First, look at your variable costs. These are the things that go up as more people use your product. In SaaS, that means bandwidth and storage. Price accordi

First, look at your variable costs. These are the things that go up as more people use your product. In SaaS, that means bandwidth and storage. Price accordingly. I think $0.25 per GB for both storage and bandwidth is a reasonable assumption (yes AWS can give you lower, but you have to deal with request pricing and S3 vs. EC2 persistent storage, etc.). Don't price yourself lower than that. If you want to give people 5GB of storage space and 50GB of transfer, you need to charge them at least $15. Those are real costs. Any free version will be crippled because storage and bandwidth cost money. That's ok. Give a few MB away for free with unlimited time (unless you have a SaaS that isn't going to be crippled by low storage allowances). That way, people can sign up without a credit card and really use the system without any hassle. If they really want it, they'll need more storage and pay. Most of the accounts will probably end up being browsers who don't really want/need your service, but that's ok. Take into consideration your market. Is this a market with lots of users? If so, go for lower margins, you'll make it back in scale. If this is a niche, that niche will pay up and you'll have fewer users so you'll have to charge more. Most importantly, make it obvious. Don't make it so that someone looking at your rates wonders why the pricing scheme is the way it is. Make it obvious how to sign up and terminate. Make it hassle-free. It makes you look professional. Don't do paypal or some other form of payment simply because it's easy/cheap. It's a hassle. It looks unprofessional. Make it easy for users to get to what they want - hopefully it's your product, but if not they're still people that deserve the respect of ease of use.