base price for marketplace ..
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Hey gang,
We've let a few add-ons sell for $5 for a while now. Much like the guy who runs the convenience store down the street, we're getting shafted in this deal. Both our merchant account and paypal take a notable cut of any transaction we process, and while everything in the marketplace sells frequently, we're not doing the type of volume Apple does in their App Store to negotiating better percentages around micro-payments possible.
From now on, we will not be selling stuff for less than $15. Frankly, I assume this will only really bother the developers who are already giving us a hard time around daring to charge some money for "open source." If that's you, that's a separate conversation you can comment on here:
http://www.concrete5.org/about/what_does_free_mean_/...
We've let a few add-ons sell for $5 for a while now. Much like the guy who runs the convenience store down the street, we're getting shafted in this deal. Both our merchant account and paypal take a notable cut of any transaction we process, and while everything in the marketplace sells frequently, we're not doing the type of volume Apple does in their App Store to negotiating better percentages around micro-payments possible.
From now on, we will not be selling stuff for less than $15. Frankly, I assume this will only really bother the developers who are already giving us a hard time around daring to charge some money for "open source." If that's you, that's a separate conversation you can comment on here:
http://www.concrete5.org/about/what_does_free_mean_/...
Anyone that disagrees, read this, few have had merchant accounts.
thatguy pays $5 for an app.
Frz takes 20-25% or so, so he has $1.25 to work with. Merchant accounts are usually around 3%, depends on how the purchase is made, so there's another 15 cents for that.
So frz has $1.10 to work with, not so bad, right?
Here comes mr merchant fee, asking for 30 cents for processing which goes to amex/visa/mc etc, more maybe for overseas.
So Frz and team has around $0.80, which is around retail margin..but frz doesn't run a gas station. 80 cents per sale of $5.00 product plus the support makes it a total wash, if not cost him money...surely some sanity.
at $15, it gets a little better. frz percent gives him around $4 - 30cents fee again and -45 cents for the 3%, so $3.35
I think he is doing peeps a favor there as well as that starts to maybe break even with actual support that needs to be redirected etc.
at $35, he'd be working from $9ish, and something like the blog app @ $55, he is probably clearing around $10. Either way paypal and the merchant account providers make out like bandits.
thatguy pays $5 for an app.
Frz takes 20-25% or so, so he has $1.25 to work with. Merchant accounts are usually around 3%, depends on how the purchase is made, so there's another 15 cents for that.
So frz has $1.10 to work with, not so bad, right?
Here comes mr merchant fee, asking for 30 cents for processing which goes to amex/visa/mc etc, more maybe for overseas.
So Frz and team has around $0.80, which is around retail margin..but frz doesn't run a gas station. 80 cents per sale of $5.00 product plus the support makes it a total wash, if not cost him money...surely some sanity.
at $15, it gets a little better. frz percent gives him around $4 - 30cents fee again and -45 cents for the 3%, so $3.35
I think he is doing peeps a favor there as well as that starts to maybe break even with actual support that needs to be redirected etc.
at $35, he'd be working from $9ish, and something like the blog app @ $55, he is probably clearing around $10. Either way paypal and the merchant account providers make out like bandits.
Yes.
I completely agree with you.
But I may want to give you a suggestion....
If the developer agreed to receive payment once a year or twice a year for $5 add-ons, concrete5 team won't have to deal with calculating every month for the payment.
Or if the volume is big enough, (e.g., 1,000 sales per month), and then, the developer can receive monthly payment.
And then... if I use Scott's calculation, it's going to be $800/mo - concrete5 team...
Something like that....
For users' perspective, it would be nice to be able to buy $5 small plug-ins.
But the decision is made already.
I'm completely follow your trail.
Maybe, the volume has reached the certain level, I will ask you to re-consider.... and I think we could reach this level soon (I hope)
I completely agree with you.
But I may want to give you a suggestion....
If the developer agreed to receive payment once a year or twice a year for $5 add-ons, concrete5 team won't have to deal with calculating every month for the payment.
Or if the volume is big enough, (e.g., 1,000 sales per month), and then, the developer can receive monthly payment.
And then... if I use Scott's calculation, it's going to be $800/mo - concrete5 team...
Something like that....
For users' perspective, it would be nice to be able to buy $5 small plug-ins.
But the decision is made already.
I'm completely follow your trail.
Maybe, the volume has reached the certain level, I will ask you to re-consider.... and I think we could reach this level soon (I hope)
Make it like gift cards, you have to buy say increments of $25, or whatever, say you want to buy a $5 block, then you buy $25, you have a balance of 20, and you are more apt to spend stuff. Most of the problem with micro-transations is that they aren't necessarily aggregated without proper software. Case in point, several years ago I used to sell tons of golf clubs through ebay. I would get my credit card statement, and each day fedex would charge me at least 30 times for the shipment of 10 boxes. I called them up and told them that they were paying the merchant processing fees (at the time $9 per days) instead of aggregating them up and charging them either every other day or offering weekly billed terms or something. They never changed how they did that, but I hope they have now.
So having a balance is nice, but then again it brings up issues with booking revenue and whatnot before the money is spent..a la gift cards etc.
So having a balance is nice, but then again it brings up issues with booking revenue and whatnot before the money is spent..a la gift cards etc.
Somebody asked about bulk pricing in another thread. I think this would be a good idea, just wanted to add it here to keep marketplace ideas within this thread.
I guess I'll have more ideas of my own after a couple of weeks with my own block on the marketplace.
I guess I'll have more ideas of my own after a couple of weeks with my own block on the marketplace.
I think bulk licensing is a great idea if its a discount on repeat purchases over time. I don't think the purchaser should have to bite it on the initial layout, there should be a way for repeat customers get something off automatically in the marketplace.
I don't think unlimited licenses make a lot of sense. Basically it says "this works so well for me, I plan to use it a LOT -- with no additional support over time." You can't provide unlimited support for free..
I don't think unlimited licenses make a lot of sense. Basically it says "this works so well for me, I plan to use it a LOT -- with no additional support over time." You can't provide unlimited support for free..
Plus, anyone who buys these should just pass off the cost to the client anyways, and what's an additional $15 added to the cost of an entire project. Negligible in 99% of cases.