SaaS LTD Dilemma
Considering selling your product as a Life Time Deal (LTD)? Here's a quick look into the opportunities and challenges that come with it.
Selling your product for a fixed price, the user can use it for a lifetime (lifetime of the company). The prices for SaaS LTDs stay around $49 to $149 based on the product type and deal terms.
Some of the platforms that bring LTDs are AppSumo, PitchGround, etc. Many Facebook groups help launch LTDs for you for their followers, and some of these groups have more than 100K followers. So, overall it can drive some good revenue for you if your product solves a good problem that the audience is interested in.
But the only catch here is - most of these platforms charge 70% of the sales and give you only 30% of the revenue. If you make $100K in sales, you get only $30K. It's still a good deal as these platforms do the heavy lifting for you, and you get some early users for your product.
But there are also some disadvantages to this approach.
- If your product is still not mature, you will see people reporting all over the place, which may damage your product sales later.
- You will see a heavy influx of sales during the LTD promotion time, and if you have no support staff, this might get too overwhelming with a lot of time going into support and answering queries.
- If you ever need to sell your company, the LTD user base could still be a liability as there is no new revenue from this user base.
The plus side of LTDs:
- You can grow an early userbase
- You get a lot of feedback from early users
- You get traction (assuming the product/feedback is good)
- You get some money that you can reinvest back into the product
If you're wondering whether you can offer your product with lifetime access, note that in most cases, 70% of users who purchase LTDs never actually use them. That's the type of audience who buy LTDs. But again, this is only an observation from usual LTD discussions.
So, what's your take on it ?
This is one of the most common questions we get at Micro SaaS HQ where we discuss several topics around SaaS.
I didn't know that they take 70% of your income, of course that's a lot, then you will have to add what they take away from you in taxes.
As a way to advertise and get traction on your product it can be a good option, anyway you could offer a limited amount of subscriptions and then offer others on your website, right?
That way you could get more margins, which of course, I don't know how ethical it is.
Another thing I don't see well is that you have to take care of all the customer service. With udemy for example something similar happens, they keep a lot of porcetaje and you have to take care of answering comments, questions, etc. ... In short, a lot of time for what you earn.
Best regards and have a nice day !