New Pricing

[Rick Wilson]

Re: New Pricing

Upset client,

This forum is for rational discussion. I understand you're upset but you don't appear to even be reading or considering our replies.

If you can't calm down and speak rationally, I'll end up having to delete posts and/or ban you.

I think you'll notice we're fine with people asking questions and complaining, but not rehashing the same thing while getting louder.

[Darin]

Re: New Pricing

It's an outrageous increase and yes, as someone said before, just before the holiday season. We couldn't even get 31 days notice.

Pricing by disc space and bandwidth made sense.

Can you imagine a phone company saying to a realtor, "Your minutes and data usage are well within the boundaries, but we've been listening in and hear that you've closed a few more deals lately. Your price will now go up substantially."

We use many SaaS companies, and whether they're email senders or postage companies, they're not looking at our sales. They're looking at the resources of theirs that we're using.

[Rick Wilson]

Re: New Pricing

Pricing by disc space and bandwidth made sense.

Darin,

The problem with this, is our cost structure to run our business has little or nothing to do with disc and bandwidth, so it can't work as a model.

Also I've seen a TON of SaaS companies that charge based on page views which is a proxy for revenue and we considered that model (but it's a lot harder to implement and would be just as hated).

[AaronM]

Re: New Pricing

Can you imagine a phone company saying to a realtor, "Your minutes and data usage are well within the boundaries, but we've been listening in and hear that you've closed a few more deals lately. Your price will now go up substantially."

Nailed it!

[aubreyd]

Re: New Pricing

We've been with Miva since at least 2004 with one store and added the second in 2008.

Over the last two years, we've done complete ground up rebuilds of both sites, so we've got a significant amount of capital invested into making things work in the Miva environment. Other than a few minor hiccups here and there, we've been very happy for many years with what Miva has been able to provide to us.

Last year, we swallowed the Admin Seat fees that were pushed our way because we understand that things change over time and, ultimately, $50 per month was minor.



This pricing increase, however, will take us from roughly $250 per month in hosting/bandwidth/storage/overage/seat fees for two stores to $500 with our second store just a smidgen below the $750 per month sales cutoff which will bump us to $900 per month.

No matter how you look at it, a double or quadruple increase is one hell of a jump.

Why such a huge jump from one price level to the next (80-250-750-1500)? Surely Miva's cost model doesn't have those kind of dramatic increments.


Do the value added features/benefits gained from one tier to another really justify more than doubling the fees from the preceding tier?

Are the sales figures of your customers the appropriate criteria upon which to base your rates? Are the sales figures of your customers really any of your business?

It seems rather odd that a business would base it's pricing model on the dollar volume of it's customer rather than simply pricing out their goods and services and allowing the customer to decide what they wish to purchase.

I wonder how many customers we'd have left if we charged for our products based on their income or sales volume of their businesses. I can't think of any business that functions on that basis.

As others have said already, a business doing $1M in sales may have a much lower margin than a business doing $300K in sales. Furthermore, that $1M business may only need one seat and a lower amount of storage and transfer, yet they're being forced into a higher tier plan simply based on their sales volume.

Frankly, it's insulting.

$900 per month may seem like a small amount of money to a company that has invested $50 million into the company and platform etc but to those of us who are making our living one $75 sale at a time, it's very significant.

As much as I hate to say it, we're now going to have to seriously evaluate alternate shopping cart options.

Perhaps our research will reveal that Miva's fees are indeed competitive even at these new levels. We'll see.

[Rick Wilson]

Re: New Pricing

The reason that analogy doesn't hold true is our cost structure is vast (and mostly unseen).

No one realizes the money spent to keep their sites from going down and it has almost nothing to do with Disk, Bandwidth or Seats.

Same thing goes for keeping the software secure so CC's don't get stolen, unlike Magento which I think has had 8 major security breaches this year.

This (or page views, or simply going to $2k a month across the board) were the only way to keep revenue in line with the cost structure for building a world class ecommerce platform.

[Darin]

Re: New Pricing

Rick,

Why is page views hard to implement? And why would we hate it?

[AaronM]

Re: New Pricing

... has almost nothing to do with Disk, Bandwidth or Seats.

So then the pricing increase IS targeted at those with higher sales numbers because they can 'afford it' and it is not related to the resources they use? Those of us with higher sales numbers are paying a disproportionate amount to support those with lower sales numbers. That model sounds familiar....

[Rick Wilson]

Re: New Pricing

AaronM,

No actually it has mostly to do with development resources. Where we spend our resources are on things designed to make it functional for million dollar to many multimillion dollar stores able to function.

Everything from network performance, to features in the core software, etc.... So Revenue is actually the right proxy for what we should charge.

The alternative is we'd go the Magento Enterprise route and just start our pricing at $4k a month and everyone else would have to find an alternate solution, but we don't want to go that route.

It's not feasible to both build for large sites while supporting small sites without some sort of business model that accounts for that.

[Rick Wilson]

Re: New Pricing

Why is page views hard to implement? And why would we hate it?

1. Because we're not an analytics company and don't have that data today, so I'd have to divert important development resources to a feature which the only purpose would be to change our pricing, versus spending resources building features you'll use.

2. Because we'd still aim to raise our pricing the exact same amount as we did here, so while in some cases the chips may fall differently, the net effect would be the same.

[ProCycle]

Re: New Pricing

...for building a world class ecommerce platform.

Part of being 'world class' would be working hard to retain your customer's trust. To blindside some of us with a 30 times increase in cost does not do that.

[Darin]

Re: New Pricing

1. Because we're not an analytics company and don't have that data today, so I'd have to divert important development resources to a feature which the only purpose would be to change our pricing, versus spending resources building features you'll use.

2. Because we'd still aim to raise our pricing the exact same amount as we did here, so while in some cases the chips may fall differently, the net effect would be the same.

If your goal is to increase prices that substantially, no matter what, then our suggestions of other methods of determining our usage are moot.

[BkraM]

Re: New Pricing

Also one other thing not mentioned here is this pricing change opens us up for adding true Multi-Domain support into the core software (coming very soon), so people won't be charged on a per store basis.

We have 5 sites 2 @ $79.95, 1@ $249.95, 1 @ 749.95 and the last at $1495 for a total of $2654.80. We got a quote in Feb for a dedicated server from Miva for $480 a month for all sites that has now changed to $2654.80 (without seats but we really only need 2 seats per site). We only have 4 people that are ever in any of the Admins but are getting 22 seats. Does this mean that at some point we will be charged $1495 for all 5 sites?

One other concern.. I know you are defending the revenue tier method like you defended the concurrent connection seat increase last year but the logic of determining admin usage based on max concurrent connections was flawed. It is now obvious by this new structure. I now worry that this new revenue based plan also wont generate the money you need if a high amount of people leave so when you run your numbers next year at this time there will be another change in the pricing method.

[Rick Wilson]

Re: New Pricing

BkraM,

Please email me off Forum, we need to calculate your bill a different way (the multi-site way) to get an accurate (and likely lower than you posted) price.

[jbart]

Re: New Pricing

Sounds like a tough day for a lot of us..... Personally I have been working on Miva stores since 2004 and the store I started with was on board in 1998. Talked to that store owner today and sounds like they will have no choice but to find another solution or shut the doors - and that is a store that in better times did over $5m/yr in revenue with 6 employees including only 2 Miva admins in an industry with very thin margins. Today's reality is that my store - which is currently on an $80/mth plan with 2 seats so - $130/mth or about $1500/yr and falls well within the new $80/mth plan will instead most likely by early next year be paying $1500/mth instead of per year. Last month I had 2 admin seats but definitely could have gotten by with one - there are some days we don't even log in - I average 1.5 orders per day and was hoping to up that to 2 orders per day by the middle of next year. Last month we used 1.7GB of disk space and 17GB of transfer - below the threshold of the new $80 /mth plan I would have been stoked about the new pricing since I would not have to pay for my second admin seat - and I put very little operating pressure on the Miva system - I can't remember the last time I put in a trouble ticket. However solely based on my revenue I will now be paying $18,000/year for features I don't need - that works out to about $22 per order ! I know I am not the poster child for a potential $1m+ business using Miva but there has to be some way to account for the outliers. Miva Staff please PM me if there is any alternative to looking for a new platform. I can't spend 25% of my marketing budget and $22 per transaction on a platform.