How should you price a SaaS you built on bought source code?
Price against the value your customer gets and what the incumbent charges — never against what the source code cost you. A $299 licence tells you nothing about what a restaurant will pay to stop losing orders. Calculate your true variable cost per customer first (gateway fees, messaging, storage, support time), pick a billing metric that grows as the customer succeeds, and set the entry price higher than feels comfortable, because raising it later is much harder than starting there.
Written by ZoopCoder, who build and sell SaaS source code. That makes us an interested party in this answer, so we have kept it to things you can verify yourself.
The numbers
Cost-plus
The pricing model to avoid
Your licence cost is sunk and irrelevant to the buyer.
3–5x
Price to variable cost, minimum
Below this, support and churn eat the margin.
Raise later
Harder than starting high
Existing customers can be grandfathered; reputations cannot.
Work out the number you must beat
Before you pick a price, calculate what one customer actually costs you every month. Most first-time operators price above hosting and below reality.
| Cost per customer, per month | Typical | Notes |
|---|---|---|
| Payment gateway on their subscription | 2–3% + fixed fee | Charged again on every renewal |
| Messaging they trigger (SMS, WhatsApp, email) | $0–$15 | The most variable line; model your heaviest user, not your average one |
| Storage and bandwidth attributable to them | $0.10–$5 | Decisive only in media-heavy categories |
| Their share of the server | Cents, at first | Genuinely small — and the reason cost-plus pricing produces absurd numbers |
| Support time | The real cost | Thirty minutes a month at your own hourly rate usually exceeds every line above combined |
Support time is why very cheap plans lose money. A $9 plan that generates one support email a month is not a business.
Choosing what to charge for
The billing metric matters more than the number. A good metric rises as the customer gets more value, is easy to predict, and cannot be gamed.
| Metric | Works well for | Watch out for |
|---|---|---|
| Per business, flat | Helpdesk, billing, form builder, QR menu | Simplest to sell; leaves money on the table with large customers |
| Per location or outlet | Retail POS, restaurants, salons | Aligns naturally with how the customer grows |
| Per seat | Anything with staff logins | Customers share logins to avoid it; enforce sessions if you use it |
| Per transaction or order | Marketplaces, delivery, payments | Excellent alignment; needs a floor so quiet months still cover costs |
| Per message or conversation | WhatsApp and SMS platforms | Essential here — a flat price on a metered upstream cost is how you lose money at scale |
| Per GB or per viewing hour | OTT and media | Only metric that survives contact with bandwidth costs |
Five rules that hold in this market
- 1. Anchor on the incumbent, not on your cost. If the hosted competitor charges $79 a month, your $29 is a positioning decision. Your $299 licence is not part of the conversation.
- 2. Three plans, and make the middle one obviously right. Most buyers pick the middle option; design it as the one you want to sell rather than as a compromise.
- 3. Charge annually where you can. It halves gateway fees, removes eleven chances to churn, and funds your hosting a year ahead.
- 4. Never price below your metered upstream. Unlimited plans on top of per-message or per-GB costs fail at exactly the moment they succeed.
- 5. Start higher than is comfortable. You can always run a discount, and you can grandfather early customers when you raise prices. Recovering from being seen as the cheap option is much harder.
Where to go next
These pages carry the detail this answer summarises.
Frequently asked questions
Should I price based on what the source code cost me?
No. That cost is sunk, it is invisible to the buyer, and it produces prices far below value — a $299 licence spread over a hundred customers implies $3 a month, which no serious business would read as a credible product.
Should I offer a free plan?
Only if you can bound its cost. A free tier that sends SMS, WhatsApp messages or video is a bill waiting to happen. A time-limited trial, or a free tier capped on the metric you pay for, gets the same acquisition benefit without the exposure.
How do I raise prices later?
Raise for new customers first and leave existing ones on their price for a defined period, then move them with plenty of notice and a clear reason. Grandfathering is cheap goodwill; a surprise increase is the most reliable way to trigger churn.
What if a competitor undercuts me?
Compete on the thing you can actually control — the vertical you understand, the language you support, the payment method that works locally, the fact that you answer support in an hour. Price wars against a funded incumbent are unwinnable for a one-person operation.
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