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Comment by snoonan | Hacker News Reader

The 5% cut is a big problem. It's inherently not fair.

They aren't making a market (like an App store), promoting my files, creating my content, or otherwise providing value that scales with the growth of the success of my product. Why are they entitled to $5 on my $100 or $10 on my $200 if that's the price I choose? Charging a fixed price per sale is more fair + any %fees you might incur from payment processing.

Clearly many businesses are based on the same % transaction fee, but it's not really fair if you look closely.

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Well, you're paying for the middle man. They setup and main the infrastructure for persons that are not technically inclined and for whom it's not feasible to hire a coder to do it for them.

No argument! They should charge for the service, but not a % of the value I create.

It costs them the same to deliver a $5 file as it does a $50, apart from the transaction fees claimed by their upstream payment processor.

Interesting...and I don't disagree.

How would you like them to charge for a service like this?

Since they are charged a percent upstream, then they will have to pass that on to operate.

So I would imagine they could pass on the percent component of cost with no markup, and then charge a flat fee (ex: $1). I'm assuming they are never stuck with the bill in a fraud case. If they are, then the price should include that risk component as a percentage as well.

A flat fee per file seems to make the most sense, since their operation costs are per transaction. They should just figure out how much it costs them per transaction, then bake in a percent of their startup costs to reach the black in a reasonable time and use that as a flat fee. I can't see a justification for a percentage approach, its the same amount of work either way on their end.

1) Cover the standard 2.6% from paypal. Make that obvious. 2) Add a flat rate on top to cover operating expenses.

The current model makes a lot of sense for small to medium amount transactions but I too have a problem with 7.6% total of a much larger transaction this company didn't do any extra work for.

Alternatively you could have multiple rates based on the size of the payload. If you're really using their storage, which I doubt, then that percentage cost would cover the bandwidth to serve it. With that you would have people like me that would check their work though, to make sure if I'm really paying bandwidth costs, you better not be leveraging Dropbox's infrastructure for that too.

Personally, I do like the idea over a Zapier though that's a flat monthly fee. I couldn't possibly determine if the monthly rate is enough on principle but a cut of my profits is much less of an "up front" cost I can't adequately measure yet.

This sounds pretty much exactly the opposite of what I hear from pricing experts. Charge based on the value you provide to the person using your service, not based on your costs.

An easy system to post ebooks and charge for them is probably worth more to a person selling $200 ebooks rather than $100 ebooks.

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