Know Which Pricing Model is Best for Your App Development: Fixed or Hourly

Tarun Nagar
Tarun Nagar, Founder & CEO at Dev Technosys
Published on Nov 28, 2018 in App Development
Know Which Pricing Model is Best for Your App Development: Fixed or Hourly


Mobile app development can be a tricky affair. You need to decide on an initial agreement which is predominantly built upon a fixed pricing model. However, there is another majorly used business model which is hourly based model. Selecting the right plan can be quite tedious as it should fit your entire operating procedure of the company, contracted goals and requirements along with general expenses that are taken care of by you. These different app development pricing models are quite common as well as time-proven. However, some companies like to apply their own hybrid and combinations. Let’s look at these pricing models and find out which one is best suited for you.

Fixed Pricing Model

Fixed Price agreement is actually a single-sum contract where the mobile app development company is inherently accountable for the completion of the project within the agreed amount in the bind. It can be quite an effective choice in the cases where requirements, rates as well as specifications are highly predictable. The client should be able to easily share his own clear vision of the prospective product with the development company in order to ensure the most appropriate final product.

The fixed pricing model is best used when there are clear requirements as well as determined deadlines. It includes the development of Minimal Viable Product or MVP. It is best suited in particular case of smaller projects which have limited project scope.

Advantages of Fixed Pricing Model

1. Ensured Predictability

It is the basic factor which every entrepreneur is always seeking in his business. Company strategy often requires clear deadlines as well as figures to be actually transferred to the budget. The entire planning expenses for the next 1 to 3 months ahead can easily provide you with an exact figure. If the project development lasts for over 4 months, it is hard to foresee the overall outlays and in this case the hourly pricing model is best suited. It is better to hire iPhone app developers for a longer project built on the iOS platform.

2. Inherent Transparency

With the particular set of requirements, along with a fixed budget as well as pre-arranged deadlines, you won’t see any surprises. The constant project management interactions with the service provider ensure the compliance of the scope as well as protect the margins.

3. Ease of Management

Payments of the service provider can actually be based on the overall percentage of the entire work performed. Such workflow actually requires a bit of involvement since the expectations are quite predictable and transparent.

Disadvantages of Fixed Pricing Model

1. Lack of Flexibility

It is the major weak point this pricing model. As a client, you are actually responsible for any kind of emergent changes that you might have actually initialized or those ones which are beyond the competence of the mobile app development company.

2. Lack of Accountability

It can be referred to as both pros as well as cons which depend on every particular case. This particular approach doesn’t actually comprise of any regular reports or any interaction between the development team and the client. All of the management is actually carried out by the development team, so you don’t need to allocate timeslots for the purpose of deeper project involvement.

Hourly Pricing Model

This particular pricing model also goes by the name of Time and Material Model which determines the cost by means of taking all the hours that are involved in actually getting the work done. This model is quite popular as it offers huge flexibility. You can easily make any alteration as per your requirement even during the middle of development work such that you can easily get the product which is built exactly according to your ever-changing requirements and preferences. You can easily involve yourself in the development phase in order to enhance the overall quality of the app which is developed. As mentioned earlier, the overall cost is directly associated with the total amount of hours which the developers have to spend to implement various things. Depending on the entire progress of the development, the cost may increase or even decrease in case you don’t wish to inculcate a few features and functions. The timeline in order to complete the work isn’t actually fixed too.

This model is best-suited for long-term projects which have dynamic requirements. It is also useful when the project scope isn’t completely known. It is suitable for the projects which require flexibility in order to modify the scope or even vary the entire workloads.

It can be quite an effective model when the app idea is quite vague, and you don’t have any particular idea when it comes down to validating the idea. It is also quite good for carrying out an ambitious project which is quite sophisticated with different other aspects such as rigorous testing as well as there is involvement of client approval. It is useful whenever you wish to know the detailed insight actually related to the entire progress of the work at any particular instant of time.

Advantages of Hourly Pricing Model

1. Inherent Flexibility

The unit-price contacts actually allow the clients to easily modify the overall volume of the work, revise designs and materials, shift the focus and even change the features following the entire project implementation. For Android app development, hire an Android developer who can provide you with this flexibility.

2. Work Space Dynamicity

It is among the key features within the larger projects. There can be certain goals that need to be achieved, however, by knowing it can be reached is not actually that important. Often the small and mid-sized companies make the decisions in the process with evolving strategy as well as building custom app simultaneously.

3. Improved Timing

By avoiding fixed price process, it helps in saving time and starting the project immediately. Also, the blended rates even allow the clients to see how much time is actually spent by the development team on every feature and you can easily motivate them to work more efficiently.

Disadvantages of Hourly Pricing Model

1. Lower Control on Budgeting

It is one of the major disadvantages of this model. The overall cost can easily go far beyond your expected budget. Hire an Android developer who provides right development charges if you are building an Android app.

2. Deeper Involvement

It is required from the client to ensure that the development team is delivering toward the particular approved scope and within the allotted number of hours.


In recent time, outsourcing has grown from quite a straightforward concept to much-complicated aggregation of different patterns and options. In this particular complex chain, the pricing model is another typical configuration which the business owners should manage properly and get right. Considering the above mentioned Fixed Pricing Model and Hourly Pricing model, choosing the best one comes down to the characteristics of your project. You have to weigh in all the strengths as well as the weakness of every pricing type and how they can actually fit in your project.

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About the author
Tarun NagarFounder & CEO at Dev Technosys

Tarun Nagar is the Founder & CEO of Dev Technosys, a global ranking Mobile, and Web Development Company. With 10+ years of experience of enabling then Startups which are now global leaders with creative solutions, he is differentiated by out-of-t...

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