Today WooThemes announced a major pricing change, and I back them 100%. There are aspects of the change that I don’t fully agree with, but I’m not privy to the numbers or other weighty factors that played into their decision, so it is not for me to begrudge them. I, too, recently underwent a pricing change in order to create a more sustainable business when I moved away from Code Canyon. I’ve been meaning to write about my move for a long time and today seems like the perfect time to finally do it.
When I first started selling WordPress plugins, I sold everything through Code Canyon, a large code marketplace from Envato. It was a wonderful experience and I truly believe that I owe a huge amount of my success and where I am today to Code Canyon.
Code Canyon allowed me to turn my first few plugin into a hobby that also happened to bring in a few dollars, then, after six months or so, it allowed me to turn selling plugins into my full time business.
There was one fatal flaw with Code Canyon, however, when it came to creating a sustainable business: it gave me zero control over pricing and updates.
According to the Envato terms, all purchases are for life, or at least for the length of time that the item purchased remains on the marketplace. While it was up to the individual item authors, this also generally meant that support was also for provided for the entire lifetime of the product.
As people much more successful and intelligent than I have explained, unlimited updates and support simply isn’t sustainable when it comes to business.
On Code Canyon, I spent a huge amount of time providing support to customers that had purchased a plugin one time, usually for $15 – $30, and then used it on a multitude of sites. I quickly realized that I was spending far more on supporting a few customers than I was making on my plugin sales. Whether I was actually going negative I’m unsure, but the margin was clearly not large enough.
I decided to move away from Code Canyon in order to create a more sustainable business.
With the move away from Code Canyon, I was able to implement a tiered pricing system and also integrate my own systems for tracking licenses, updates, and support.
When I made the move, I decided to grand father in all customers that had purchased one of my plugins within the last year and a half, so anyone that had purchased in 2012 or 2013. If a customer purchased in that time frame, I would add the plugin(s) to their account here on this site free of charge so that they could continue to get updates.
As you can imagine, I had a lot of angry customers when I told them they could not have continued access to updates since they purchased before 2012. I said the following to one customer:
Alright, the reason for not supporting purchases made prior to 2012 comes down to licensing, support, and updates. Code Canyon did not provide any way whatsoever for authors to license their work, primarily in terms of time. A standard license provides support and updates for 1 year, after which the license must be renewed if continued access to support and updates is desired.
This is the standard throughout the WordPress (and outside of WordPress) business world. For example, Gravity Forms works the same way.
A license certificate gives access to updates and support for one year though does not in any way limit how the plugin can be used. Even if you have a single site license, you can use the plugin on as many sites as you wish, but you will only receive updates and support for a single site.
With Code Canyon, a purchase was essentially a forever purchase in that there was no way for authors to limit support or updates to 1 year (or any arbitrary number). For plugins like Easy Content Types, this meant that a $30 purchase could still get updates even 5 years later, even though in that time the plugin would have dozens, if not hundreds of updates. Over a period of time like that, it’s also quite possible a plugin price would increase due to the introduction of new features.
License keys are valid for one year (in general) for a variety of reasons:
1. Forever licenses are simply not sustainable. Providing unlimited support for life on a $30 purchase is extremely expensive and will result in a business losing large amounts of money over time.
2. By renewing licenses each year (for those customers that choose to), the developer(s) can create a sustainable system where, even without a large number of new customers, new features can be created and outstanding support can be provided to the customers.
3. Unlimited support / updates actually costs developers a huge amount of money. For example, I know that I have spent at least 3-4 hours assisting you with support questions, which is perfectly fine and is one of the aspects of my business I really enjoy (helping people with questions), but if I was to continue to do so as you continue to use the plugin over the next few years, your $30 purchase from 2011 would cost me probably 10 – 20 hours of time by 2014. It should be very easy to see how that $30 purchase doesn’t create a sustainable system.
With Code Canyon’s “forever” license, this simply doesn’t work.
While it’s not very great for buyers that purchased in 2011 or earlier, I had to make a decision on where the cut off point would be when I moved away from Code Canyon.
Now, because Code Canyon did not give me anyway whatsoever to notify buyers of the move away from Code Canyon (they give no access to customer records), I have offered every past customer a discount code that they can use to renew their license at a discounted price.
I hope that makes sense and I do sincerely apologize for the inconvenience.
The particular customer I wrote this to responded with:
That does make sense now. Thanks for spelling it out.
And, small inconveniences to me aside, I’m glad you moved away from CodeCanyon.
Other customers, however, responded with anger and hate. Many of them felt personally offended that I could not continue to support and provide updates for their $30 purchase made more than 2.5 years ago.
Pricing changes happen, often to the customer’s dismay, but they are necessary for businesses to continue to provide the services they do.
Your Woo link is broke 😉
Now it’s not 😀
I believe Codecanyon/Themeforest is a good starting point if you’re new in industry. They got lots of traffics, which means free promotion for your items. However, when your business is growing very fast, moving away from CC or TF is probably the best decision – for the reasons you mentioned in this article.
As developer, I see no big problem with recurring payment since customers will pay for it anyway. However, for those who use WordPress as personal blog or just for hobby, recurring payment means they have to put extra money to renew their license for the plugins/themes.
Pippin,
I, for one, appreciate you grandfathering in CC users that purchased the plugin. I completely understand moving away and raising prices – both for you and for Woo.
In the case of Woo, while I don’t love the new setup, I do get the point of it. My only quip is that I believe people that purchased a plugin as “unlimited” should continue to be supported as such – somewhat like you did with the CC users. That would seem fair to me to people who purchased thinking they would be able to use the plugin, up-to-date, as long as it was available. That’s just my two cents.
Keep up the great posts / work / dev.
Here, here Pippin! I salute you. I think I have mentioned to you before, I always look for a Pro or premium version when making choices on new plugins for client sites. Programmers need to be compensated if we, as buyers, are expecting the functionality to keep pace. When my reputation is tied to the code I choose to place on a client’s site – It had better stay updated. Can you image me asking a client to pay an additional 10-20 hours for a replacement plugin because “the free one I chose doesn’t work anymore’?
Sure, my sites have some free plugins installed and I usually try the freemium version before buying the commercial – I try to do that just before I deliver them 🙂
Now I understand the folks charging a big number for a Life Time license while the company is getting off the ground. The cash flow helps get them going and thus better support and code going forward. This is practice or the company in general will not be sustainable, though.
Yep – still glad you moved away. 🙂
It’s easy as a customer to be confused and upset initially by pricing changes, but going this extra step to explain your reasons was all I needed to not just ‘get it’, but to completely support you in changing your business model.
There are plenty of unscrupulous businesses who change things without taking the time to explain why – perhaps it’s laziness, taking customers for granted, or something else. I can only guess. This doesn’t help customers understand, but it does often help them feel taken advantage of – and thus a little more trigger-happy and entitled when they deal with the next place they buy from.
That said, it’s not like we actually take the time to read any Terms and Conditions statements or fine print. After almost snapping at a few fantastic developers like you because I hadn’t bothered to take the time get myself up to speed on such things, I take the time now.
This also helped me understand: http://www.youtube.com/watch?v=CQSRPMFDTSs
He hasnt moved away atall, hes just ripping people off like all the customers he refuses to help.
he talks about codecanyon but yet he still sells other plugins there:
http://codecanyon.net/user/mordauk/portfolio
This post is refreshing. Although I only create custom themes and child themes from premium parents (not plugins), I have always wanted to get into creating premium themes myself. I applaud you for your honesty. I have bought a few plugins from you both on codecanyon and on your site, and I think the move you made makes total sense. Thanks for sharing!
Pippin,
I found out about Woo’s pricing changes from reading your article. Reading your article first, I agreed with your decision and support your reasons for doing so. Also, you grandfathering us semi-recent purchases was the right thing to do. We paid for a plugin with lifetime upgrades and you are honoring that.
After reading your article I jumped on over to the Woo article a bit excited that the new theme I wanted might be cheaper up front or have some all themes included subscription, a la Elegant Themes. By the time I got to the end of thier post I was severely disappointed. By the time I got through some comments, I was almost furious. Not only would that theme I wanted be $20 more upfront AND I’d have to pay annually to keep it up to date, but what I had purchased in the past was now going to cost me annually as well. Who’s supposed to cover those costs? My clients will be thrilled when I come asking for more money for stuff I already did a year or two ago.
I’m SOO glad I hadn’t invested more in the Woo platform. Those who did will now have a hefty annual cost on their hands that didn’t exist at the time they made their purchase.
In short, you did the right thing when transitioning, Woo did the wrong thing.
Lastly, to be even better, you (and Woo) should offer ALL previous purchases lifetime upgrades. I understand that support is costly. But it costs you nothing for them to click upgrade button.
I won’t argue for or against how Woo did it; I agree with their decision, just not entirely how they executed it.
One of the hurdles with giving lifetime updates all past customers is that access to updates is often granted in the same way as support, so it’s not always as simple as saying “you can update but you can’t get support”. I’m not saying that’s the case for me or for Woo (it might be), but it is definitely the case a lot of times.
I personally chose to limit upgrades and support of past customers to those who had purchased in 2012 and 2013 because I was not in control on Code Canyon. It wasn’t a simple matter of me changing my terms, but rather a matter of me defining the terms that had never previously existed.
If I had always sold through my own systems, I would never have limited the upgrades / support of past customers in the way I did, but since it was impossible for me to even define any official terms on Code Canyon, I had to create new ones when I moved.
“We paid for a plugin with lifetime upgrades and you are honoring that.”….HAHA
WHAT, LIFETIME UPGRADES, Dont think so, you will lose that after a year as pippin does not support his plugins after a year, or thats what he told me and many others??? there are many many customers, who pippin has just disregarded and does not care atall, basically rippped off, I bought all pippins plugins, not 1 but ALL, then he refuses to adhere to his agreement, so for the very few he helps including your self, there are triple amount of people who he ignores, refuses any and all, not a good person.
is this blog post supposed to make things right because he trys and get people to back him up, maybe if these people where treated like the many others he has RIPPED OFF, you wouldnt be so agreeable.
Oh yeah pippin, you wont show this reply, like all the others you have deleted, but would be nice to show you customers, what your really like.
Look out for my new plugin, every single thing you do pippin, to your plugins, I will do it better, with more features, then i will offer it for free to all your customers
The three plugins that spawned this disagreement were priced at $20, $4, and $6 when they were on Code Canyon. That’s a total of $30, of which I received maybe 60% at the time of purchase, which was nearly 3 and a half years ago.
The post above explains very well why this was unsustainable and why a cut off point had to be made.
Small note, technically Code Canyon was never a lifetime license. It was a license that gave you access up until the purchased item was removed from Code Canyon. That’s not me making things up. That’s from the Code Canyon license itself.
I’m sure you won’t believe me, but I have never deleted a single comment from this post. Surely if I approved yours I would have approved others?
Pippin,
Thanks for your detailed thought process on the licensing issue. I’ve been meaning to launch a pro version of my plugin and am still struggling to decide what would be the best route to go about it. My plan is to launch my own site to sell this plugin, but the whole issue of support is a bit daunting. I like your style of providing support for a year via a license, but for only a single site, but letting the user use the plugin on as many sites.
BTW, I plan on using Easy Digital Downloads to power the sales.
I wouldn’t worry about support, at least not as a barrier to launching. If you end up being burdened by support, that’s a good thing! It means that you’re finding success with your product.
That definitely makes sense. The free versions I offer on WordPress.org does generate a lot of support and I’m hoping I’ll have a few takers for the premium version.
I’m agree with you Pippin. But i’m one of that silent customers that try to solve my problems and not annoy with 40 support tickets (i wish developers could charge or limit this!)
I’m fine with paid upgrades, but I not agree when somebody charge me 3x times the license of the regular price for a lifetime, and after a couple of years they not honor me when the new model changes.
Hi Pippin,
You have my respect and like your sharing your invaluable thought process on changing your business model.
I am one of the more vocal voices over on the Woo issue, in their blog and some other blogs (WP Tavern, Torquemag.io, Devpress etc) because I felt that their business practices were appalling (retroactively changing TOS on past purchases, dubious sales tactics, not emailing their existing customers on changes important to them).
And they were receiving plenty of praises which might embolden other plugin developers to pull the same trick. If a small group of us were not vocal, the effect would be disastrous for the entire WP ecosystem i.e. encouraging dubious business practices. Many in the WP community might take their words in face value and overlooked the bad business practices.
I am glad that they reversed their position and hope theyt are sincere about it as it has greatly shaken my trust in them. I am still wary at this point. I owned 22 of their WC extensions, and yes I am vested.
I became your customer a few weeks ago and bought half a dozen of EDD add-ons. I was aware they are for 1 year support and updates and I am fine with that because I am aware what I am buying into.
The unlimited support and updates backed by a big company with 30 staffs shaped my initial purchase decision on the WC extensions, because they represented good deal at that point in point! .
As I mentioned at the top of the post, I agree with what they did, just not how they did it.
If they had simply chosen to let customers know of the change (even the TOS) a few weeks before it happened, none (or much less) of this would have been an issue.
Thank you for being an EDD customer!
I just think 10, 30, or even a hundred bucks is a great deal when I need some functionality that I can’t create myself or wouldn’t be feasible to create for one project. I’m not sure what people are thinking when they want hours and years of your time and sweat for a few bucks.
I’ve never purchased a premium theme myself, I build ’em the old fashioned way, but woo looks like a great deal to me for what one gets- if a “developer” doesn’t have the skills to pull those off themselves.
I give you tons of cred for dealing with the support thing. I couldn’t do it no matter how much you paid me. When you guys ever get a vacation?
So true! Agree with you!
Glad you get away from CC.
Hi Pippin,
Thanks for posting this.
I am developing a commercial plugin and your article is really helpful.
It does appear that to make a living a yearly subscription seems like the way to go.
Web designers should factor in yearly subscription costs into hosting so clients are aware they need to pay to have the latest version.
I explain to my clients that if you buy a car, it needs fuel to run it and has regular servicing costs. Modern websites are similar if you want the latest software for your site you need to pay for it, just like maintaining your car.
Supporting clients does eat time so needs to be factored into the cost of the plugin.
Was considering video tutorials for all parts of the plugin as well as good documentation for users. FAQ section on the site too.
I think as long as this is explained when purchasing a plugin people will understand.