Seat-Based Pricing

Seat-based or per-user pricing is an ideal model for startups scaling up. With every new user added, a pre-set fee is charged, offering simplicity and scalability in equal measures. It facilitates effortless cost prediction for businesses adding more users. This direct correlation between the cost and utility makes it an equitable model. For instance, Slack, a popular team collaboration tool, implements this model, charging businesses per active user.

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Usage-Based Pricing

Usage-based pricing, often called pay-as-you-go, is an adaptable model that charges customers depending on their usage metrics, such as data consumed or hours of operation. It is a flexible model that allows customers to pay precisely for their usage. For example, Amazon Web Services (AWS) uses this model, charging customers based on their resource usage, offering maximum flexibility.

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Flat Fees

Flat fee pricing, offering a single fixed cost irrespective of the usage or user count, brings in transparency and budgeting certainty for customers. It's best suited for products where usage doesn't significantly impact service costs. A great example is Netflix, which offers different plans at fixed rates, providing unlimited access to their content library.

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The add-on pricing model offers a basic software version at a core price, charging extra for additional features. This model allows customers to tailor their package based on budget and needs. For example, Zoom follows this strategy, offering a basic plan for free, with add-ons like extra storage and advanced admin controls available at additional costs.

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One-Off Charges

One-off charges are standalone costs that customers pay for specific services or features, such as customizations, setup, or training. This model can enhance user experience and cover costs outside the subscription model. Shopify, for example, offers one-off charges for themes and certain plugins in their e-commerce platform.

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Commission-based pricing takes a percentage cut from the transaction value your software helps to generate. Commonly found in marketplace platforms, it aligns directly with the customer's value. A notable example is eBay, which takes a commission from every sale made through their platform.

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One-Off Cost

Also known as a perpetual license, this model charges a single upfront payment for indefinite software use. It is a rare model in the SaaS world but can work for niche products. Adobe used to follow this model, selling software like Photoshop as standalone products, before transitioning to a subscription-based model.

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