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Comparison · Fixed scope vs Hourly vs Retainer

Fixed Scope vs Hourly vs Retainer: Which Pricing Model Fits

The three ways software work is priced, who carries the risk in each, when each one fits, and why DevKey Technologies does not bill hourly.

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Quick answer

Fixed scope fits a defined deliverable: you pay for an outcome and the vendor carries the estimating risk. A retainer fits a live product with a steady stream of changes: you buy a set amount of time each month. Hourly fits almost nothing well, because it rewards slow work and makes every invoice a surprise; a capped discovery sprint covers the one case (unknown scope) that hourly was meant for.

Side by side

CriterionFixed scopeHourlyRetainer
You pay forAn agreed outcomeTime spentA monthly block of time
Who carries estimating riskVendorClientShared
Invoice predictabilityHighLowHigh
Scope changesQuoted before builtAbsorbed, silentlyReprioritised within the month
Incentive for the vendorFinish efficientlyTake longerKeep the client happy month to month
FitsWebsites, MVPs, defined appsUnknown scope (use a discovery sprint instead)Live products, ongoing improvements

Verdict by situation

Questions about this choice

Why don't you bill hourly?

Because it puts the client and the developer on opposite sides of every decision: the client wants fewer hours, the developer is paid for more. Fixed scope with change control gives the client a predictable price and the vendor a reason to be efficient.

What happens if a fixed-scope project runs over?

If the scope has not changed, that is the vendor's cost. If the client added scope, it was quoted before being built. The written scope is what makes this fair in both directions.

Related: pricing · blog/why i dont bill hourly · blog/dedicated developer vs project which to choose

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