Setting a price for your wpmu service... the million dollar question.

I posted this comment in response to "Making Money with Wordpress MU - Part Deux" on wpmu.org but thought it'd be a good discussion for this forum.

My question is where is the sweet spot? What kind formula is used to figure this number out. Is it trail and error?

I myself have charged from 29 per month to $14.95 per month, with varied success.

Wordpress.com charges roughly 5.40 per month for a basic upgrade… no-ads, 5GB space, custom css, and about 7.50 per month to add a domain and mapping.

Edublogs, charges $6.95 per month for no ads, 5GB, plugins… and as low as 3.30 per month for a year subscription.

Obviously operation cost play a big part.

  • drmike

    Nice to see someone else start one of these "Let's discuss theory" threads. :slight_smile:

    From a business point of view, at the very least you need to sit down and figure out what it;s going to cost you for a month of service. Divide that by the number of users you honestly think you can get. (And I'm stressing the "honestly" part there.) And maybe add a little padding for charge fees and whatnot.

    For example, lets say you;re paying $25 a month for a basic VPS for a hundred users. In all honesty, you don't have any other costs. (You lucky SOB. You don't want to know what my bandwidth fees are.) Assume that you;re going to have 10 people sign up for the upgrade. That's simple enough. $25/10 is $2.50 a month. Bump it up to $3.50 a month to cover paypal.

    High end example: 2 servers at $165 a month. You also add in $100 a month to pay for a "cup of coffee for myself a day" as one of my clients does. That's $430 a month for costs. With 21k or so clients, lets assume that 100 are going to upgrade. Let's also assume that advertising brings in $200 a month on those sites that don't upgrade. We still have to clear $230. That's still in the $2.50 to $3.50 range.

    Now lets' figure out very high end. You're running 107 client servers, 3 Apple XServes as backup boxes, 5 routers, 5 switches, and 5 individual Gigabit lines to the net. Oh, don't forget the Quad Xeon you;re got running for your spam solution with another one in testing....

    edit: Oh just to throw this out. You may have noticed but Matt in that USAToday article mentioned that Automattic is turning a profit.

    reedit: Note that none of that assumes a profit, bank loans, ex fiancees who own or control 70% of your business, corporate or payroll taxes, etc.

  • johnnytee

    OK, been doing some research... across several niches and in my niche and it seems to be from $5 to $20 per month. So depending on your niche I don't think you want to be the most or least expensive. Previously in the past I have run a 30 day free trials and then $14.95 per month. I'm going to try free ad supported blogs with min features like edublogs and premium pricing at 9.95 per month and down to 6.95 per month for a year.

    Going to spend a dollar a day on google ads to get the work out.

    Go live is in one week. I'll keep the forum forum post on my progress.

    @DavidJohnson That's awesome.. one hell of a niche!

  • drmike

    See up there? I swear I wrote posts here this morning.

    Andrea, yup although I will point out that a few insiders have mentioned that certain arrangements have been made previously in some cases.

    I think to remember is that a place like Square(whatever it is) gives you a site that you can change pretty much anything you want for $8-$14 a month. But that gets you into features vs. niche. I can throw hundreds of features at a user who picks up the upgrade but it's all for nothing if no one takes the bait.

    You may want to also consider Project Wonderful as well. I've had some mild success with them. Plus buying the adverts helps support independents usually.

  • drmike

    Comparing it against your "competitors" and showing how you;ve got a better deal is a plus as well. :wink:

    Don't really know if that'll hook anyone in but, hey, why not?

    When you do a comparison, little things are a plus as well. For example, with wpmu, you get an actual site with a real urls. With something like elgg, you get a big long, multiple level url just to get the blog while posts are urls that are nothing but a bunch of numbers. You have a real support forum while some place like blogger doesn't even have one. You work every day on the site while someone else who I won't name is busy being a jet setting playboy every week. Stuff like that.

    We're batting around a 45 day trial with an annual price of $15-25. The sticking point is the amount of upload space as for the most part, I only provide my hosting clients a gig of space. I'm willing to give more but it;s pretty much on a case by case basis and for a decent reason.

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