

Ask HN: One time fee for web application - gpong

Many shareware developers charge one time fee for their software. Is it a good idea to charge one time fee for a not too complex web application?
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exline
Patrick at Bingo Card Creator does this. If you search his blog (
<http://www.kalzumeus.com/> ) you find the entries where he discusses it.

For me it depends on what is the lifetime value for a customer. Very easy to
determine if its a one time fee. And what is the lifetime expense of a
customer. If the expenses (server cost, _support_ , etc.) grow over time, then
you are bound to lose money. If your application is one would only be used a
few times, say wedding planning, or related to being pregnant, then I can see
it.

The big downside I see, is how do you handle upgrades. With a SaaS
subscription model, they are continuously paying for the upgrades. With a web
app with a one time fee, you would either have to give them the upgrade for
free, force them to pay for the upgrade or maintain multiple versions. With
desktop apps, it seems that you get a big boost in sales with an upgrade and I
feel like you miss that with a one time fee for a web app.

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byoung2
_Many shareware developers charge one time fee for their software_

Remember that most desktop software run as standalone programs, so there isn't
an ongoing expense of servers and bandwidth. It is also much easier to charge
these users for upgrades later on (at a discount, usually).

With web apps there is an expectation that the product will continually be
upgraded even when they're free (think Gmail or Google Docs), so it's harder
to justify charging for upgrades.

You also have to consider that some users might only use the app for a few
months, and others for a few years. Should I pay the same if I just need your
app for a short time?

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imp
In general it's probably not a good idea, but it probably depends on the
product. I have a web app that I charge a one-time fee for, but it only lasts
for one year, so it's essentially a one-year non-renewing fee. It works
because it fits naturally with how people use the product (it's for fantasy
football so it lasts for one NFL season).

Most web apps, like project management software, fit nicely into recurring
monthly/yearly payments. Unless yours is very different from that then it's
probably better to do recurring. You'll have recurring expenses to pay to keep
the site running, so you'll need recurring revenue to cover those.

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Kliment
Interesting idea. I don't see why not. Consider recurring lifetime costs per
user and see if you can set a fee that covers that. Remember that from that
point on you depend on new customers (as your paying customers will never pay
you again). You might want to look at a one time fee for a year's use of the
service, or something like that.

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bjplink
I do it (<http://www.forescoregolfstats.com>) for a very simple little web app
that I developed a few years ago. I only suggest the one-time fee method if
your app requires little maintenance and support. I receive a support request
once or twice a month at most and the app runs on lightweight web hosting.

I don't actively push new updates. This month I set aside a few days to rework
the interface a bit but other than that the feature base has been pretty
static since launch.

~~~
phuff
Do you mind sharing revenue numbers?

~~~
bjplink
I won't share dollar amounts but I'll tell you my accounts convert from free
trials to paid at an 11.33% rate as of today.

~~~
phuff
Cool, thanks!

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damoncali
If customer acquisition cost is low enough to make your one time pricing make
sense, then by all means, go for it.

I would guess that it would only make sense for software so cheap that
recurring billing didn't make sense. ($10-20 total lifetime value of a
customer).

The trouble is that getting customers that cheaply is difficult, and even
harder to scale. Upselling existing customers with recurring revenue can be
much easier than getting new customers.

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zachwaugh
I like the idea. As a developer, it's certainly a more tempting business model
than worrying about selling ads. The only web app I know of that does this is
pinboard.in. They charge a one-time signup fee, and that fee slowly increases
as the amount of users increase, so the earlier you sign up, the cheaper it is
(<http://pinboard.in/signup/>). I don't know if it's sustainable in the long
term though.

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rubinelli
"Lifetime" sounds like a huge can of worms to me. Just offer a 2-year plan if
you don't feel like implementing a (relatively) complex subscription system
right now.

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fragmede
You may want to offer a both, a one-time-fee as well as a monthly cost, and
let users decide.

