Choices - Will they make or break my project?

[ashfield212]

Hi there!

I'm currently developing a website I hope to turn into a profitable company some day. The develpment itself is going extremely well and I'm about 65% of the way there (In terms of website completion), however I'm struggling to make a somewhat big decision regarding service charges/fees.

My website will be offering a service that is currently very limited but out there. To expand a little further. A select few websites do actually offer this service, however they are limited to one or two countrys (UK, Canada, US), the websites themselves look very rushed and altogether amateurish without sounding too harsh. The sites I have found that do offer this service vary in terms of if they require a fee, those that do charge range from anywhere between $5.00 / $25.00.

From the research I have personally conducted, there is certainly a large amount of interest in what I am trying to achieve, therefore I have continued with the project.

My original intentions were to allow my users to enjoy the service in question freely, no charges or fees, this is where my brain started rebelling! I started worrying about server bills, as the service requires video upload which certainly isn't cheap to host. I'll require a dedicated server atleast and depending on traffic, may require future upgrades. My answer to this was to charge a small fee for the privilege of using the service.. GREAT, the website IN TIME will pay for itself. With this in mind, I then began thinking about traffic complications, what if I scare my users and potential customers away with the fee? I'll be left with no one!

In a nut shell, I'm more then happy enough allowing my users to freely use the service, my main problem is I'm scared of not been able to handle early growth. I can quite comfortably handle the dedicated server cost's to begin with, but like everyone else I have other bills to pay. What would happen if I require substantial server upgrades? Additional bandwidth costs? Could independant advertising cover this? So many questions!

I don't want to come across as overly confident, I'm just looking to the future and trying to imagine all possible scenarios, whilst obviously ripping my hair out!

Any and ALL advice is greatly appreciated on this matter, the anxiety is killing me. Many thanks for reading!

Ash

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Phantom309]

Hey ash, If the service is already out there and people are already paying for this service I don't see why you wouldn't charge for it. I think that if you offered it freely at first and then started charging for it at a later date and time that you would lose some of your visitors, as where if they come to the site seeing from the beginning that you charge less than than the other guys and if your site is designed nicely and not amateurish then I think you would stand a good chance of winning customers from your competitors. I certainly understand you looking to your future goals and figuring it out. My two cents is I would find a happy medium and charge for it from the beginning.

P.S. When I was in the Air Force and if the need came for us to take a test (for promotion, and career field advancement) the one the thing they would always drive into our brains is to never second guess ourselves or our gut instincts.

 

[EastWind]

why will you develop a service not to charge for it? i can understand a product, develop a software, give it out for free. but to develop a service, with a running cost? what is giving you the idea of giving it out for free? is that your business model? listen, that business model is sooo 1999, and ruined a lot of dot com companies. don't try to pull it off just cuz google and facebook are doing it. making money from ads is seriously overrated. if your product/service is good, then charge for it.

 

[ashfield212]

P.S. When I was in the Air Force and if the need came for us to take a test (for promotion, and career field advancement) the one the thing they would always drive into our brains is to never second guess ourselves or our gut instincts.

Thank you for your input Phantom309! My original idea and gut instict was to charge a small fee for the service, however anxiety took over and the worst case scenarios were constantly rushing through my head (visitors leaving me due to the fee!). I forgot to mention in my original post, I have a system in place that allows my users to trial the service for free upon registering with the website, allowing them to see what it has to offer without spending a dime.

why will you develop a service not to charge for it? i can understand a product, develop a software, give it out for free. but to develop a service, with a running cost? what is giving you the idea of giving it out for free? is that your business model? listen, that business model is sooo 1999, and ruined a lot of dot com companies. don't try to pull it off just cuz google and facebook are doing it. making money from ads is seriously overrated. if your product/service is good, then charge for it.

Hi there, the advice I've stumbled across over the past few months has varied. A lot of individuals I've spoke to have told me if I've found a niche market, grab hold of it, and don't charge a penny basically, attracting more visitors. The funny thing is this idea never felt quite right to me, hence my catch 22 situation. Maybe it just doesn't apply in my situation, I'm just determined to get my website off the ground and make it successful.. what ever the costs!

I thank you both for your input, I wish I could explain how much weight feels lifted off my shoulders.

Ash

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Gymjunkie]

If you want to have a successful business that let's you quit day job and support yourself and get freedom than you have to charge. While I love FREE but I've seen arguments for both free and paid sides of things and decide that the truth lies in the middle (as in a lot of things in life). I say Freemium is the way to go! If your service gives nice amount of value for your potential clients than give it away for free for a week ( a trial) show them how good it is and charge for it.

I started my blog as free and don't monetize it now but that doesn't allow me to quit my job. I am gonna quit this mistake and will introduce paid stuff (maybe Ecourse, maybe membership site) and start earning money. The idea of site paying off itself eventually is pie in the sky thinking... it won't unless you grab the bull by the horns! And that is esp. true with costs you will have to maintain the site and service.

 

[EastWind]

Hi there, the advice I've stumbled across over the past few months has varied. A lot of individuals I've spoke to have told me if I've found a niche market, grab hold of it, and don't charge a penny basically, attracting more visitors. The funny thing is this idea never felt quite right to me, hence my catch 22 situation. Maybe it just doesn't apply in my situation, I'm just determined to get my website off the ground and make it successful.. what ever the costs!

I thank you both for your input, I wish I could explain how much weight feels lifted off my shoulders.

Ash

I'm not advising you as I'm not a success story. So what I write is merely my own humble opinion. But I must ask, how many of these individuals who advised you have practiced what they preached? Gotten hold of a market, didn't charge a penny, attracted more visitors, then profited? History does have a way of repeating itself. In the late 90's, 2000, alot of the dot-com companies did that and went bust. Worst of all, they even had cash and spend it getting customers.

My opinion is that anything that is good and worthwhile is worth paying for from the get go. If your product or service is solving an immediate need, then people will pay for it. If people wouldn't, then you need to reexamine what you are doing. My opinion, now if some luck be on your side, your site may just take off and have massive growth. However, like I said, some luck has to come into it. You will be needing massive amount of users.

To understand this, imagine you have a free service oriented site, could be something like imageshack or one of those sites people use to upload and share programs. youupload? now imagine you have 1,000,000 users. A month, great right? Image/file uploads are resource hungry, in terms of storage space. So if these users are sharing a couple of tens of megs. You are going to be needing easily a hundred terabyte. You are going to be need the most reliable RAID servers, more drives. More systems, hella bandwidth. ETC, how much do you think such a site will cost to run a month? I have no idea. But it's not going to be cheap. Not counting the administrative costs, etc. How much will you make selling ads?

On the other hand, you can have a site/service that is well smaller, solves an immediate value problem that no one has. You may end up with 50,000 customers. If they are paying you $10 a month. $500k a month. With your 50k customers, you most likely will be more profitable than the above mentioned site with 1million users.

There's a saying around where I'm from, "Don't count heads, count bread."

I'm working on my first ecommerce site, and my problem is that I may be FORCED to give it away for free for a while before I charge and I don't want to do that, and I'm doing everything to make sure I can get paid from the get go. I'm going to be collecting data and reselling em to my customers. When I launch, I will have no data to sell em. So I'm going to have to get them to sign up, contribute data that I will sell back to them, and when enough contribute, start selling the data that I have gotten from them and hope that they stay. Yeah, crazy! But I'm dumb, so I will carry on with my dumb self. lol :iamwithstupid:

 

[Smooth]

To charge or not to charge...that is the golden question.

I've seen successful companies startup as free, then move to paid services. This way, it gives them a chance to build a customer base, get testimonials, and work out the kinks in operations before charging.

If you are considering free and making money from advertising, try to figure out what keywords and what types of ads would show up on your website, and then go check out how much they pay per click on adsense. If it is high, then free service with advertising might be an option. If it is very low, then maybe free service is not much of an option.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.