Fixed-fee pricing
also known as flat-fee pricing · fixed-price
Charging one agreed price for a defined scope of work, regardless of the hours it takes. Gives the client certainty and puts overrun risk on the agency.
For example, an agency quotes $12,000 to design and build a website with a clearly defined scope. Whether it takes 90 hours or 130, the client pays $12,000 - so a tight scope and a change-order habit are what keep the project profitable.
Why it matters to agencies: fixed-fee pricing is what most clients want, because they know the cost up front. For the agency it rewards efficiency but punishes loose scope, which is why it only works safely alongside a clear scope of work and disciplined change orders.
- Quoting a fixed fee on vague or shifting scope.
- Having no change-order habit, so every overrun gets quietly absorbed.
- Never checking the effective hourly rate after delivery to see if it paid.
What is fixed-fee pricing?
Charging one agreed price for a defined scope of work, regardless of the hours it takes. Gives the client certainty and puts overrun risk on the agency.
What is the difference between fixed-fee and time-and-materials pricing?
Fixed-fee is one agreed price for a defined scope; time and materials bills for the actual hours, so the cost can move.
How do agencies protect margin on fixed-fee work?
With a precise scope, clear exclusions, and change orders for anything beyond it - so overruns are billed, not absorbed.
When is fixed-fee pricing a bad idea?
When the scope is vague or likely to change; pricing a fixed fee on uncertain work usually means padding it or losing money.