Why are clients shocked by the price for web development?

The average small business needs a website with their hours, phone number, some pictures, and maybe a blog that they'll never actually update, but they don't really know the difference between paying someone to set up wordpress and paying someone to build a bespoke web application.

The only reason the majority of small businesses think they need custom functionality is because they don't know enough to know what they're really trying to do. Try to listen to what the client wants to accomplish, not how they want to accomplish it, and see if you can come up with an off the shelf solution to their problems (or refer them to someone else who can).

Think about all those times someone on stackoverflow asks how to do something in a really roundabout way that seems wrong. The first question you ask is "what are you trying to accomplish?" Most of the time there is a simpler way to do it.

Edit:

[1] When I say wordpress, I mean wordpress/drupal/cushycms not just wordpress. Basically anything where you're not charging the client to build a custom blog/CMS engine, or charging $2k for a custom design.

Many of the software products, proprietary or open source offer massive functionality for very low cost but this is of course because the development costs have been aggregated across many customers.

For example , I was asked to build an online customer management system for someone on a budget. So I googled around for open source solutions to the problem , found a few that fitted their requirements and showed them to the client.

Once they found one they liked, I FTPd the PHP upto their server, setup mysql and did the basic configuration for them. I then pointed them to the URL for the system, gave them some basic instruction and charged them $25 for the hour.

They were over the moon with that, since it was so quick and cheap.

Of course later they come back and say "hmm, this system is good but I wish there was an extra field here that did this and this part should work slightly differently".

So I said "hmm, ok. This is probably 5 hours work so except to pay around $125". At which point they said "What?! This is just a few small changes, how come the price is so much higher?! The system is open source, so you can just make these changes easily". This then puts you on the defensive as you have to justify that in fact to do these changes will involve reading a ton of someone elses code , finding the correct places to change things and testing that everything won't break.

Now , if they had paid $1000 for the original system (probably a fair price for the amount of actual functionality it enabled for them) then the $125 would look more reasonable.

The amount of value that they gained for the $25 was so high that you have their expectations have been set unreasonably high.