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195

answers:

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I have written a small laptop battery meter utility for Windows that I have been selling for a low price ($7.50).

I recently was contacted by a company that wants to purchase a very large number of licenses (nearly 1,000). They would like an unlimited site license to avoid having to manage the number of licenses.

My questions is, what is a business standard model for pricing large volume licenses?

+4  A: 

No such thing as a standard model... everyone does it differently.

The art of volume discounting is figuring out how much you can get from them. Ideally 7,500... but that's unlikely. Try 15% percent off, then 25%, then 33%. Or pick your own numbers.

Part of the problem of discounting too low is that your could get eaten alive by support issues. If 10% of installs need support then you've got 100 problems to fix (say an hour each... and poof there you are working for $75/hour less your volume discount).

Assuming low overheads, I'd take $75/hour less volume discount. Unfortunately I only want to work 8 hours a day, but that's still support for 80 new users per day. Trouble is, I suspect these 1000 new users would all appear the same day, and take two weeks to clear...
Steve Jessop
That's interesting. I was thinking that a 30+% discount was common and I was planning on starting with a 33% discount ($5/license) down from there.
Chris Thompson
+1  A: 

As I understand it, part of the trick is knowing how many users there really are, as compared with how many the customer says/thinks there are. One reason a lot of companies don't offer truly unlimited licenses, is that you never know when some smart alec is going to try to buy one license to be shared by the entire population of Brazil or something.

(I have nothing against Brazil, nor have I ever been comprehensively outwitted by South Americans in a business deal. I use it as an example solely because it has a lot of people in it. More likely is that the government, or MacDonald's, or someone, will get your software for $7,500 by making it seem as though they need about 1000 seats in one department, then later "change their mind" and deploy it a million times across the whole organisation, as permitted by the unlimited license).

Steve Jessop