Ask HN: One time fee for web application

https://news.ycombinator.com/item?id=1490881

by gpong • 16 years ago

15 12 16 years ago

news.ycombinator.com

Many shareware developers charge one time fee for their software. Is it a good idea to charge one time fee for a not too complex web application?

Kliment• 16 years ago

Interesting idea. I don't see why not. Consider recurring lifetime costs per user and see if you can set a fee that covers that. Remember that from that point on you depend on new customers (as your paying customers will never pay you again). You might want to look at a one time fee for a year's use of the service, or something like that.

byoung2• 16 years ago

Many shareware developers charge one time fee for their software

Remember that most desktop software run as standalone programs, so there isn't an ongoing expense of servers and bandwidth. It is also much easier to charge these users for upgrades later on (at a discount, usually).

With web apps there is an expectation that the product will continually be upgraded even when they're free (think Gmail or Google Docs), so it's harder to justify charging for upgrades.

You also have to consider that some users might only use the app for a few months, and others for a few years. Should I pay the same if I just need your app for a short time?

damoncali• 16 years ago

If customer acquisition cost is low enough to make your one time pricing make sense, then by all means, go for it.

I would guess that it would only make sense for software so cheap that recurring billing didn't make sense. ($10-20 total lifetime value of a customer).

The trouble is that getting customers that cheaply is difficult, and even harder to scale. Upselling existing customers with recurring revenue can be much easier than getting new customers.

imp• 16 years ago

In general it's probably not a good idea, but it probably depends on the product. I have a web app that I charge a one-time fee for, but it only lasts for one year, so it's essentially a one-year non-renewing fee. It works because it fits naturally with how people use the product (it's for fantasy football so it lasts for one NFL season).

Most web apps, like project management software, fit nicely into recurring monthly/yearly payments. Unless yours is very different from that then it's probably better to do recurring. You'll have recurring expenses to pay to keep the site running, so you'll need recurring revenue to cover those.

exline• 16 years ago

Patrick at Bingo Card Creator does this. If you search his blog ( http://www.kalzumeus.com/ ) you find the entries where he discusses it.

For me it depends on what is the lifetime value for a customer. Very easy to determine if its a one time fee. And what is the lifetime expense of a customer. If the expenses (server cost, support, etc.) grow over time, then you are bound to lose money. If your application is one would only be used a few times, say wedding planning, or related to being pregnant, then I can see it.

The big downside I see, is how do you handle upgrades. With a SaaS subscription model, they are continuously paying for the upgrades. With a web app with a one time fee, you would either have to give them the upgrade for free, force them to pay for the upgrade or maintain multiple versions. With desktop apps, it seems that you get a big boost in sales with an upgrade and I feel like you miss that with a one time fee for a web app.

fragmede• 16 years ago

You may want to offer a both, a one-time-fee as well as a monthly cost, and let users decide.

bjplink2• 16 years ago

I do it (http://www.forescoregolfstats.com) for a very simple little web app that I developed a few years ago. I only suggest the one-time fee method if your app requires little maintenance and support. I receive a support request once or twice a month at most and the app runs on lightweight web hosting.

I don't actively push new updates. This month I set aside a few days to rework the interface a bit but other than that the feature base has been pretty static since launch.

phuff2• 16 years ago

Do you mind sharing revenue numbers?

bjplink2• 16 years ago

I won't share dollar amounts but I'll tell you my accounts convert from free trials to paid at an 11.33% rate as of today.

rubinelli• 16 years ago

"Lifetime" sounds like a huge can of worms to me. Just offer a 2-year plan if you don't feel like implementing a (relatively) complex subscription system right now.

zachwaugh• 16 years ago

I like the idea. As a developer, it's certainly a more tempting business model than worrying about selling ads. The only web app I know of that does this is pinboard.in. They charge a one-time signup fee, and that fee slowly increases as the amount of users increase, so the earlier you sign up, the cheaper it is (http://pinboard.in/signup/). I don't know if it's sustainable in the long term though.

Ask HN: One time fee for web application

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