Most indie products are underpriced

When you build something alone, it is tempting to charge very little. You are not sure it is good enough yet, you do not want to scare anyone off, and $3 a month feels friendly. The problem is that low prices make everything else harder.

Run the arithmetic. At $3 a month, you need about 330 paying customers to reach $1,000 in monthly revenue, before payment fees and hosting. At $15 a month you need about 67. Finding 67 people who care is hard. Finding 330 is roughly five times harder, and each of them expects the same support.

Low prices also attract customers who are more price-sensitive, which often means more support requests per dollar and higher churn. A higher price, paired with a clear promise, filters toward people who genuinely have the problem.

None of this means you should charge as much as you can imagine. It means your first instinct is probably too low.

Start from the value, not the cost

Your costs set a floor: you cannot charge less than it costs to serve a customer. But for most software, the cost per customer is tiny, so the floor is almost irrelevant. The useful question is what the product is worth to the person using it.

A few ways to estimate that:

  • Time saved. If your tool saves a freelancer two hours a month and their time is worth $40 an hour, that is $80 of value. Charging $10 to $20 leaves them clearly better off.
  • Money made or protected. A tool that helps a small shop recover even one abandoned order a month may be worth far more than its subscription.
  • What they use today. If the alternative is a spreadsheet plus a lot of manual work, the price anchor is their time. If the alternative is a $50/month enterprise tool they barely use, you have room to be cheaper and simpler.

Ask early users directly: what would you use if this did not exist, and what does that cost you? Their answers are more reliable than any pricing calculator.

Structure: keep it simple

For a small product, two or three plans is plenty. A common, workable shape:

Plan Purpose Typical shape
Free or trial Let people try it Limited usage or a time limit
Main paid plan Where most customers land The full product for one person or small team
Higher plan Capture heavier users More usage, seats or priority support

Pick one value metric. This is the thing that increases as the customer gets more value: projects, seats, messages sent, pages generated. Tie plan limits to that metric so upgrades feel fair rather than arbitrary.

Avoid a wall of feature checkmarks. A long comparison table invites people to hunt for the missing feature. Describe each plan in a sentence about who it is for.

Annual plans help. Offering a discount for paying yearly, often around two months free, improves cash flow and tends to reduce churn, since customers decide once a year instead of every month.

Free tier or free trial?

Both can work. They suit different products.

A free tier makes sense when the product has very low marginal cost, benefits from people sharing it, and has a natural moment where a user outgrows the free limits. The risk is a large population of free users who cost support time and never upgrade.

A free trial makes sense when value becomes obvious within days and the product is clearly a tool for work. The risk is that people do not get around to trying it before the trial ends. Tie the trial length to how long it realistically takes to see results.

A third option is no free access at all, with a money-back guarantee. It is uncommon but can work for niche B2B tools where the buyer already knows they have the problem.

If you are unsure, a time-limited trial is the easiest to reason about and to change later.

Worked example

Say you are building a scheduling tool for independent tutors. You talk to twelve tutors. Most currently juggle a calendar app and text messages, and say they lose about an hour a week to back-and-forth. Several mention that no-shows cost them a session or two a month.

A reasonable first offer might be:

  • Trial: 14 days, full features, no card required.
  • Solo: $12 a month or $120 a year, one tutor, unlimited bookings, reminders.
  • Studio: $29 a month, up to five tutors, shared availability.

At these prices, 40 Solo customers and 5 Studio customers give you 40 × $12 + 5 × $29 = $625 MRR. Not life-changing, but meaningful, and reachable through direct outreach in a niche. You can test from there.

Changing prices later

Your first price is a guess. You will change it, and that is fine.

  • Raise prices for new customers first. Watch whether signups and trial conversion change noticeably. Often they do not.
  • Grandfather existing customers, at least for a while. They took a chance on you early. If you do move them, give plenty of notice and explain why.
  • Change one thing at a time. If you change the price, the plan limits and the trial length at once, you will not know which one mattered.
  • Give it enough time. With small numbers, a week of data is noise. Wait for a few dozen trials before drawing conclusions.

If nobody ever complains about your price, it is probably too low. A few people saying "too expensive" while others happily pay is a sign you are in a reasonable range.

FAQ

Should I show prices in multiple currencies?

If a large share of your visitors come from outside your home currency zone, local currency display can help. It adds complexity, so it is fine to start with one currency and add more later.

What about a lifetime deal?

Lifetime deals bring in cash quickly, but you commit to supporting those customers forever without ongoing revenue. If you offer one, cap the number sold and price it well above a year's subscription. The glossary has more on the tradeoffs.

How do I know if my price is wrong?

Look at trial conversion and at what people say when they cancel. If many cite price and few cite missing features or fit, the price may be too high for the audience. If conversion is high and nobody blinks, test a higher price for new signups.

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