Fixed price or hourly: which is actually better for you

Clients tend to want fixed prices for certainty, and studios tend to want hourly for safety. Both instincts are reasonable and both are sometimes wrong.

Fixed price

Works when the scope is genuinely known: a defined set of pages, known functionality, content already written.

What actually happens: the studio adds a risk margin — usually 20–40%. You pay for uncertainty whether or not it occurs. And every change becomes a negotiation, which slowly makes the relationship adversarial.

Watch for: a fixed price with a vague scope. That is not certainty, it is a dispute with a date on it.

Hourly

Works when the scope will evolve, or when the work is exploratory.

What actually happens: you carry the risk. With a studio you trust this is cheaper, because you do not pay the risk margin and small changes cost minutes instead of a change request.

Watch for: no cap and no reporting. Always agree a not-to-exceed figure and weekly time reports.

The arrangement that usually works best

Fixed price for a small, well-defined discovery phase — perhaps 10% of the expected budget. Discovery produces a real specification. Then a fixed price for the build, now quoted against something concrete. Then hourly or a retainer afterwards.

You get certainty where certainty is possible and flexibility where it is not, and the studio quotes a project it actually understands.

The one thing to insist on either way

A written change process. What counts as a change, how it is estimated, who approves it. Ninety per cent of unpleasant endings on web projects are not about money — they are about someone feeling that something should obviously have been included.

Payment schedule

Thirds is standard and fair: on signing, at design approval, on launch. Be wary of full payment up front from a studio you do not know, and be equally wary of one willing to do everything with nothing up front — that is often a sign of a queue that is emptier than it should be.