How to price your services in a marketplace app

One of the most common questions we hear from new MD Platform clients is about pricing: "How should I price my services in the app?" It's deceptively tricky because in-app pricing is fundamentally different from quote-based pricing.

The shift from quotes to fixed prices

Most service businesses are accustomed to quoting — a customer calls, describes their problem, and the provider gives a price based on scope. In a marketplace app, this doesn't work. Customers expect to see prices upfront, add to cart, and pay without negotiation.

This requires you to translate your service into a fixed-price or tiered-price catalog. That's a discipline shift, but it's also a conversion advantage: customers book faster when they know what they're paying.

Three pricing structures that work in apps

1. Flat rate by service type

A single price for a defined service. Examples: "$80 — standard home cleaning (up to 2 bedrooms)," "$150 — toilet replacement." This works best for services where scope is predictable.

2. Tiered by property size or duration

Multiple price points based on a variable the customer selects. Examples: "1 bedroom — $60, 2 bedrooms — $90, 3 bedrooms — $120." Good for cleaning, pest control, landscaping, and similar volume-dependent services.

3. Hourly rate with minimum

A per-hour rate with a minimum booking. Examples: "$65/hour, 2-hour minimum." Works well for handyman, electrician, and other variable-scope services where the exact work isn't known until the provider arrives.

Where to start your prices

Don't try to optimize your prices at launch. Start at your current market rate and adjust based on data. The goal for the first 30 days is to understand your conversion rate (what % of people who view a service actually book it). If conversion is low, price might be a factor — but it's rarely the only one.

A practical starting point: research what competitors charge for the same service in your area. Price in the middle of the market, not the bottom. Customers who book on price alone tend to be lower-value long-term.

Handling the 10% commission in your pricing

If you're on MD Platform, factor the 10% commission into your pricing. A service you previously sold for $100 over the phone becomes a $111 app price (rounded) to preserve your net revenue. Most service businesses do this at launch and find that customers don't notice a modest price adjustment when the booking experience is smoother.

When to add surge pricing or promotions

Keep it simple at launch. Add promotions only after you have baseline data — otherwise you don't know what "normal" looks like. A well-timed first-booking discount (e.g., $10 off) can be effective for driving early adoption. Surge pricing is worth exploring once you have consistent high demand and provider supply constraints.