That is not how marketing works, or corporations work. 10x more customers means ten times more billing, 10x more customer support, 10x more purchases to account for, etc. Ultimately 10x more cost of supply to the company. “Economies of scale” are almost always mythical.
But even beyond that, the actual cost of any product doesn’t really matter that much. That is just the floor, you are selling at a loss if you sell below cost — but sometimes that is worth doing strategically, to attract new customers, or if you have deep pockets to put a competitor out of business.
Outside of those special strat
That is not how marketing works, or corporations work. 10x more customers means ten times more billing, 10x more customer support, 10x more purchases to account for, etc. Ultimately 10x more cost of supply to the company. “Economies of scale” are almost always mythical.
But even beyond that, the actual cost of any product doesn’t really matter that much. That is just the floor, you are selling at a loss if you sell below cost — but sometimes that is worth doing strategically, to attract new customers, or if you have deep pockets to put a competitor out of business.
Outside of those special strategic circumstances, we price our products to maximize our profits.
The price has almost nothing to do with the cost. There is a price-to-total-profit curve and we want to find the peak of that.
If we price our product too high, we may get sales, each with a high profit margin, but in total if the high price drives makes too many customers think it isn’t worth it, we can end up with less profit versus selling it with a lower profit margin but greater volume.
Likewise, if we price our product too low, we may get a ton of sales, but if a majority of those buyers would have bought anyway at a higher price, the total profit might be less than if we had priced it a few dollars higher.
For example, say my product costs $5 to make and I get 1000 sales at $9.95, that is $9950 in revenue, and $4950 in profit.
Suppose I priced it at $10.95, and I get 950 sales. I lost the 5% of people for whom the extra dollar was too much.
Well I am making $5.95 for each sale, so $5.95*950 is $5652.50 — That is $702.50 more profit. That is 14.2% more profit. And 5% less work making products.
A maxim in retail business is that when you are overwhelmed with customers, it is time to raise your prices. It isn’t always true. Sometimes you might expand, sometimes the rush is caused by a temporary circumstance. But if it is persistent, you aren’t charging enough, and should come up with an excuse to raise prices, lose some customers, do less work, but make more profit overall. Costs have changed, laws have changed, etc.
This is also one of the valid reasons to price your products high so you can mark them down. Sales and coupons and specials are understood by consumers to be temporarily lower price changes, and thus very useful for judging demand for your products at other price points.
But there is no cultural equivalent for a “temporarily higher price point” you can use to judge demand at a higher price point; you just have to take a bet that most of your customers will pay it. It is best to start high, with liberal coupons or sales, and then gradually cut back on the discounts until you have found the peak profit margin.
$9.95/month, or $99.95/year, are presumably what, for now, retailers are finding is the sweet spot that maximizes their profits. It doesn’t matter if their cost per unit is 5 cents per client. If they price a dollar lower that doesn’t bring in enough new customers to make up the loss of a dollar from all their current customers. If they price a dollar higher, they lose more customers (at $9.95 each) than they retain by getting an extra $1 from those that stuck with them.
This is all about net profit from all customers, it is not about getting more customers or more sales.
Where do I start?
I’m a huge financial nerd, and have spent an embarrassing amount of time talking to people about their money habits.
Here are the biggest mistakes people are making and how to fix them:
Not having a separate high interest savings account
Having a separate account allows you to see the results of all your hard work and keep your money separate so you're less tempted to spend it.
Plus with rates above 5.00%, the interest you can earn compared to most banks really adds up.
Here is a list of the top savings accounts available today. Deposit $5 before moving on because this is one of th
Where do I start?
I’m a huge financial nerd, and have spent an embarrassing amount of time talking to people about their money habits.
Here are the biggest mistakes people are making and how to fix them:
Not having a separate high interest savings account
Having a separate account allows you to see the results of all your hard work and keep your money separate so you're less tempted to spend it.
Plus with rates above 5.00%, the interest you can earn compared to most banks really adds up.
Here is a list of the top savings accounts available today. Deposit $5 before moving on because this is one of the biggest mistakes and easiest ones to fix.
Overpaying on car insurance
You’ve heard it a million times before, but the average American family still overspends by $417/year on car insurance.
If you’ve been with the same insurer for years, chances are you are one of them.
Pull up Coverage.com, a free site that will compare prices for you, answer the questions on the page, and it will show you how much you could be saving.
That’s it. You’ll likely be saving a bunch of money. Here’s a link to give it a try.
Consistently being in debt
If you’ve got $10K+ in debt (credit cards…medical bills…anything really) you could use a debt relief program and potentially reduce by over 20%.
Here’s how to see if you qualify:
Head over to this Debt Relief comparison website here, then simply answer the questions to see if you qualify.
It’s as simple as that. You’ll likely end up paying less than you owed before and you could be debt free in as little as 2 years.
Missing out on free money to invest
It’s no secret that millionaires love investing, but for the rest of us, it can seem out of reach.
Times have changed. There are a number of investing platforms that will give you a bonus to open an account and get started. All you have to do is open the account and invest at least $25, and you could get up to $1000 in bonus.
Pretty sweet deal right? Here is a link to some of the best options.
Having bad credit
A low credit score can come back to bite you in so many ways in the future.
From that next rental application to getting approved for any type of loan or credit card, if you have a bad history with credit, the good news is you can fix it.
Head over to BankRate.com and answer a few questions to see if you qualify. It only takes a few minutes and could save you from a major upset down the line.
How to get started
Hope this helps! Here are the links to get started:
Have a separate savings account
Stop overpaying for car insurance
Finally get out of debt
Start investing with a free bonus
Fix your credit
There’s a cost for each user to operate an online service. I suspect that you are working on the assumption “it’s just another login”, but that’s inaccurate.
The costs of running a large membership site are considerable, and many of those costs go up with each additional user. For example:
- Storage space
- Bandwidth / connectivity while the user is using the service
- Processing power while the user is using the service
- Customer service / support
- Licences
- Reporting and compliance
- There may be a bunch more
Obviously , it’s going to depend on the exact service, but say this costs $2 per user per month. That w
There’s a cost for each user to operate an online service. I suspect that you are working on the assumption “it’s just another login”, but that’s inaccurate.
The costs of running a large membership site are considerable, and many of those costs go up with each additional user. For example:
- Storage space
- Bandwidth / connectivity while the user is using the service
- Processing power while the user is using the service
- Customer service / support
- Licences
- Reporting and compliance
- There may be a bunch more
Obviously , it’s going to depend on the exact service, but say this costs $2 per user per month. That would actually be pretty low.
On top of this, you need to fund the ongoing development, marketing, legal and all the other costs. Some of those costs are fixed, while others will jump up for each additional country or territory you add. Which means if you want 10 times the number of users, it might cost you a lot more money than your existing small number of users paying more.
And lastly, businesses are out to maximise profits. That is in their very nature. They will have done tests to determine the price point that maximises profit, which may be lots of customers at low margin, few customers at high margin, or somewhere in between.
You decry corporate greed as if it’s a surprise. Every for profit company exists to maximise profit. It’s entirely expected.
I come from the Windows application world of thinking, where we find the free program or application to do the job, or we do without. That’s been the case since Windows 98. It’s like trying to tell me that the market price for something I can do on my computer is now greater simply because it’s a phone.
If you think that’s true, go and create your own version, and sell it for a one time fee, undercutting them. If you are correct, and your app provides the same level of service, you will get all the customers of the other app, and have a really successful business.
I suspect you will very rapidly find it is considerably more expensive than you assumed.
Apps are really pretty expensive to build. Even a simple one will be somewhere around £100k by the time you have built, tested and deployed it. It’s really difficult to get it to work well on the massive variety of devices, locations and OSs. Then
If you think that’s true, go and create your own version, and sell it for a one time fee, undercutting them. If you are correct, and your app provides the same level of service, you will get all the customers of the other app, and have a really successful business.
I suspect you will very rapidly find it is considerably more expensive than you assumed.
Apps are really pretty expensive to build. Even a simple one will be somewhere around £100k by the time you have built, tested and deployed it. It’s really difficult to get it to work well on the massive variety of devices, locations and OSs. Then, you generally have to spend about the same to let people know about it, as there are so many apps in the app store you will just be lost without a strong marketing campaign.
Building an app is also not a one-off thing. They need constant updates and support to keep up with changes to the hardware and software users run them on. You need customer support, marketing, accounts, admin and lots more just to keep them working. And that’s without making any actual updates.
For customers, most might baulk at the £50 or more cost if they paid a reasonable share of that plus a profit margin, plus the App store costs (about 40% from memory). But if that’s £5 a month, it’s a lot more reasonable. Especially if people can use it for a few months, and then stop.
And that’s before you account for all the apps that do not go well, and few people use. There is still money sunk into those, and a company that does not cover that from the income from their best sellers will go out of business fast.
But you will probably not believe me until you try and actually create an app, and realise just how time consuming and expensive it is.
Here’s the thing: I wish I had known these money secrets sooner. They’ve helped so many people save hundreds, secure their family’s future, and grow their bank accounts—myself included.
And honestly? Putting them to use was way easier than I expected. I bet you can knock out at least three or four of these right now—yes, even from your phone.
Don’t wait like I did. Go ahead and start using these money secrets today!
1. Cancel Your Car Insurance
You might not even realize it, but your car insurance company is probably overcharging you. In fact, they’re kind of counting on you not noticing. Luckily,
Here’s the thing: I wish I had known these money secrets sooner. They’ve helped so many people save hundreds, secure their family’s future, and grow their bank accounts—myself included.
And honestly? Putting them to use was way easier than I expected. I bet you can knock out at least three or four of these right now—yes, even from your phone.
Don’t wait like I did. Go ahead and start using these money secrets today!
1. Cancel Your Car Insurance
You might not even realize it, but your car insurance company is probably overcharging you. In fact, they’re kind of counting on you not noticing. Luckily, this problem is easy to fix.
Don’t waste your time browsing insurance sites for a better deal. A company called Insurify shows you all your options at once — people who do this save up to $996 per year.
If you tell them a bit about yourself and your vehicle, they’ll send you personalized quotes so you can compare them and find the best one for you.
Tired of overpaying for car insurance? It takes just five minutes to compare your options with Insurify and see how much you could save on car insurance.
2. Ask This Company to Get a Big Chunk of Your Debt Forgiven
A company called National Debt Relief could convince your lenders to simply get rid of a big chunk of what you owe. No bankruptcy, no loans — you don’t even need to have good credit.
If you owe at least $10,000 in unsecured debt (credit card debt, personal loans, medical bills, etc.), National Debt Relief’s experts will build you a monthly payment plan. As your payments add up, they negotiate with your creditors to reduce the amount you owe. You then pay off the rest in a lump sum.
On average, you could become debt-free within 24 to 48 months. It takes less than a minute to sign up and see how much debt you could get rid of.
3. You Can Become a Real Estate Investor for as Little as $10
Take a look at some of the world’s wealthiest people. What do they have in common? Many invest in large private real estate deals. And here’s the thing: There’s no reason you can’t, too — for as little as $10.
An investment called the Fundrise Flagship Fund lets you get started in the world of real estate by giving you access to a low-cost, diversified portfolio of private real estate. The best part? You don’t have to be the landlord. The Flagship Fund does all the heavy lifting.
With an initial investment as low as $10, your money will be invested in the Fund, which already owns more than $1 billion worth of real estate around the country, from apartment complexes to the thriving housing rental market to larger last-mile e-commerce logistics centers.
Want to invest more? Many investors choose to invest $1,000 or more. This is a Fund that can fit any type of investor’s needs. Once invested, you can track your performance from your phone and watch as properties are acquired, improved, and operated. As properties generate cash flow, you could earn money through quarterly dividend payments. And over time, you could earn money off the potential appreciation of the properties.
So if you want to get started in the world of real-estate investing, it takes just a few minutes to sign up and create an account with the Fundrise Flagship Fund.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Real Estate Fund before investing. This and other information can be found in the Fund’s prospectus. Read them carefully before investing.
4. Earn Up to $50 this Month By Answering Survey Questions About the News — It’s Anonymous
The news is a heated subject these days. It’s hard not to have an opinion on it.
Good news: A website called YouGov will pay you up to $50 or more this month just to answer survey questions about politics, the economy, and other hot news topics.
Plus, it’s totally anonymous, so no one will judge you for that hot take.
When you take a quick survey (some are less than three minutes), you’ll earn points you can exchange for up to $50 in cash or gift cards to places like Walmart and Amazon. Plus, Penny Hoarder readers will get an extra 500 points for registering and another 1,000 points after completing their first survey.
It takes just a few minutes to sign up and take your first survey, and you’ll receive your points immediately.
5. Get Up to $300 Just for Setting Up Direct Deposit With This Account
If you bank at a traditional brick-and-mortar bank, your money probably isn’t growing much (c’mon, 0.40% is basically nothing).
But there’s good news: With SoFi Checking and Savings (member FDIC), you stand to gain up to a hefty 3.80% APY on savings when you set up a direct deposit or have $5,000 or more in Qualifying Deposits and 0.50% APY on checking balances — savings APY is 10 times more than the national average.
Right now, a direct deposit of at least $1K not only sets you up for higher returns but also brings you closer to earning up to a $300 welcome bonus (terms apply).
You can easily deposit checks via your phone’s camera, transfer funds, and get customer service via chat or phone call. There are no account fees, no monthly fees and no overdraft fees. And your money is FDIC insured (up to $3M of additional FDIC insurance through the SoFi Insured Deposit Program).
It’s quick and easy to open an account with SoFi Checking and Savings (member FDIC) and watch your money grow faster than ever.
Read Disclaimer
5. Stop Paying Your Credit Card Company
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape… but a website called AmONE wants to help.
If you owe your credit card companies $100,000 or less, AmONE will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmONE rates start at 6.40% APR), you’ll get out of debt that much faster.
It takes less than a minute and just 10 questions to see what loans you qualify for.
6. Lock In Affordable Term Life Insurance in Minutes.
Let’s be honest—life insurance probably isn’t on your list of fun things to research. But locking in a policy now could mean huge peace of mind for your family down the road. And getting covered is actually a lot easier than you might think.
With Best Money’s term life insurance marketplace, you can compare top-rated policies in minutes and find coverage that works for you. No long phone calls. No confusing paperwork. Just straightforward quotes, starting at just $7 a month, from trusted providers so you can make an informed decision.
The best part? You’re in control. Answer a few quick questions, see your options, get coverage up to $3 million, and choose the coverage that fits your life and budget—on your terms.
You already protect your car, your home, even your phone. Why not make sure your family’s financial future is covered, too? Compare term life insurance rates with Best Money today and find a policy that fits.
Some do it just to get rid of ads on page.
That might be enough to pay a fee.
I have a Disney+ membership and it is worth it to me to be able to see entertainment that I enjoy without fussing with videos. But I do that too, as streaming services have limits.
There are Sam’s Club and Costco fans, too. Some need these services if they run a club or business.
You can get by with minimal fees and accept what you can get for free. You can visit Digital Library of Free & Borrowable Books, Movies, Music & Wayback Machine for what you can see in the link. That might be enough for you.
But if you are a supe
Some do it just to get rid of ads on page.
That might be enough to pay a fee.
I have a Disney+ membership and it is worth it to me to be able to see entertainment that I enjoy without fussing with videos. But I do that too, as streaming services have limits.
There are Sam’s Club and Costco fans, too. Some need these services if they run a club or business.
You can get by with minimal fees and accept what you can get for free. You can visit Digital Library of Free & Borrowable Books, Movies, Music & Wayback Machine for what you can see in the link. That might be enough for you.
But if you are a superfan of anything, fees don’t matter anymore, in fact they are gladly paid.
No one cares what business model you choose. If you started a business what model would you choose? You can be completely open source and free if you want. And then accept donations to keep it going.
With cryptocurrency it is possible to have an open ecosystem where you play and earn at the same time. So games, free or paid, are worth your time then. If this interests you please type “Enjin” in search box. (Steam is getting this already.)
As per the Emma app site and an article by Ainsley Binton dated August 1, 2023 entitled: ‘Subscription vs One-time purchase’, the following is stated: “Both subscription and one off purchase models offer a number of pros and cons for different reasons that are important for both businesses and consumers to consider.
Subscription Model
- Cost-Effective Access to Premium Products: Subscription models often offer access to premium products and services that would otherwise be expensive to purchase outright. This affordability enables consumers to enjoy higher-tier offerings.
- Convenience and Automation
As per the Emma app site and an article by Ainsley Binton dated August 1, 2023 entitled: ‘Subscription vs One-time purchase’, the following is stated: “Both subscription and one off purchase models offer a number of pros and cons for different reasons that are important for both businesses and consumers to consider.
Subscription Model
- Cost-Effective Access to Premium Products: Subscription models often offer access to premium products and services that would otherwise be expensive to purchase outright. This affordability enables consumers to enjoy higher-tier offerings.
- Convenience and Automation: Subscribers benefit from automatic renewals and access to new features or content without having to take additional steps or make repeated purchases.
- Bundle and Customization Options: Many subscription services offer bundle options or customization features, allowing consumers to choose plans that suit their individual needs and preferences.
One-Time Purchase Model
- Freedom and Flexibility: One-time purchases offer consumers the freedom to choose when and where to buy a product or service without any contractual obligations.
- No Long-Term Commitment: Consumers can avoid long-term commitments, making it easier to switch to different brands or products if they find better options.
- No Accumulating Costs: Without recurring subscriptions, consumers avoid the risk of accumulating costs from multiple services they might not fully utilize.”
See more in the article.
The product version of that is called handle and razor. They offer the handle, and sell the modular razors. Businesses, like, for shoes, can make modular upgrades to components. That can be a few upgraded until they reached the limitation of the chassis. Upgradeable PCs are the same idea.
Handle and razor concept is very effective. Very good for businesses for repeat sales(buy more upgrade modules, and also from brand loyalty), and earning brand loyalty(they grown trust, and nostalgia for the brand). It’s also great for up sale and cross sales(old operational modules can be used in other produc
The product version of that is called handle and razor. They offer the handle, and sell the modular razors. Businesses, like, for shoes, can make modular upgrades to components. That can be a few upgraded until they reached the limitation of the chassis. Upgradeable PCs are the same idea.
Handle and razor concept is very effective. Very good for businesses for repeat sales(buy more upgrade modules, and also from brand loyalty), and earning brand loyalty(they grown trust, and nostalgia for the brand). It’s also great for up sale and cross sales(old operational modules can be used in other products). Plus, it’s cheaper to manufacture(less types of parts to make, and more wholesale), and also cheaper to develop(less type of parts to develop).
Handle and razor(for hardware) or subscription model(for software) are very compelling. Freemium(for software) is another great way to provide free software, and when users are familiar and trusting, they will buy the paid versions.
A yearly subscription is literally one lump sum 💥 it’s done dusted and PAID in full until next year. Money in the bank!
Monthly payment runs more risk in the sense that..
Sometimes the bills aren’t paid on time or not at all.
Sometimes they can be cancelled by the bill payer without warning and therefore cause loss of revenue.
The system and Staff hired to monitor those subscriptions are part of the percentage of the subscription fee because well they need money to survive as well and systems maintained!
Youre paying for the privilege of having a monthly subscription. Simply because Ideally compa
A yearly subscription is literally one lump sum 💥 it’s done dusted and PAID in full until next year. Money in the bank!
Monthly payment runs more risk in the sense that..
Sometimes the bills aren’t paid on time or not at all.
Sometimes they can be cancelled by the bill payer without warning and therefore cause loss of revenue.
The system and Staff hired to monitor those subscriptions are part of the percentage of the subscription fee because well they need money to survive as well and systems maintained!
Youre paying for the privilege of having a monthly subscription. Simply because Ideally companies want it in one go!
The best freelance digital marketers can be found on Fiverr. Their talented freelancers can provide full web creation, or anything Shopify on your budget and deadline. If you’re looking for someone who can do Magento, Fiverr has the freelancers qualified to do so. If you want to do Dropshipping, PHP, or, GTmetrix, Fiverr can help with that too. Any digital marketing help you need Fiverr has freelancers qualified to take the reins. What are you waiting for? Start today.
The reason is the due date. Monthly subscriptions become liable monthly. When the payments are also done monthly the settlement of liability takes place on the due date.
In annual subscriptions the liability arises annually. When payments are made monthly thay become advance payments because the monthly payments are done without an obligation. Therefore if the recepient account for income on a monthly basis the receipient should offer a rebate to the payer. This is applicable for the first 11 months. Therefore these payments are cheaper.
However in certain situations the monthly payments in resp
The reason is the due date. Monthly subscriptions become liable monthly. When the payments are also done monthly the settlement of liability takes place on the due date.
In annual subscriptions the liability arises annually. When payments are made monthly thay become advance payments because the monthly payments are done without an obligation. Therefore if the recepient account for income on a monthly basis the receipient should offer a rebate to the payer. This is applicable for the first 11 months. Therefore these payments are cheaper.
However in certain situations the monthly payments in respect of annual obligations are not recognized as income by the receipient. In such situations these monthly payments are recorded as liabilities or advances received and taken credit for income at the end of the year. Therefore in these situatiotions no rebates are offered since payments are made volantarily by the payer and accordingly they are not cheaper.
I'm assuming you're talking about people that rent things like routers from their cable company instead of just buying one or even people who pay monthly for Amazon Prime instead of the annual plan.
Often, it's out of necessity. They simply don't have the $100+ cash to pay the lump sum, but they do have $15/month.
Probably not. Why?
Because what you receive in a subscription service is not available anywhere else.
While you may pay monthly, you also receive products, services, or information monthly.
It’s similar to your electric bill. That is essentially the same model. You pay a monthly fee and get electricity. You can stop anytime. But you continue to get a valuable service. Your phone is the same.
A subscription for a company continues as long as you want to use that product, service, or information.
I have never seen the products, services, or information sold by subscription available anywhere else for
Probably not. Why?
Because what you receive in a subscription service is not available anywhere else.
While you may pay monthly, you also receive products, services, or information monthly.
It’s similar to your electric bill. That is essentially the same model. You pay a monthly fee and get electricity. You can stop anytime. But you continue to get a valuable service. Your phone is the same.
A subscription for a company continues as long as you want to use that product, service, or information.
I have never seen the products, services, or information sold by subscription available anywhere else for ‘cheaper’. So there is no ‘long run’.
Hope that clears it up for you!
AAA road service. At a cost of only a few dollars per year, they will come to your assistance where ever your car breaks down. The first time we used them was when my wife had a flat tire on a very busy and narrow freeway. The told her to get back in the car and they came and changed the tire for her. Very dangerous. I just used them again with another flat tire. I cannot change tires anymore. The
AAA road service. At a cost of only a few dollars per year, they will come to your assistance where ever your car breaks down. The first time we used them was when my wife had a flat tire on a very busy and narrow freeway. The told her to get back in the car and they came and changed the tire for her. Very dangerous. I just used them again with another flat tire. I cannot change tires anymore. They have also brought us more gas when we were...
Apps that rank in the top of the charts receive a huge advantage because of their visibility. This creates a large advantage to be listed at the top. Since the main chart is computed based on "sales" not revenue this caused a race to the bottom as developers discovered that they could make more by pricing apps cheaper. This technique initially propelled a lot of apps up the charts as developers discovered they could make more with a $0.99 app then with a $4.99 app.
This in turn created user-expectations of getting high-end software for very low prices and this has continued to date. This act
Apps that rank in the top of the charts receive a huge advantage because of their visibility. This creates a large advantage to be listed at the top. Since the main chart is computed based on "sales" not revenue this caused a race to the bottom as developers discovered that they could make more by pricing apps cheaper. This technique initially propelled a lot of apps up the charts as developers discovered they could make more with a $0.99 app then with a $4.99 app.
This in turn created user-expectations of getting high-end software for very low prices and this has continued to date. This actually creates a huge platform advantage for Apple as it's harder to make as much money from any other platform (Android/Windows/BlackBerry) because while the customer price expectation is still there the volume isn't. Apple did introduce a "top-grossing" application list and this has perhaps offset things a little bit but not enough to make a significant difference.
The new version of the App Store (iOS6) has arguably hurt discoverability and comparison shopping because search is poor. This may allow apps to successfully market themselves at higher prices without worrying about customers finding a cheaper alternative via browsing.
Original question: Why are yearly subscriptions cheaper than monthly subscriptions?
For one thing it actually costs less and makes it easier to plan how many copies to print further in advance.
If a publishing company sells 200,000 copies of each magazine, newspaper or publication it produces, but 100,000 are annual subscriptions, then they are guaranteed to sell those 100,000 copies for a full year so they know they need to print at least 70,000 copies each time for a year. The 100,000 other could be a combination of monthly subscriptions and newsstand copies. So to make it simple divide it in
Original question: Why are yearly subscriptions cheaper than monthly subscriptions?
For one thing it actually costs less and makes it easier to plan how many copies to print further in advance.
If a publishing company sells 200,000 copies of each magazine, newspaper or publication it produces, but 100,000 are annual subscriptions, then they are guaranteed to sell those 100,000 copies for a full year so they know they need to print at least 70,000 copies each time for a year. The 100,000 other could be a combination of monthly subscriptions and newsstand copies. So to make it simple divide it in two, 50,000 copies guaranteed until the end of the month and 50,000 with no guarantee at all. They still need to pay operating costs for equipment and staff capable of printing 200,000 copies, but are only guaranteed sales of 100,000 after the month ends.
The overwhelming consensus over the last 10–20 years is to create subscriptions or similar “recurring revenue”. If you produce a product/service that people will value, and if you are committed to a long-term relationship with your customers that includes long-term expenditure within your business for your customers’ benefit, I’d strongly recommend you go for some form of subscription model.
There are countless subscription services in the market today and finding one that provides true value can sometimes be difficult.
Here is what I use and recommend to all of my immediate friends.
MentorBox - This is a subscription service that provides priceless information every single month. This was created by internet marketer Tai Lopez in an attempt to spread the idea of reading books again to as many people as possible. With the emergence of technology in our everyday lives, it is easy to get disconnected from reading even though books provide astronomical return on investment.
DollarShaveC
There are countless subscription services in the market today and finding one that provides true value can sometimes be difficult.
Here is what I use and recommend to all of my immediate friends.
MentorBox - This is a subscription service that provides priceless information every single month. This was created by internet marketer Tai Lopez in an attempt to spread the idea of reading books again to as many people as possible. With the emergence of technology in our everyday lives, it is easy to get disconnected from reading even though books provide astronomical return on investment.
DollarShaveClub - I use this religiously, it saves me money on razors, prevents a shopping trip, and keeps my manscaping up to date. Dollar Shave Club is ridiculously popular and rightfully so. It’s not really a dollar but still a huge bang for your buck deal.
Audible - I pay a flat monthly fee in return for tokens that I can use to purchase books on their platform. I love audio books, they make it easy for me to learn while on the go. I use Audible in the gym and throughout daily activities to keep my brain engaged.
StitchFix - I have terrible style, but because of this box, I am starting to grasp the idea behind today's fashion trends. Stitch Fix keeps me in the latest fashion and it keeps me looking good. Big recommendation here.
I am a big believer in the idea that when you look good you feel good.
I also believe that you should use every day as an opportunity to learn something new. Bettering yourself by only %1 everyday will make an astronomical impact on who you are just 1 year from now.
Hope this helps, I always push saving money on anything that you can so out of this list I would say just go for Audible and MentorBox, the info you receive will pay for itself 1000x.
Good luck and god speed.
Purely due to greed. Software companies can increase their revenues by orders of magnitude by going to subscriptions, and they can do it with less effort than for one-time licensing. As long as it remains legal, they’ll continue with it.
How do you determine if a digital subscription is worth the cost?
My equation is:
50 cents per hour of destination content
25 cents per hour of active viewing content
10 cents per hour of passive viewing content
-2 cents per minute of ads
(Per Person)
When it comes to the services we currently have, I can look at the actual use and ahead at the announced releases to determine if I should keep it.
Wh
How do you determine if a digital subscription is worth the cost?
My equation is:
50 cents per hour of destination content
25 cents per hour of active viewing content
10 cents per hour of passive viewing content
-2 cents per minute of ads
(Per Person)
When it comes to the services we currently have, I can look at the actual use and ahead at the announced releases to determine if I should keep it.
When it comes to the services we don’t have, I consider all the originals and exclusives that have dropped since...
I am sole member but also president of the local lone wolf club; but, what I hear on the street is….
I HATE the subscription model! I have considered both the Microsoft office personal use kind and the adobe photoshop one AND will always prefer to buy once and use until day after doomsday.
That’s it.
The choice between lifetime purchases and subscription-based purchases for software and online services depends on individual preferences and specific circumstances. Lifetime purchases offer the advantage of a one-time payment and the ability to use the software or service indefinitely without ongoing costs. However, they may not include future updates or customer support. Subscription-based purchases provide regular updates, customer support, and sometimes additional features, but require ongoing payments. The better option depends on factors such as the frequency of updates, the need for sup
The choice between lifetime purchases and subscription-based purchases for software and online services depends on individual preferences and specific circumstances. Lifetime purchases offer the advantage of a one-time payment and the ability to use the software or service indefinitely without ongoing costs. However, they may not include future updates or customer support. Subscription-based purchases provide regular updates, customer support, and sometimes additional features, but require ongoing payments. The better option depends on factors such as the frequency of updates, the need for support, and long-term usage plans.
TLDR: it depends.
What are some common needs or expenses that you encounter often? Is it more efficient to go to a provider that can solve those needs at less expense to you than you going it alone?
From my own experience:
- AAA Roadside Assistance. Daily, I ride either a bicycle, a ‘77 F150 (my first car, BTW), a ‘69 MGB or a ‘99 Jaguar XJ8. I purchase the highest plan AAA offers as it provides 4 free tow services annually, and most years I hit that number. I don’t carry a spare tire in the Ford or the MG so if I have a flat it’s easiest to get a tow home and solve the problem safely in my drivewa
TLDR: it depends.
What are some common needs or expenses that you encounter often? Is it more efficient to go to a provider that can solve those needs at less expense to you than you going it alone?
From my own experience:
- AAA Roadside Assistance. Daily, I ride either a bicycle, a ‘77 F150 (my first car, BTW), a ‘69 MGB or a ‘99 Jaguar XJ8. I purchase the highest plan AAA offers as it provides 4 free tow services annually, and most years I hit that number. I don’t carry a spare tire in the Ford or the MG so if I have a flat it’s easiest to get a tow home and solve the problem safely in my driveway rather than at the roadside. I could even have AAA change my spare at the roadside (and I have) but it just doesn’t seem right to pay insurance to put someone else’s life in danger when a simple tow would be the safest. For me, the annual expense it automatic. It’s a no brainer. But for someone with a single car, brand new, I imagine they wouldn’t see the value in roadside assistance.
- My business partner uses Rent the Runway. She works with high net worth and UHNW individuals on a regular basis and this often requires appearances at social gatherings, where wearing the same outfit twice, or (gulp) the same outfit as someone else would be an absolute travesty. So a different dress for each occasion and the confidence going in that the odds of someone else wearing the dress is VERY slim makes her subscription service a no brainer. For me, it would be an inefficient use of funds.
- Is insurance a subscription service? Because I wouldn’t think twice about insuring my home, automobiles, business and personal liabilities. Worth every penny if it’s a quality insurance provider.
- For some people, a home security system with subscription service helps them sleep better at night.
- For other people, a Netflix subscription helps them stay up to date on the latest whatever so they’re not embarrassed “at the water cooler” the next day at work.
- For an investor, I would imagine The Wall Street Journal and Barron’s would be de rigeur.
So yes, it depends on who can provide a service more cost efficiently than you can obtain by yourself.
Because the app/website/game is created by a business, to make a profit. They have clearly decided that having a subscription model is better than alternative revenue streams, like advertising or one-off purchases.
Many people buy it because it’s worth it to them. It might not be to you, but it is to them.
If enough people think it’s worth it, the business succeeds. If not enough think it is worth it, it fails. That’s how capitalism works.
Have you ever bought a larger quantity size of a grocery store item. If you do, you will find a 20 pound bag of flour is cheaper per ounce than a 2 pound bag.
The larger quantity is cheaper for the producer so they share that savings with buyers.
The same concept applies to subscriptions. So, just like the flour, the more you buy, the cheaper the unit pricing, in this case the price per month.
1) come up with an idea
2) develop the software to register your members--I would recommend using a company/program like Infusionsoft to be able to keep in touch with your members
3) find a third part to charge your members monthly. There are many compliance (PCI compliance) issues you don't want to deal with that a company like Authourize.net can handle for you.
As a side note, we have a subscription program. I am guesstimating that 15% - 20% of our cards were cancelled, and hence we are getting declines due to the recent Target credit card debacle. No fun
I am all about creating recurring revenue. It is lower in cost to keep a customer than to find a new one. Also, if you want to create value that allows you to sell your business, recurring revenue is like gold.
For the following reasons:
- Because you are making a commitment beyond a month,
- You typically pay in advance for the annual subscription,
- The vendor has less handling costs (time and actual expenses) from processing 12 payments,
This consumer loathes the subscription model, particularly for software where there is both a massive up front cost, and an ongoing subscription requirement.
I don’t know what a subscription box is. If you will leave a comment informing me I will try to have an answer.
I would say this:
The rate hike from $11 to $13 dollars a month isn't much, but adding a nearly 20% price increase when you know the value of your product will greatly diminish in the very near future is bold.
Why the Netflix Price Hike Makes Sense
While most people probably shrugged off the slight increase, not many of them know about the launch of a bunch of new streaming services coming over the next couple years that have a very big chance of putting Netflix out of business… or at least causing them to pivot their model and drastically lower their cost. Production companies are pulling their
I would say this:
The rate hike from $11 to $13 dollars a month isn't much, but adding a nearly 20% price increase when you know the value of your product will greatly diminish in the very near future is bold.
Why the Netflix Price Hike Makes Sense
While most people probably shrugged off the slight increase, not many of them know about the launch of a bunch of new streaming services coming over the next couple years that have a very big chance of putting Netflix out of business… or at least causing them to pivot their model and drastically lower their cost. Production companies are pulling their content, and they are going to compete directly with Netflix.
As much as I do enjoy Netflix content, I believe they raised their price because they know this may be their last chance to do so.
They may have well raised the price to $100 a month just to see who would still pay it. I predict that by the end of 2020, Netflix is going to have to be a lot cheaper, or they may just go away.
Jason Criddle's answer to How much is Netflix raising the standard plan price (2019)? And why?
Free apps are usually ad supported, so maybe if ad revenue is drying up a bit or is more difficult to implement due to increasing privacy restrictions, developers are turning away from ads and more to subscription for their revenue. Most developers don’t just develop apps for the fun of it - they also want to get paid for their hard work.
Why use subscription-based app models? In this revenue model, users pay a monthly fee to access your app, and, in return, are offered new content and incentivizing features on an ongoing basis. These apps have become super popular over the last couple of years.
$120 seems like a pretty good chunk of money, $10 a month is no big deal.
Psychologically.
Personally I prefer to pay on a daily basis, in cash, in this case, just under 33 cents, I pay in pennies, I tell them to keep the change.