

Ask HN: Why is subscription billing hard? - zdrummond

Our company has created a new pricing model which is built around subscriptions. We have been thinking about the best way to bill our customers and report what has happened to accounting.<p>While doing research I came across Zuora (http://www.zuora.com) which is a SaaS based subscription billing system. It turns out that their product "solves" the whole pipeline (sales -&#62; use -&#62; billing -&#62; accounting) but it is very very expensive.<p>So my question is, why? I am not at all trying to pick on Zuora. My guess is they have a fantastic product, but I am having trouble justifying the price. Isn't this just a simple rules engine that produces reports?<p>My guess is that I am falling into the classic blunder that "It's Trivial" (http://www.codinghorror.com/blog/2009/07/code-its-trivial.html). I was hoping someone in the community could enlightenment me on the pitfalls, before I go off and build it myself!
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dangrossman
Think about a company like Comcast -- millions of customers, thousands of
phone agents, thousands of contractors in Comcast vans hooking up home
service, multiple regional websites, legacy customers from previous product
iterations and acquired local cable companies. Add on to that multiple public
and private billing plans, service credits, local deals/specials,
grandfathered customers on old plans, a combination of fixed and usage-based
billing, optional add-ons, and parent/children accounts for business and
landlords. Imagine just how complex that "rules engine" has to be to get
billing right.

The company that can manage that for Comcast is going to be delivering
hundreds of thousands to millions of dollars in value. If they didn't pay
someone for it, they'd have to employ and manage a large development team just
to do billing. Lots of salaries. That's what justifies the price.

If you're a startup with 3 payment plans and sometimes you have to give
someone a credit because you had some downtime, your situation isn't even 1%
as complex, and you can get by with a $50/month service or a couple hundred
lines of your own code.

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skrish
Depends on how complex your product and pricing model is. Zuora is slightly
enterprisey customers and priced accordingly and they charge setup fee,
customization fee etc.,

If you are looking for simpler products focused on small & medium businesses
there are plenty of options available as well.

Of course if you are in North America you have Stripe as your first bet and
for bit more sophisticated billing plus more options to do promotions,
automated notifications, HTML emails, customer support portal, more complex
metered billing, grandfathering of price plans (happens!), multi-gateway
support etc., you should consider using a billing solution.

Disclosure: I am one a co-founder of <http://www.ChargeBee.com>, another
Subscription Billing solution focused on small businesses.

Shameless plug: If you are looking for options to use payment gateway for
credit card + bank transfers for recurring to save $$s per transaction you
should try our solution (launching the ACH part very soon).

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subsection1h

        While doing research I came across Zuora [...]
    

What other solutions did you evaluate? Which of your requirements did the
other solutions not meet?

After I research solutions to a problem, I end up with a list of requirements
and a list of solutions with notes regarding each solution (e.g., pros and
cons). If you were to post a complete list of your requirements and notes
regarding each solution you evaluated, it would be easier to provide relevant
feedback.

(If you didn't take any notes, you might want to consider the benefits of note
taking in the context of a personal or company wiki.)

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orangethirty
How much is expensive?

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jaylist
Ranging from little at the low end.

We have customers ranging from startups in a garage to enteprises and
everything inbetween. Plenty of customers who started small and scale up. Talk
to you friendly Zuora rep. He'll give you a good price. :)

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orangethirty
Thanks for answering, but I'm asking the OP how much is expensive to him. I
don't sell services like yours, but like to know the options out there in case
a client needs it. Though with US clients I just set them up with Stripe and
be done with it.

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zdrummond
Well, as the Zuroa rep mentions, it's an enterprise level product so they have
a very wide range of plans. To be fair to them, it's likely best to just give
them a call.

To give you a sense of scale, however. For a small company, with decent
revenue, it costs a substantial chunk of a dev's salary.

~~~
orangethirty
Thanks, that's all I wanted to know. Seems you are better off making something
custom.

Note: I have no issues with Zuroa. Never heard of them and have no experiences
with their products. I was just curious about what the OP meant by expensive.

