Subscriptions vs one time payments
I often see that many users complain about monthly subscriptions on various platforms (HN, LinkedIn, etc.). Those users say that there are too many subscriptions that a user has to pay every month, they don't own the software, etc.
On the other hand, I see many new tools and products in the IT world that still rely on monthly subscriptions.
What is your opinion?
Do you prefer one-time purchases to subscriptions, or would you rather pay small fees each month instead of one-off costs?
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I think subscription based pricing is here to stay since it lowers the barrier of entry and allows more users to take the risk and experiment with new tools.
Thanks for sharing your opinion. That is true, monthly subscriptions give a lower entry hurdle, that's one of the advantages.
So I personally prefer monthly subscriptions. However, one-time payments are preferred by a lot.
On our saas ( https://onedomain.io/pricing ) we offer both a free plan a subscription for $8/$12 a month and a one-time payment for $600. Yes, I know we're just missing trials and we'll have every option in the book. However, users love the wide range of options.
Now back to the $600, sounds like a lot compared to the mere $8 a month but it offers more features.
Subscriptions vs one-time payments can be an endless argument but both are here to stay. Subscriptions offer a low entry barrier for those who don't have a big budget to spend on software. That's why we include all those options in our saas. So everyone can have the ability to join with the pricing option tailored for them.
Does anyone ever pay the $600? I would assume no.
You are correct. We are lowering that to a more reasonable price of $299
I'm curious to see what the breakdown would be there. I always wondered if a subscription could be used to drive more one-time payments if the pricing was done right. I guess $600 is too much of a multiple of $8/$12 a month to get anyone to bite!
That sounds like a good solution. Great job, coming up with that.
For a subscription user there is no option to get the same features as a One Time Payment user?
So the main feature on the one-time payment is our marketplace fees which is coming out this month. There will be no fees charged when you sell you're website/domain other plans have fees that range from 18%-8%. Now this is critical for brokers that are selling multiple websites at 5k <> 20k .
That feature should come out soon fingers crossed.
As a consumer, the only reason I dislike monthly payments is that I am stressed about forgetting about these services and paying for things without using them. That said, it doesn't deter me for signing up for tons of subscriptions lol.
I can relate to that.
Personally, I have more and more subscriptions running at the same time, sometimes I forget about them and get super frustrated that they charged me again.
I honestly prefer one time payments and want to provide a lifetime plan for my own product. However, the tools we use don't provide the same lifetime offer (for example: Firebase. The costs scale as the product scale). This makes providing a lifetime plan not really sustainable. :(
I agree. It always depends on the scale of the tool/service.
It is an app, which does not require expensive infrastructure (like no cloud) there is no need for a monthly payment.
I like it when software companies offer both solutions -- a monthly subscription and a larger lifetime payment.
From the service provider standpoint, I think once you figure out the LTV of your customers, you will be able to offer such a model.
Hey Alexander!
I would actually suggest doing both! My startup ZoZo (ZoZo-App.webflow.io) offers three plans for users to choose from when upgrading their account.
Users can lock ini for a yearly subscription at a deep discount or they can purchase the lifetime plan which is like buying two years worth of the product.
Let me know if this helps you decide at all! Happy to connect!
Thanks for sharing, thats a good idea - and a reasonable pricing for the lifetime plan.
Nobody likes paying subscriptions, but everyone likes charging subscriptions. But truth be told, some things make perfect sense as a subscription - like web hosting. Other things, actually don't. I'm willing to pay subscriptions for products that lend well to being subscriptions. And same for one off charges.
Had this dilemma with my company Scrypt.
Some people only wanted a one-off video, some wanted on a monthly basis.
Decided that there weren't enough people who wanted to commit to monthly to justify a subscription
Implement a token based system so it costs x amount of tokens to do a video. So you have the ability to do that or subscriptions
It depends. As a user I will definitely love onetime payment. But if a SaaS product uses high level of server resources than it can be risky and running it for long term is hard.
Each has their pro and con but personally, I like monthly subscriptions because I feel as if it's relevant and always changing. Let's take these software for example:
Evernote + Upnote, they both offer different pricing plans: Evernote is $8 a month but Upnote is a onetime payment of $25, although I personally use Upnote I feel as if their future is limited simply because of their one time payment. On the other hand Evernote currently sucks but im sure they have the resources to become better because of the monthly payment.
I think it depends on the product you are selling, and the market you are aiming your product to.
I like to pay for products like Xnapper, Tinkerwell, and others, that don't force you to pay a yearly/monthly subscription.
But there are products that require a subscription, because of the costs they have.
Personally, I tried OTP for my product https://legendsverse.com. And it worked, I guess? but now I'm trying subscriptions, just because I think it's easier to get to my $5K MRR goal with subscriptions than OTPs?
Not really sure. I actually tweeted about it earlier today, and it's a constant struggle I have a every now and then.
This year Legendsverse has made less money than the year before, though, but I think it's because a lot of factors and not only payment plans.
One of our SaaS products is a one time per use fee and it works well. Lots of returning users and we are exploring other use cases where we can differentiate a SaaS with one time payments. Ex: When building products I want to use an SEO tool 3-4 times a year and don't need a monthly service for $100/mo.
Makes absolute sense. Thanks for sharing it.
Hello! I am launching a startup and I need your help. The essence of the product: “eBay for subscriptions”. It would be great if you could take a few minutes of your time to take a survey on Google forms: https://docs.google.com/forms/d/e/1FAIpQLSdCv8ooAG3Encla5QVGRUR8vTdFVuq4mO5kvkUctS8lhJvmAA/viewform
I need data to support the hypothesis on which I am basing my startup. Your answers will help me better understand user needs and create a product that is as useful and usable as possible. Thank you very much for your help!
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Thanks for your expertise.
I agree, if you have typical SaaS products, where the provider needs to host infrastructure, it makes more sense to have a subscription model, to cover operational costs.
If it's i.e. a desktop app, which operates local, it would be way better for the user to own the software and avoid having monthly subscriptions.
This comment was deleted 10 months ago.
Exactly.
I can give you an example. We are working on ERA - The Markdown Note-Taking Tool For Developers. Currently in beta, but for the pricing we think of a one time payment. It's a desktop application, your data is stored locally. With the release version, there will be an option, that users can sync their data to any cloud of their preference. In this case it makes the most sense to give the user the opportunity to buy this tool and own it.
If we decide to add a cloud, that we host, we could offer as an upgrade with a monthly subscription, but just for the syncing option.
The reason why I started this thread is, to see how most of the guys here think about the pricing models. I hear so many people complaining about another subscription. I.e. there is a new tool, people like it, but already have so many subscriptions every month, that they get annoyed.
Thats the impression I get from various people.
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Of course, I know Obsidian. I tested every single tool which could be considered as a competitor and beyond. No worries, I don't take it the wrong way.
We have been working on ERA for 2 years now and a majority of the time I did validation, even while building it. I talked with developers. A lot of them and I hear the same thing again and again. Even this week I had 3 conversations with devs to keep track of the needs and the pains. There is no tool dedicated to developers. Nothing they enjoy to use. Simple but yet powerful.
Sure they can use their code editor, but to have a tool dedicated for note-taking, documentation and code snippets is a different experience, then writing just in some files. On top ERA will offer possibilities for UML Diagrams (Mermaid), for mathematical formulas (Mathjax,) and other features, developers and engineers need on their daily basis. And much more.
I was considering making an OrgMode editor for Mac, but decided to focus on my stuff. There's another idea you could add to improve your project. Completely different than markdown parsing, but very convenient for todo and agenda stuff.
Thanks for sharing that idea, I will definitely look into it :-)