Ask HN: Which business model - monthly recurring billing vs. pay-per-sale? • Hacker News Board

Re: Ask HN: Which business model - monthly recurring billing vs. pay-per-sale?

#11

Post by kayhi » Tue, May 17, 2011, 3:33 PM UTC

Being in the ecommerce space and a possible end user of the product I would charge based on the size of the deal without a monthly fee. The idea being to reduce friction even more than the 30 day free trial.

For example: widget costs $20 dollars if 50 people buy and take a percentage of the total so 1% (I would a/b test the percent and possibly ad a flat rate fee per an offer) would be 10 dollars.

I think this would align your interests more with the end user. The more they use your product, the more they pay you.

Re: Ask HN: Which business model - monthly recurring billing vs. pay-per-sale?

#12

Post by allwein » Tue, May 17, 2011, 6:07 PM UTC

> but if we don't make much sales for our customers, our revenue will be pretty much stuck

If you don't make much sales for your customers, they'll leave anyway.

The answer to your problem seems pretty clear to me: pay-per-sale. It minimizes the downside for your customers: If you make no sales, they pay no money. And it maximizes your upside: Sell 1000 units, make 1000 x fee.

Re: Ask HN: Which business model - monthly recurring billing vs. pay-per-sale?

#13

Post by mgkimsal » Wed, May 18, 2011, 7:03 PM UTC

fezzl wrote: post #4

mgkimsal wrote: post #3

I hate to say "a/b test" but... "a/b test"? Or perhaps just test CTA pages to see which ones people click more? Or survey existing users to ask for their input? I've wondered this on some projects, and the "a/b test" answer usually didn't feel right because in the beginning you're dealing with an insanely small amount of traffic (hard to gather meaningful results on tests from If you have some existing customers, sen…

Thanks for your suggestion. We have sent out surveys, but still there is little discussion about this on the internet AFAIK. About the free iPod: lie or really give one out?

An ipod shuffle is $50 - with shipping and tax about $65? That expense shouldn't be that much.