4 ms·

What's up with every AI company having a $0 plan and a $20 plan? I would pay for a lot more of these tools if they were $5 (obviously with less capability than

by KMnO4 2y ago

What's up with every AI company having a $0 plan and a $20 plan? I would pay for a lot more of these tools if they were $5 (obviously with less capability than a $20 plan), but I don't use any one enough to justify nearly $300/year (post tax).

marcosdumay 2y ago
That's because payment processing and customer support take almost all of the $5, if not more than it.
- vanviegen 2y ago
  Isn't payment processing just single digit percents? And customer support... What's that?
  - jorams 2y ago
    > Isn't payment processing just single digit percents? It is usually a fixed component + a single digit percentage. For larger payments the fixed component becomes largely irrelevant. For small payments it can eat up most of the money involved. As a quick example, Stripe's standard price for a credit card transaction in the US is 2.9% + $0.30. For a $5 payment that's almost 10% in direct fees, which is just about low enough that this is often where saas pricing starts. This assumes you do tax calculation yourself (or ignore it until you're big enough) and handle fraud detection yourself. If you pay Stripe for these you're paying a significantly larger fixed fee. There's also another significant risk at such low prices: In case of a disputed payment, which can happen a long time after the payment and will likely be more frequent if you don't pay to proactively deal with fraud, Stripe will charge you a $15 dispute fee regardless of the end result.
  - carlosjobim 2y ago
    No, it's percents plus a fixed cent amount. Something like 30c is normal. Customer support: When you are charging money for something, you need to give support to customers regarding their billing etc.
  - coffeebeqn 2y ago
    Aren’t their in-house agents doing the “support” ?
maccard 2y ago
Farther up, someone else was complaining about a different tool costing $5/mo but saying they’d pay $3/mo for it. Everyone having a $20 price point probably means that that’s the point they think the customers will pay for it. Will introducing a $5/mo tier quadruple their paid user base? My guess is no, but that a lot of the people currently paying $20 will drop to paying $5

by KMnO4 2y ago

marcosdumay 2y ago

That's because payment processing and customer support take almost all of the $5, if not more than it.

vanviegen 2y ago
Isn't payment processing just single digit percents? And customer support... What's that?
- jorams 2y ago
  > Isn't payment processing just single digit percents? It is usually a fixed component + a single digit percentage. For larger payments the fixed component becomes largely irrelevant. For small payments it can eat up most of the money involved. As a quick example, Stripe's standard price for a credit card transaction in the US is 2.9% + $0.30. For a $5 payment that's almost 10% in direct fees, which is just about low enough that this is often where saas pricing starts. This assumes you do tax calculation yourself (or ignore it until you're big enough) and handle fraud detection yourself. If you pay Stripe for these you're paying a significantly larger fixed fee. There's also another significant risk at such low prices: In case of a disputed payment, which can happen a long time after the payment and will likely be more frequent if you don't pay to proactively deal with fraud, Stripe will charge you a $15 dispute fee regardless of the end result.
- carlosjobim 2y ago
  No, it's percents plus a fixed cent amount. Something like 30c is normal. Customer support: When you are charging money for something, you need to give support to customers regarding their billing etc.
- coffeebeqn 2y ago
  Aren’t their in-house agents doing the “support” ?

maccard 2y ago

Farther up, someone else was complaining about a different tool costing $5/mo but saying they’d pay $3/mo for it. Everyone having a $20 price point probably means that that’s the point they think the customers will pay for it. Will introducing a $5/mo tier quadruple their paid user base? My guess is no, but that a lot of the people currently paying $20 will drop to paying $5