One-time payments as a viable business model
Subscription payments and MRR are overrated
The one-time payment business model is something I’ve been leaning more and more towards too.
Don’t know if it’s people having subscription fatigue, or that it just makes more sense for my type of products, but I’ve been enjoying this approach. Mostly through my Carrd plugins project.
A few other indie hackers seem to be making the move too:
Some reasons why I’m moving to one-time payments:
The effort is more upfront, but the recurring effort seems less. Definitely feel like it has less commitment.
It’s more transactional in nature. Pay, deliver and mutual obligations are done, most of the time. Sometimes, some customers need some support and help. But so far—at least for my plugins—it’s in the minority than majority. (Side-note: Getting lots of support requests is also a sign that you might need to improve your product or onboarding or documentation)
You capture the lifetime value (LTV) of a customer upfront. Some say, monthly recurring revenue (MRR) is simply LTV in instalments. In some ways, it’s not wrong! With MRR, someone churns midway and you capture less of the LTV.
With some types of products like ebooks and digital downloads, you can really leverage the build once, sell thrice approach. You might not even need to constantly update or add new features to the product (unlike for say, SaaS).
Instead of building new features, you might have to build more products and have provide tiered offerings. Which is something that suits me great because I enjoy variety!
We don’t always need to acquire completely new customers (higher costs of acquisition) every month if you have a spectrum of offerings. Returning customers buying upgrades or cross-sells are a viable strategy too.
It feels refreshing to get one-time payment because everyone’s going to subscriptions model, even for a car! Perhaps this is betting against subscription fatugue or a novelty factor.
One-time payments makes it easier for impulse buys. It’s a weird bias where we hesitate over a $9/month subscription but don’t think twice over a $100 one time payment. I wonder if it’s tied to how we struggle more with being able to predict our preferences over a longer time span versus something bought and paid for right here right now.
What other reasons do you think makes one-time payments a good business model to try?
Yes i love this one-time thingy when i did FAAS Fajar Siddiq As A Service. Fast & Consistence and it feels as close as Subscription Model.