Comment by patio11 | Hacker News Reader

Comment by patio11 | Hacker News Reader

I (transparently) love HN, but very much do not love HN on pricing. A blog post is sitting in my drafts folder about this. One of these days, one of these days...

There are numerous Ask HNs about our demographics. Take a look at them. Compare with your domain expertise about people who run non-profits. The differences are fairly dramatic.

You'll never win an argument about pricing with someone who is not in the market for your product anyhow. Their opinions are not relevant. Getting $0 from HN readers will not compromise the success of your business, since there is no pricing strategy which will result in you getting more than $0 from HN readers.

I also think that 9.5% is less than 6% + 3.5% when considered from the perspective of the people whose opinions matter to you making your rent next month. For that matter, I think 10% would also also likely be perceived as less than 6% + 3.5%. In any event, you'll likely be additive on their existing revenue (or the customers will think you are), and 90% of free money is better than 100% of no money every day of the week.

I couldn't agree more.

The cost (time, money, etc) of setting up their own website and processing their own transactions is obviously prohibitive, as most nonprofits don't accept online donations.

Lots of nonprofits also know exactly what percentages of their revenue go towards administration and marketing, so they're likely to have a good comparison point for how much it costs them to receive donations by other means.

Some wise words. Thanks.

You're correct - we are additive on the nonprofits' existing revenue (other than cases where they would be switching from another service). The problem that I seemed to be encountering in emails from prospective customers (actual nonprofits) was that it was psychological. Nonprofits are pressured to keep their Administrative and Fundraising expenses low. They tend to have a gut reaction when they see a percentage that's above 0%. They also tend to think about how much they could raise. When they think of it in very aspirational terms, the % seemed prohibitive.

Of course, I could be wrong on all of this. I've only been doing it for 2 weeks...

Why not reverse the pricing and say "you keep 90% of the first $1000 you raise through Bellstrike and 100% of the money above that". It puts a positive spin on it and they see they save money as they raise more money.

Thanks for the advice. We definitely need to do some A/B testing on the price. (Also to answer the question, I didn't edit the post - it's the original text).

Did you edit your post? I seem to remember reading that you were planning to lower prices with scale.

If that is true and you're finding that people are price sensitive, you should list your lowest price on the front page ("as low as 4 percent!"), and make it clear in the signup process that rates are higher at lower volumes. Ten percent is not a lot to pay at lower volumes considering you take care of payment processing and tech hosting, and merchant accounts at Paypal start around $30-40 USD per month, so someone will need to be collecting at least $500 a month before they come close to breaking even.

I came here to suggest fees dropping as volume rises, but of course it's already been covered! All I can add is that you're not even factoring in the cost of finding a competent developer and paying them to make that happen - small nonprofits usually don't have a developer on staff, often just a volunteer or two who may really just be WordPress admins.

I think you definitely need to play around (AB test) with your pricing model. People have thrown out options already, another one to consider is one which gives the product away for free for donations under $100 (users still pay the 3.5%) in order really strip away barriers to sign ups. Once they go over $100 a month and your site has proven its value perhaps they won't mind the fees as much since your product has already demonstrated its value.

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