Charging for a service in the “everything should be free” web world can often be a difficult task. Paul Farnell breaks it down and makes it sound sensible in How to Price Your Web Application.

Usually for web applications the costs involved are fairly minimal. It doesn’t make sense to use what’s called “cost plus” pricing — setting your prices X% higher than it costs you to deliver the service. Instead, some things can be justifiably more expensive because of the value they add, or the time they save. In our case the target customers are web designers. They might charge in the region of $30-80/hour. A Litmus account will cost them about $50/month, so as long as we’re saving them more than an hour of time each month, it’s definitely a worthwhile purchase.

This entry was posted on Thursday, September 13th, 2007 at 3:07 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.