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Doug Nebeker ("Doug")
I am working on a server product and have naturally started thinking about pricing and how to accept payments. So far I am planning to charge per server my product is installed on, but this may change.
Can anyone provide some guidance on how large payments I will be able to accept online? How much would business customers in general be willing to pay online? At what point do I need to handle orders and payments offline?
I think you need to provide more information to get a sensible response.
For businesses, most reasonably senior managers have a discretionary limit on how much they can spend, mostly on a credit card. This may be $500-1000. Past that, you'll have to get into formal purchasing procedures, so it'll be offline for them, even if the last stage is online for you.
The main exception to this is investment banks, where you can buy pretty much anything, up to several thousand dollars, just to try it out. They are swimming in money, so don't really care about formal processes at this level. Note that this is based upon experience in The City (London) a few years ago, so things may be more strict now.
The main component of the product will be implemented as an Apache extension, so potential customers may need to deploy it to anywhere from a single server to every server in a large cluster.
For large customers paying online will naturally not be an option, but I will probably try to create fixed price license packages for smaller customers that can be handled online. Does the limit of $500-$1000 apply to smaller customers as well?
We regularly have online payments up to $ 4K. Our largest online payment has been $ 17 K. Having said that lots of companies will only pay offline by purchase order even for quite small amounts. It really just depends on the company.
The problem with the larger payments is that they are more likely to be declined by the credit card company.
Wednesday, December 12, 2007
My experiences are similar to Anon's. I get $2K payments online and purchase orders for $49. It really does just depend on the company/school/city, etc. (And there doesn't seem to be any difference in which vertical the customer is from).
What I do is accept payments online. The online order page also mention we accept purchase orders and checks directly. When someone sends a purchase order (maybe 20% of all orders from around the world) I send them the product license and an invoice (a nice looking .rtf doc) via email. The invoice lists three ways to pay:
* online (special URL with their price embedded)
* bank transfer into a 'sweeper' account (which I regularly sweep into my main account)--German speaking companies seem to prefer this
* address to send a check. If you're in the US plead with them to write the check in USD--in my experience US banks are not very good at handling foreign currencies and you'll get clobbered with fees.
One other note: Make the purchase as easy as possible. I have a fax number for accepting purchase orders (I think $10/mo from MyFax.com) and also tell them you accept emailed purchase orders--that's how most of mine show up.
Wednesday, December 12, 2007
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