I run an eBay auction sniping service and users can pay either a percentage of items they win or a fixed monthly price of $5 (or $30 for a year) for unlimited use. However now that big buyers are using the service some are buying for hundreds of thousands of dollars a month for only a $5 service charge which is way too little. I'm hesitating between eliminating monthly payments for unlimited use and leave percentage based payments only, or at least increase the monthly cost from $5 to $30, and the yearly cost from $30 to $180. Which do you think is the best option, or do you have a better idea? Thanks
Who are your competition? You'll find that if you up your prices your users will go elsewhere, they are probably using you because you are the cheapest so check out what others are charging and work with that knowledge.
Price your service for what it's worth. What do you think it's worth? Price it competitively as well. Do research on your competiters. What are they offering and for how much. How is your service superior to theirs?
Make a price depending on the amount of money spent per month. For example: if you spend under $500 a month you pay $5/mo if you spend $0-$500 a month you pay $10/mo if you spend $501-$1000 a month you pay $15/mo
My prices are already half that of most competitors if they choose to pay 0.5%, and my monthly options just make it even cheaper for high volume buyers, so even if I sixtuple my price I'm still at the worst half the price of the competition with the 0.5% option, and still cheaper for high volume buyers with "sixtupled" prices. And about making a price per price range, that almost comes back to the same as the percent based system so I'd might as well just keep that payment option.
You charge what the market will pay. If you charge half of what others are charging, then you still have some wiggle room.
So considering if my users choose to pay a percent of items won my rates are as little as half the competition, should I "sixtuple" my monthly payment prices or just eliminate the monthly payment option? Even sixtupled monthly prices would still end up far cheaper than the competition for heavy business users, so is it not a better idea to keep that payment option and sixtuple the price? Thanks
You must check your prices related to your competition. I would recommend doing a slow increase where now you double it, and then in the future triple it and show because if I was paying $5/month for a service and the next month I checked and it was $30/month I would stop it unless I saw something more offered for that big a jump in price. Also, if the service renews automatically every month then you must make sure you're members know before doing it, or you will have some angry members. I would actually recommend having tiers so you can get your fair share from customers of various levels so people with $50 item value aren't paying $30/month. Example: $0-$100 product worth= $5/month $100-$500 product worth= $8/month $500-$1000 product worth= $10/month $1000-$2500 product worth= $20/month $2500-$10,000 product worth= $40/month $10,000-$25,000 product worth= $90/month $25,000-$100,000 product worth= $150/month and so on. Lastly you can also set a percent so for example 0.5% of the value is the monthly rate so $100 is $0.50/month, and $100,000 is $500/month.