Spreedly doubles pricing. • Hacker News Board

Re: Spreedly doubles pricing.

#11

Post by mikeryan » Sun, Oct 23, 2011, 5:26 AM UTC

happyfeet wrote: post #10

patio11 wrote: post #6

My monthly Spreedly bill went up by approximately the amount I spent on AdWords between 9 AM and 3 PM on Friday. I know pricing discussions generate a lot of heat, but honestly, $30 is not a lot of money. Nor does it magically become a lot of money after you have 500 customers, at which point you have very high-class problems. Here, let me extend that graph with one extra line: http://images1.bingocardcreator.com/blo…

You are right. This is true for businesses with substantial number of customers. It is a significant difference for those starting up with small customer base (10 or 20) to pay from $23 earlier to $53.

I realize that there's many HN Members who may be trying to start a company in 3rd world countries where $30 is a significant chunk of change, and this may sound harsh. But if your business, at any point, can't absorb a $30 a month increase in fees for something as important as your subscription billing system then something is wrong.

Re: Spreedly doubles pricing.

#12

Post by Silhouette » Sun, Oct 23, 2011, 7:19 AM UTC

I think those suggesting that this is an insignificant rise are missing the point.

These subscription billing services have close to the most powerful lock-in imaginable on your business. When you commit to one, you are trusting them with a vital part of your operations. At best, switching later is going to be disruptive to your business and potentially damaging to your customer relations.

This is the third of the most well-known recurring billing services to sharply increase prices in the not-so-distant past, after Recurly and then Chargify. In each case, that suggests they have either screwed up their projections so much that they had to grab extra money or deliberately screwed their customers over by dramatically increasing costs when they have an all-but-captive audience.

Either way, that is a serious black mark against an organisation that's asking you to trust them with something as important as your payment processing, particularly when those organisations are already relatively tiny compared to most payment-related services and therefore inherently risky to build on anyway.

BTW, blog posts from these services about how they are just trying to find a sustainable business model and hope their customers will understand aren't exactly reassuring. If they could get things so badly wrong before, why should we trust that they are doing any better now and won't see another rise next year?

This isn't newsworthy because of the amounts involved. It's newsworthy because it reflects on the competence of these payment services and illustrates a dangerous trend.

Re: Spreedly doubles pricing.

#13

Post by ohashi » Sun, Oct 23, 2011, 7:22 AM UTC

mikeryan wrote: post #11

happyfeet wrote: post #10

Earlier quoted context omitted.

You are right. This is true for businesses with substantial number of customers. It is a significant difference for those starting up with small customer base (10 or 20) to pay from $23 earlier to $53.

I realize that there's many HN Members who may be trying to start a company in 3rd world countries where $30 is a significant chunk of change, and this may sound harsh. But if your business, at any point, can't absorb a $30 a month increase in fees for something as important as your subscription billing system then something is wrong.

I am not really sure it's the price change that is most offensive. It's the fact they were willing to do it without regard for their current customers. I don't want to deal with a company that is happy to change their price whenever they feel like it and I get the short end of the stick.

Re: Spreedly doubles pricing.

#14

Post by bigiain » Sun, Oct 23, 2011, 7:23 AM UTC

happyfeet wrote: post #4

It is surprising to see this coming from Spreedly, especially in the context of their previous discussion on the same topic in HN (when Chargify increased price). When you price a subscription product, one should factor in long term sustainability at that price, for a long time. Any price increase due to additional features / facilities you provide - say 24*7 on-call support, must not be burdened on your existing use…

"It is surprising to see this coming from Spreedly"

Really? A relative newcomer to e online payments space, undercutting the status quo pricing of the incumbents, suddenly finding they've underestimated the costs of running their service? Doesn't surprise me at all...

If I were building a new business based on any of the new online payment services, especially if they're significantly less expensive than traditional merchant accounts or PayPal, I'd be treating it as a short term windfall until they discover the hidden costs they're not charging you for. If they're _very_ lucky, maybe they've got some brand new fraud prevention technology that means the genuinely have lower running costs than PayPal or Visa, but I wouldn't bet _my_ business on it.

Re: Spreedly doubles pricing.

#15

Post by olefoo » Sun, Oct 23, 2011, 8:20 AM UTC

Silhouette wrote: post #12

I think those suggesting that this is an insignificant rise are missing the point. These subscription billing services have close to the most powerful lock-in imaginable on your business. When you commit to one, you are trusting them with a vital part of your operations. At best, switching later is going to be disruptive to your business and potentially damaging to your customer relations. This is the third of the mo…

Or it could be that all three of these subscription billing companies got shafted by their correspondent banks...

Re: Spreedly doubles pricing.

#16

Post by Strom » Sun, Oct 23, 2011, 9:29 AM UTC

mikeryan wrote: post #11

happyfeet wrote: post #10

Earlier quoted context omitted.

You are right. This is true for businesses with substantial number of customers. It is a significant difference for those starting up with small customer base (10 or 20) to pay from $23 earlier to $53.

I realize that there's many HN Members who may be trying to start a company in 3rd world countries where $30 is a significant chunk of change, and this may sound harsh. But if your business, at any point, can't absorb a $30 a month increase in fees for something as important as your subscription billing system then something is wrong.

Sure it can absorb a $30/month increase in fees. But if multiple service providers hit me with a $30/month increase then it kind of adds up. In other words, a price increase like this is ok as long as it's the only one.

Re: Spreedly doubles pricing.

#17

Post by MichaelApproved » Sun, Oct 23, 2011, 10:05 AM UTC

patio11 wrote: post #8

MichaelApproved wrote: post #7

Sure, users can export and migrate, but that costs time and money to do. Code must be updated to work with the new provider and other projects would be put on hold.

Exactly. If your engineering costs swamp $30 -- and they do -- this announcement is a total non-event for you.

Sure $30 may not be a big deal but what's going to happen next time? And the time after that?

What a terrible situation to be in. I sign up for a product, in part based on their pricing, and they bump up the cost knowing it'll be too expensive for me to move.

If this happened to me, it might be too expensive for me to move an existing product away from them but it'll definitely keep me from putting another project on the platform.

For the record, I'm using Recurly, so I'm talking directly from the point of view of an existing and paying customer.

Re: Spreedly doubles pricing.

#18

Post by lclarkmichalek » Sun, Oct 23, 2011, 11:01 AM UTC

olefoo wrote: post #15

Silhouette wrote: post #12

I think those suggesting that this is an insignificant rise are missing the point. These subscription billing services have close to the most powerful lock-in imaginable on your business. When you commit to one, you are trusting them with a vital part of your operations. At best, switching later is going to be disruptive to your business and potentially damaging to your customer relations. This is the third of the mo…

Or it could be that all three of these subscription billing companies got shafted by their correspondent banks...

Not likely for spreedly, as you have to provide your own payment gateway i.e. paypal.

Re: Spreedly doubles pricing.

#19

Post by eps » Sun, Oct 23, 2011, 11:09 AM UTC

happyfeet wrote: post #3

arctangent wrote: post #2

I'm very surprised they haven't chosen to "grandfather" existing customers, so that they can remain on the previous pricing model.

True. They have proposed to "grandfather" the current plans only upto 90 days so customers to migrate elsewhere, if they opt to.

And this probably means that they did the numbers and whatever they are going to loose with those who leaves will be offset be increased fees paid by those who sticks around.

Re: Spreedly doubles pricing.

#20

Post by timharding » Sun, Oct 23, 2011, 11:32 AM UTC

It's not so much the rise in monthly fixed costs that's the problem.

It's the doubling of per transaction pricing (that will just sting month after month) and the lack of features compared to now cheaper competition. Recurly at 10c vs. Spreedly at 40c.