fixed fee
A set price for a defined scope of work, regardless of how many hours it takes to complete.
Definition
A fixed fee gives both parties certainty: the client knows the price and the agency knows what must be delivered. It depends on a detailed scope, assumptions and a process for changes. If the agency underestimates, it absorbs the loss; if it finishes early, it keeps the surplus. Clients should watch for quality shortcuts to protect margins, and agencies should build in contingency. It is common for projects and increasingly for scoped monthly packages. A short list of assumptions, such as the number of stakeholders and review rounds, is what makes a fixed price fair to both sides.
In a sentence
The website was priced at a fixed fee with three milestones.
Any extra pages beyond the scope required a change order.
