Which is the Best Way to go for Web Development Projects? Fixed Price or Hourly Rate?

Thu, 03.03.2022
Mohsinali Chidi
Co-Founder & COO
What is the Best Approach to Charge Web Development Agencies Hourly or Fixed Cost

Outsourcing the website demands cohesive decision-making, and one of them is deciding the pricing model while hiring a web development agency. Several clients are curious to explore the cost of developing a software application or a web portal. While aiming to obtain a defined set of budgets, they are often confused with selecting a pricing model. 

Do you want to pay at a fixed rate or an hourly one? In the realm of web development, the pricing model essentially plays a significant role. It lies on the web development agency to decide how they will receive payment for the services they offer. 

Here in this blog post, let us explore the realm of pricing models, unfolding the two prominent modes of payment, fixed price and hourly rate, while helping you make the best choice to hire skilled developers or a professional web development agency.

Unfolding the Pricing Models for Your Web Development Projects

Fixed price refers to a model of cooperation where a company clarifies the amount of work and the pay, promising a fixed price. The price here does not change, and instead, as the name suggests, it stays fixed. It allows customers to plan the budget while staying within predefined requirements and specifications. Although you can pay additional charges, the primary model remains the same. 

The model is ideal for the shorter term and is perfect for a short-term project offering limited requirements with optimum transparency. This scenario is apt for individuals looking forward to starting a business venture and a co-founder still needing to stand up to their claims.

Types of Pricing Models for Your Web Development Project

The model paves the way for the hiring company to plan and prepare the budget in close adherence to the service provider’s pricing module. The process of working stays unchanged, without any extra expenses involved. Both parties need to specify the requirements, decide on a fixed or hourly development cost, and prepare the budget while avoiding potential difficulties.

  1. Fixed-rate Model

This model is a type of model where the web development company offers the total amount of work, time, and effort while fixing the price, hence the name. The price is thus fixed, and it does not alter ever, in any case. 

One can allow the company to prepare the budget as per the quotation of the service provider. Moreover, it offers more security, promising no changes in the process. This scenario is when both parties gain clarity beforehand, with no more alterations and confusion.

  • Pros of fixed-rate model
  1. Follows all rules: It abides by all rules and regulations as mentioned beforehand. There is no alteration or change in any statement by any party.
  1. States advance deadline: The company specifies a deadline beforehand while finishing the project within the stipulated deadline.
  1. The budget is prepared beforehand: The budget is prepared and is fixed while signing the contract and meeting the web developer hourly rate.
  • Cons of fixed price model
  1. Compromised on flexibility: The flexibility might be compromised as you get what you have signed up for.
  1. Time-consuming: Planning takes time, and it is essential to consider several things at once.

When to use a fixed-rate model for your project?

This business model of pricing is ideal:

  • While indulging in simple website development projects
  • When you have a fixed deadline for web development
  • When there is not a long list of project requirements and demands
  • When there is clarity in vision, set objectives and the end result of the project
  1. Hourly Rate Model

Chosen as one of the most preferred pricing models, you only need to pay for as many hours as the service provider puts in. Hence, in other words, you only pay for hours effectively spent on working on the project. This case is often the favourite mode of payment for web development companies as they get paid on an hourly basis and is a highly justified payment model. 

At the same time, the model is even a favourite for customers as they can quickly request modifications to the projects. Moreover, it is also easier to implement the ideas throughout all stages of development while receiving the best results as requested. Pay on the basis of average cost per hour for the web development team.

  • Pros of hourly rate model
  1. Pay for exact hours: According to the website development hourly rate, the client needs to pay for hours spent doing the work. Hence, the web developer can earn the number of hours they are putting in on your project.
  1. Receive a perfect website: It offers customers a perfectly done website with desired and updated results. In other words, clients can opt for an hourly rate for web developers and get the requirements fulfilled.
  1. Improved flexibility: Furthermore, the pricing model offers improved flexibility to customers as they can suggest changes whenever needed. Clients can quickly request modifications, and web developers can get them done while opting for an hourly rate for web development projects.
  • Cons of the hourly rate model
  1. Lack of precise planning: Planning the budget in advance might not be possible as the cost is impossible. This scenario is because it is open to various changes throughout the process, and hence completing it within your desired budget might be difficult.
  1. No certain deadline: The deadline is not that certain as it can be easily modified several times. Hence, the data can keep changing as many times as required.
  1. Might lead the client to pay extra: A client might even need to pay a few additional bucks if the web development company/web developer is dishonest with the work. In addition, several providers often tend to add extra hours, which can be difficult for the clients to match.

When to use the hourly rate model for your project?

This business model of pricing is ideal:

  • When the website development project is quite extensive and multifaceted
  • When the task is complicated and needs the incorporation of varied features 
  • When it is challenging to stick to a specific time frame for web development
  • When a fixed budget fails to do justice to the project 
  • When the project needs various modifications 

Which Pricing Model to Choose for your Upcoming Web Development Projects?

Both the models have their unique characteristics, pros, and cons. While it can get extremely challenging to choose the right pricing strategy, it might be ideal for blending and making most of what the two have to offer. Although it is appropriate to firstly test each model and ensure the right step for you and the business, it is better to select the hourly rate model for projects that do not have a specific deadline and have unknown variables. 

On the other hand, count on projects with deadlines with no major specifications for a fixed pricing model.

Moving Forward with the Best Web Development Agency

You can choose one of the pricing models that suit your decided budget, the deadline you specify, and the variables the web development services project has in store. Then, it is time to take the final call and make sure you make the best decision in choosing the best web development company for your technology projects! 

At the end of the day, it all boils down to you trusting yourself and making most of the experience you have garnered in your business to enable the best-fit technology. 

At QalbIT, we are the topmost product development and leading web development company. Let us get in touch to enable your future technology projects with our web development services and follow all the industry yardsticks for business success.


Frequently asked questions

chevron down Why is fixed price better in some scenarios than hourly development charges?

Budget-conscious customers like the fixed price model as the total project pricing is confirmed right in advance. Contrasting to hourly rates, where full pricing is not set, and the time it would take to build the complete software solution.

chevron down How much time and cost do web developers take for hourly rate projects?

For web developers, costing on an hourly rate is a striking prospect. The client might not know how long a project will take, mainly if it is a project, one has never developed or designed before.

chevron down What categories of web development projects can be built and what are their charges?

Place them into various buckets:
Small-sized company web portals,
Medium-sized eCommerce websites,
Large-sized portals and digital products,
Web application development,
Membership websites,
Blog portals.
The average cost of a website or web application development project will vary according to design, development, and other added costs like integrations or migration.