of how much time the provider has invested in understanding the starting situation is a quality indicator. An agency that quotes a fixed price after a one-hour briefing is acting either negligently or consciously optimistically. An agency that first proposes an analysis phase before committing to a price acts more professionally, even if that initially appears less convenient.

Evaluating Workshops and Scoping Phases

Many agencies offer paid workshops or scoping phases before submitting a binding project proposal. These phases can be valuable. But they can also primarily serve sales purposes.

The distinction lies in substance. A sales-oriented workshop focuses on making the project appear attractive. It produces slides and visions. It creates enthusiasm. An advisory-oriented workshop focuses on understanding actual challenges. It asks uncomfortable questions. It identifies risks. It produces not quick answers but founded analyses.

Merchants should critically examine what they receive for their investment. A workshop consisting primarily of agency presentations is less valuable than a workshop consisting primarily of analysis of the customer situation.

Questions That Reveal Assumptions

The most important questions in the selection process are those that make assumptions visible. On which assumptions is this calculation based. What happens if these assumptions prove wrong. Which risks are priced in, which are not. Where lie the greatest uncertainties. What are the experience values from comparable projects.

An agency that answers these questions openly and differentially demonstrates professionalism. An agency that evades, simplifies, or gives guarantees it cannot keep should be viewed critically.

Transparency as a Quality Indicator

Paradoxically, uncertainty that is openly communicated is a positive signal. An agency that says certain aspects are still unclear and can only be concretised during the project is more honest than an agency that claims everything is already understood and secured.

This transparency initially appears as weakness. However, it is a sign of experience. Experienced project managers know that surprises are inevitable. They know that plans change. They know that reality is more complex than any proposal can capture. This honesty is not uncertainty but realism.

Comparison Beyond Price

Price is one factor among many. A systematic comparison should consider further dimensions. Demonstrated experience in comparable projects. The quality of references and the possibility of speaking with reference customers. Team composition and seniority of designated staff. Methodology and approach to risks. Contract design and handling of changes. The long-term perspective and ability to support the system after go-live.

A proposal that convinces on these criteria justifies a higher price. A proposal that only convinces on price is a risk.

Responsibility Rather Than Deal Logic

The actual conflict in this market is not between expensive and cheap proposals. It is the conflict between responsibility logic and deal logic. Responsibility logic asks what the project truly needs, what risks exist, how success can be achieved sustainably. Deal logic asks how the contract can be won.

Both logics can lead to an award. But only one leads to sustainable project success. The task for merchants is to identify partners who follow responsibility logic, even if their proposals appear less attractive at first glance.

Honest proposals make uncertainty visible instead of hiding it. They state ranges instead of point estimates. They name risks instead of ignoring them. They ask questions instead of prescribing answers. They invest time in understanding rather than in persuasion.

Concluding Remarks

Project reliability does not emerge from optimism, attractive prices, or convincing presentations. It emerges from clarity about the starting situation, from a realistic assessment of challenges, from experience in dealing with complexity, and from the willingness to address uncomfortable truths early rather than shifting them to later project phases.

Selecting an e-commerce partner is not a price negotiation. It is a decision about the robustness of an undertaking that will form the business foundation for years. The cheapest option is rarely the safest. The most expensive is not automatically the best. The right choice requires willingness to look beyond the surface, to ask uncomfortable questions, and to value transparency more highly than certainty.

Those seeking a partner who provides easy answers will find one. Those seeking a partner who develops viable solutions must look more closely.

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