Hey there, I'm the founder of a site that helps families keep in touch. We're going to be buying our cash register soon, so we're figuring out our revenue model.
We're deciding between two types of incoming revenue: $40 a year or $3-5 a month. Pros and cons:
$40 a year
- pro: lock-in price paid yearly
- con: tough payment to stomach
- con: recurring billing probably isn't something we'd want to do ($40 charge is a big one)
- pro: small charge that can be easily justified to the user
- pro: recurring billing easy, and it also makes sense (recurring billing for yearly is evilish)
- pro: refunds easy
- pro: $3-5 charge not a lot on a credit card statement
- pro: constant stream of revenue
- con: they can cancel their plan in the middle of a year
- con: more fees paid on every transaction vs. one big one a year
There's also the option of both.