Charge types and models

A charge defines how your product is priced, i.e., the pricing model of your product. This is decided by the Charge type and Charge model attributes of a charge. Subskribe offers several charge type and charge model options that you can use in the supported combination that works best to price your product offerings.

When a charge is added to a plan, it sets the pricing model for that plan. A plan can have one or more charges of different charge models and charge types.

Charge types

The Subskribe platform offers the following charge types:

One time

Charge a one-time fee for a product or service that's usually purchased only once. For example, you can create a one-time fee for initial setup services for your product. This charge type is suitable for products or services that have a clear scope for how they will be delivered and used.

Recurring

Charge a recurring fee on a monthly or yearly basis. This charge type is suitable for subscription-based businesses that charge users on a recurring basis for continuous access to services.

Prepaid

Charge customers a certain price in advance of them using a product or service. This charge type provides up-front price transparency to customers and reduces risk of non-payment. This is suitable for scenarios where the customer purchases the product or service for a fixed duration or usage limit. For example, a company providing networking services can charge customers a prepaid amount of $5 to use 50 GB of data.

Usage

Charge customers based on how much they use a product or service. This charge type is suitable for utility services such as electricity or water where customers are charged based on their usage. Enterprise companies can use usage-based pricing for products or services consumed on a per-user basis, such as cloud computing services or APIs.

Percentage of

Charge a percentage of a customer's revenue gained from using your product or service. This charge type is suitable for enterprise companies that provide products or services that generate revenue for customers, such as a marketplace or a payment processing service. This type can also be used to charge a setup or support fee as a percentage of the size of an order.

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Charge models

The Subskribe platform offers the following charge models:

Flat fee

Charge a fixed, flat amount on a set schedule regardless of product usage. For example, a SaaS (Software as a Service) product license could have a $100 flat fee per month regardless of how many product features are accessed using that license. Another common use case is to charge a flat fee for initial set up services.

Per unit

Charge a fixed fee per unit of the product purchased. For example, a SaaS product license can cost $100 per month per user. If the customer wants to purchase licenses for 5 users at this per unit price, then their total cost would be $500 per month.

Block

When you define a set of tiered usage limits or "blocks" for your product, use the block pricing model to set a flat fee for each block the customer uses. This model is often used to price SaaS products that offer a service or feature whose usage can be quantified in blocks.

For example, consider the following block pricing tiers for an email marketing platform:

A customer who only wants to send 250 emails must purchase the 500-email block for $50. If a customer wants to send a total of 750 emails, they must purchase the 501-1000 emails block for $80.

Volume discount

Provide a volume discount to encourage customers to purchase larger quantities of your products. In this model, you can set pricing tiers and specify per-unit prices based the total number of units purchased in an order. Typically, the higher the number of units purchased at a time, the lower the per-unit cost.

This model can be effective for businesses selling products with low marginal or high fixed costs. Volume discounts incentivize customers to buy larger quantities which can help increase revenue and offset fixed costs.

For example, consider the following volume discount model:

If a customer wants to buy 70 units of your product, their per-unit price would be $200. However, if a customer wants to buy 320 units (or more), then their per-unit price for all of those units would be $150.

Tiered

In the tiered charge model, you can set pricing tiers based on the number of units and specify different per-unit price for each tier. The per-unit prices are applied successively starting with the first tier. Providing tiered pricing incentivizes customers to purchased additional units of your products at a more advantageous price.

For example, consider the following tiered pricing:

If a customer wants to buy 150 units of your product, the per-unit price for the first 100 units would be $200. Then, the per-unit price for the next 50 units would be $180.

Rate card lookup

In this pricing model, you can use an existing rate card when you want to price your product according to more than one purchase variable.

Rate card lookup example

Consider a SaaS enterprise that wants to price a product offering or service differently based on a combination of the following factors:

• Customer's geographic location
• Size of the customer's business
• Whether the customer is a repeat customer or not

In this example, the enterprise would've already configured a rate card containing attributes such as Location, BusinessSize, and ReturningCustomer. Let's say a small business customer in the "US-East" geography who is a repeat customer gets a unit price of $180. If the customer were brand new to the service and all other attributes are the same, they would get a unit price of $200.

The following table shows a few more combinations of these attributes and how they may be priced differently.

Supported charge type and charge model combinations

The following matrix specifies supported charge type and charge model combinations.