Revenue Model Question

[CardinalsFan]

I'm not really sure how to explain this with out giving away too much info right now. feel free to pm me if you want to know the idea.

Basically what I am debating is whether to use 1) a yearly subscription model, or 2) taking 10-15% of each transaction.

my feeling is that the subscription model will be much easier but harder to initially market unless I offer free signup the first 6months to a year

what do you guys think would be best?

 

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[CardinalsFan]

too vague I agree.

the website will allow college students and business around colleges to make money by utilizing something that they already have and selling it to other students. it will provide an online system that will let them not have to put forth the work to make the money, instead just sit back and collect.

should I charge the student that will be making money a yearly subscription fee in hopes that another person will buy their product/service OR do I make it a completely free service and only take a cut once the transaction is made?

 

[RealOG]

Card,

This is not a revenue model question, this is a pricing question. And it sounds like you have two customer types: Students and Small Businesses.

I am blind to your product and business model, so I will take a random stab. You need to really think about your customers and what is important to them.

Students have one thing in common - they are all poor. They have time, energy, but no cash. Charging them upfront or even monthly might not cast the biggest net. Can you charge a percentage of their sales through your site? If they are going to make money through your site, you should just take a piece of their revenue. That way there is no money out of their pocket initially. You could likely charge more this way. Perhaps have pricing variability depending on volume or total revenue.

The other option is to charge less, but charge upfront. Do you have an NPV for your revenue? That way you can optimize the charges based on what the customer wants and tweak it to what gives you the highest return.

BTW - You should check out my video from B&P on customer segmentation. It might help you and your business.

Good luck, bro.

RealOG

 

[CardinalsFan]

thanks for you advice man! where can I find your video from the B&P?


I really want to get as much knowledge from you guys that I can, think I could pm you the idea?

 

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[RealOG]

Sure, send me a PM.

Andviv will be posting all the videos in a few weeks (I think). Check with him on availability.

 

[JtotheP]

you should do yearly subscription