A comparative study between the two web development pricing models: fixed rate and hourly rate
Do you know what pricing model to choose for your website development project? Web development companies pay a lot of heed to the pricing technique you apply to their services. This post will take you through a comparative study between fixed price web development and hourly rate pricing models. Therefore, you need to remember the points thoroughly to ensure you are not confused in the future.
Fixed rate model
What is the fixed rate model in website development? The fixed rate model is a cooperation model where the professional web development company estimates the amount of work, effort, and time required for a particular service and fixes the price accordingly. The price is fixed, as the name suggests, and no scope of bargaining exists.
The fixed price model allows the hiring company to prepare its budget according to the price set by the service provider. They can be content that no extra expenses will be levied, and the working process will remain unchanged throughout. Both parties should mention their requirements beforehand while preparing the budget to avoid issues in the future.
Merits of the fixed rate model
- The web design and development services provider follows all the rules mentioned in the contract and provides each service they have promised earlier.
- The web development company declares the deadline in advance and finishes the project within a timeframe.
- In a fixed price model, the budget is prepared while signing the contract, and it remains intact throughout.
- The project manager leads the entire task, and the hiring company need not supervise anything.
Demerits of the Fixed Price Model
- The flexibility of the project is compromised since you will get what you have asked from the service provider while signing the contract.
- Planning the entire project in advance is highly time-consuming since you need to consider a world of things.
Hourly rate model
The hourly price model is one of the most preferred pricing models in the website development industry. In this pricing model, you only pay for the effective hours spent by the service provider in developing your project. Thus, the hourly rate is the favorite of web development companies since they get paid for every hour they spend developing a project.
On the other hand, customers get several advantages in this pricing model since they can flexibly add modifications to their projects. They can implement their ideas throughout the development process and receive an excellent website for their business.
Merits of the hourly rate model
- The customer has to pay for the exact hours spent completing the website and can be saved from paying extra.
- You receive a perfect website as you have desired and update it in the best ways possible.
- The hourly price model gives a lot of flexibility to the customer since he can suggest changes whenever and wherever he feels necessary. The project is open to modifications, and the client can add new features conveniently.
Demerits of the hourly rate M=model
- You cannot prepare the web development budget in advance since estimating the accurate cost at the beginning is impossible. The project is open to numerous changes in the entire development process, and thus, you cannot complete it within your desired budget.
- The project deadline is not certain since it can be modified several times. Thus, the submission date will keep changing as many times the project is updated.
- You might have to pay extra bucks if your web development partner is not honest with his work. Several service providers dishonestly add extra hours to the task, which is impossible for you to make out later.
Which Price Model shall suit your project?
Choosing between fixed price and hourly price models of a website development can be challenging once you have gone through the pros and cons of both models. However, you can make an effective choice if you consider several factors like the complexity, size, and time required to complete the project.
Here are some of the project examples according to the price model that shall suit them perfectly.
When to use the fixed rate model?
- While doing small and simple projects
- If your deadline is fixed and you can estimate the total time required for the project
- When your project requirement list is limited
- If you have a clear vision of the total budget of your project
In other words, fixed price web development is affordable for the startups, small businesses, and entrepreneurs.
When to use the hourly rate model?
- If your project is vast and involves a lot of complicated features
- When you are unable to determine the scope of the project in terms of a specific timeframe
- When your company does not have a limited budget fixed for the project
- If your project has the scope of implementing numerous modifications in the development process
Many other factors also fill this list, and they depend on the type of web development work your company is expecting.
Learn about our other web development pricing models
Below are the other pricing models web agencies offer to the clients seeking web development services from our company:
- Dedicated Team and Resources: Here, a web development agency offers the dedicated team of web developers and resources to the customer. The customer has total control of them and pays the agency accordingly.
- Time and Materials Consumed: Extensive projects that go on for a long time shall be feasible with this pricing model. Your expenses will be based on the changes you add to the project.
- Cost-Plus Pricing Model: In this model, we will allow you to collaborate with our development team and enable you to choose them. Our company will handle all the organizational problems, and you will pay us a monthly fee for our services.
Also F5 Studio web agency offers IT recruiting services.You should choose carefully between fixed price web development and other models and hope this post will help you abundantly.