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My company (MailChannels) sends email on behalf of more domains than any other transactional email provider (see https://trends.builtwith.com/mx/transactional-e

by ttul 7y ago

My company (MailChannels) sends email on behalf of more domains than any other transactional email provider (see https://trends.builtwith.com/mx/transactional-email/traffic/Entire-Internet https://trends.builtwith.com/mx/transactional-email/traffic/...) because our customer base is hosting companies rather than individual senders. The whole transactional space has matured in the past year with SendGrid's acquisition by Twilio and Mailgun passing through a couple of different private equity portfolios. Mailgun is simply trying to make a profit; removal of the generous free tiers had to happen eventually. In their S-1, SendGrid disclosed that it earned about 73% gross margins, spending roughly $18M in cost-of-goods-sold to earn $52M in revenue (six months ending June 30, 2017). Around that time, we estimate that they were sending roughly 30 billion messages a month, suggesting that they were spending $18M to send 30 billion messages - that's about $0.60 for every thousand messages. If SendGrid's costs are universal in the industry, then that 10,000-message free tier, therefore, is costing Mailgun perhaps as much as $0.60 x 10 = $6.00 a month. If you have thousands of free accounts, the cost adds up rapidly on the P&L statement. I could be off by an order of magnitude about the sending cost, but you get the point.

maxmalysh 7y ago
Amazon SES — $0.10 per 1000 emails.
- ttul 7y ago
  I suspect many tiny senders will just use SES...
- cpncrunch 7y ago
  Because it's shite. I've blocked SES's IP range on all my servers, as they just ignore spam reports.
  - tren 7y ago
    It's not actually SES' responsibility, the sender can use SQS to receive bounceback/spam notifications and act on it.
    - michaelt 7y ago
      Responsibility, shemonsibility. I want my e-mails delivered, if SES has a poor IP reputation, it's devalued regardless of whose fault that poor reputation is.
  - jcrites 7y ago
    Sorry to hear about that experience. One of SES's primary goals was keeping abuse off of the service, though no system is perfect. When I worked on SES, more than 50% of the team's total time went into fighting abuse. Part of that effort was comprehensive monitoring of a variety of feedback signals, including bounces, spam complaints, and other data. Individual senders are encouraged to monitor their own sending via the Reputation Dashboard and related facilities [1]. SES also monitors these signals, and if it detects signs of abuse, such as elevated bounces or spam complaints, then a sender's ability to send may be paused and the account's activity may be reviewed. FAQ on these processes [2]. Some of the tolerates are quite tight, and can result in action being taken even if much less than a percent of messages are getting these sorts of responses. There's a lot more that I can't describe in a short comment. SES processes and reacts to spam reports sent in standard formats like the Abuse Reporting Format (ARF), and looks at signals like List-Unsubscribe and bounces, etc. But this does require the system to understand the format of the reports used by the feedback loops [3]. Do you happen to know if your feedback loop sent spam complaints in ARF format? If you'd like to discuss further, feel free to reach out to me directly. [1] https://aws.amazon.com/blogs/messaging-and-targeting/announcing-the-reputation-dashboard/ https://aws.amazon.com/blogs/messaging-and-targeting/announc... [2] https://docs.aws.amazon.com/ses/latest/DeveloperGuide/e-faq.html https://docs.aws.amazon.com/ses/latest/DeveloperGuide/e-faq.... [3] https://aws.amazon.com/blogs/messaging-and-targeting/email-definitions-feedback-loops/ https://aws.amazon.com/blogs/messaging-and-targeting/email-d...
    - cpncrunch 7y ago
      I submitted multiple reports to email-abuse@amazon.com including headers, and received automated responses. For some spammers I reported them 4 times, but the spam kept coming. I think you've confirmed what I said in my parent comment...SES doesn't take a zero tolerance approach. I think it is the shared IPs that I've blocked (54.240.27.189/24). You'll see they are on multiple blacklists.
      - donmcronald 7y ago
        Do you literally block (aka drop) mail from SES IPs? That's awful for your users. If you really distrust mail from those IPs so much, why not just filter it straight to SPAM? At least you'd be delivering it and your users could whitelist senders (or domains) they trust.
- nekoashide 7y ago
  We looked at SES and it was a no go on reputation alone. We went from a few thousand emails on Mailgun to almost 7 million emails across 140 domains and we have never encountered any reputation issues over the years we have used them. It just works and I suspect this change is to help protect their email reputation.
nodesocket 7y ago
Makes sense. I think the 10,000 number was way too high, but completely removing the free plan is a bit jarring and frankly annoying. I'd be much happier keeping the free plan but only 100 emails a month instead. I'm still trying to figure out my new costs, I send approx 30 e-mails a month. I think it's like a handful of cents a month which is annoying.
donmcronald 7y ago
The thing that annoys me is the standard operating procedure in tech is to offer stuff for free until a bunch of people depend on it and then to start charging as much as you possibly can once there's a large enough customer base that a reasonable percentage won't have any choice but to bear the updated costs. Mailgun did a pretty nice job by offering a pay-as-you-go tier, but they still took features from the free plan and moved them into a paid tier where you have to spend a minimum of $420 per year. I use Mailgun for less than 100 emails per month, but happen to use the receive filtering that's not going to be available with pay-as-you-go. I don't expect them to give me anything for free, but I'm not going to pay $420 / year for something that costs $.72 using your estimates.
- akira2501 7y ago
  > The thing that annoys me is the standard operating procedure in tech is to offer stuff for free until a bunch of people depend on it and then to start charging as much as you possibly can [...] Maybe someone more knowledgeable can help me.. but from a laymans point of view, how is this different from the practice of "dumping?" Shouldn't the FTC be more active in protecting markets from this type of strategy?
  - ttul 7y ago
    It’s not anticompetitive to offer a freemium product, unless your market position is so powerful (Microsoft vs Netscape late 1990s) that competitors cannot also afford the same giveaway.
    - alharith 7y ago
      With the consolidation of resources into Big Tech, this is quickly becoming the reality across all domains. I imagine that they will always keep cloud computing costs juuuust low enough to have plausible deniability in a court case, but still.
- dumbfoundded 7y ago
  I don't know if emailing them would help, but I'd try it. They probably have a system to grandfather people in, who reach out. I would hope.
eb0la 7y ago
I always thought 'free tier' was meant to make development and testing feasible without incurring big charges. Having a big free tier is just a growth hacking technique, and it worked: people know the product and developeed integrations. But, all marketing tactics have a beginning and an end. If the market is mature, and it's ROI is not good enough or has decreased dramatically, it will end soon.

by ttul 7y ago

maxmalysh 7y ago

Amazon SES — $0.10 per 1000 emails.

ttul 7y ago
I suspect many tiny senders will just use SES...
cpncrunch 7y ago
Because it's shite. I've blocked SES's IP range on all my servers, as they just ignore spam reports.
- tren 7y ago
  It's not actually SES' responsibility, the sender can use SQS to receive bounceback/spam notifications and act on it.
  - michaelt 7y ago
    Responsibility, shemonsibility. I want my e-mails delivered, if SES has a poor IP reputation, it's devalued regardless of whose fault that poor reputation is.
- jcrites 7y ago
  Sorry to hear about that experience. One of SES's primary goals was keeping abuse off of the service, though no system is perfect. When I worked on SES, more than 50% of the team's total time went into fighting abuse. Part of that effort was comprehensive monitoring of a variety of feedback signals, including bounces, spam complaints, and other data. Individual senders are encouraged to monitor their own sending via the Reputation Dashboard and related facilities [1]. SES also monitors these signals, and if it detects signs of abuse, such as elevated bounces or spam complaints, then a sender's ability to send may be paused and the account's activity may be reviewed. FAQ on these processes [2]. Some of the tolerates are quite tight, and can result in action being taken even if much less than a percent of messages are getting these sorts of responses. There's a lot more that I can't describe in a short comment. SES processes and reacts to spam reports sent in standard formats like the Abuse Reporting Format (ARF), and looks at signals like List-Unsubscribe and bounces, etc. But this does require the system to understand the format of the reports used by the feedback loops [3]. Do you happen to know if your feedback loop sent spam complaints in ARF format? If you'd like to discuss further, feel free to reach out to me directly. [1] https://aws.amazon.com/blogs/messaging-and-targeting/announcing-the-reputation-dashboard/ https://aws.amazon.com/blogs/messaging-and-targeting/announc... [2] https://docs.aws.amazon.com/ses/latest/DeveloperGuide/e-faq.html https://docs.aws.amazon.com/ses/latest/DeveloperGuide/e-faq.... [3] https://aws.amazon.com/blogs/messaging-and-targeting/email-definitions-feedback-loops/ https://aws.amazon.com/blogs/messaging-and-targeting/email-d...
  - cpncrunch 7y ago
    I submitted multiple reports to email-abuse@amazon.com including headers, and received automated responses. For some spammers I reported them 4 times, but the spam kept coming. I think you've confirmed what I said in my parent comment...SES doesn't take a zero tolerance approach. I think it is the shared IPs that I've blocked (54.240.27.189/24). You'll see they are on multiple blacklists.
    - donmcronald 7y ago
      Do you literally block (aka drop) mail from SES IPs? That's awful for your users. If you really distrust mail from those IPs so much, why not just filter it straight to SPAM? At least you'd be delivering it and your users could whitelist senders (or domains) they trust.
nekoashide 7y ago
We looked at SES and it was a no go on reputation alone. We went from a few thousand emails on Mailgun to almost 7 million emails across 140 domains and we have never encountered any reputation issues over the years we have used them. It just works and I suspect this change is to help protect their email reputation.

nodesocket 7y ago

Makes sense. I think the 10,000 number was way too high, but completely removing the free plan is a bit jarring and frankly annoying. I'd be much happier keeping the free plan but only 100 emails a month instead. I'm still trying to figure out my new costs, I send approx 30 e-mails a month. I think it's like a handful of cents a month which is annoying.

donmcronald 7y ago

The thing that annoys me is the standard operating procedure in tech is to offer stuff for free until a bunch of people depend on it and then to start charging as much as you possibly can once there's a large enough customer base that a reasonable percentage won't have any choice but to bear the updated costs. Mailgun did a pretty nice job by offering a pay-as-you-go tier, but they still took features from the free plan and moved them into a paid tier where you have to spend a minimum of $420 per year. I use Mailgun for less than 100 emails per month, but happen to use the receive filtering that's not going to be available with pay-as-you-go. I don't expect them to give me anything for free, but I'm not going to pay $420 / year for something that costs $.72 using your estimates.

akira2501 7y ago
> The thing that annoys me is the standard operating procedure in tech is to offer stuff for free until a bunch of people depend on it and then to start charging as much as you possibly can [...] Maybe someone more knowledgeable can help me.. but from a laymans point of view, how is this different from the practice of "dumping?" Shouldn't the FTC be more active in protecting markets from this type of strategy?
- ttul 7y ago
  It’s not anticompetitive to offer a freemium product, unless your market position is so powerful (Microsoft vs Netscape late 1990s) that competitors cannot also afford the same giveaway.
  - alharith 7y ago
    With the consolidation of resources into Big Tech, this is quickly becoming the reality across all domains. I imagine that they will always keep cloud computing costs juuuust low enough to have plausible deniability in a court case, but still.
dumbfoundded 7y ago
I don't know if emailing them would help, but I'd try it. They probably have a system to grandfather people in, who reach out. I would hope.

eb0la 7y ago

I always thought 'free tier' was meant to make development and testing feasible without incurring big charges. Having a big free tier is just a growth hacking technique, and it worked: people know the product and developeed integrations. But, all marketing tactics have a beginning and an end. If the market is mature, and it's ROI is not good enough or has decreased dramatically, it will end soon.