Pricing that discourages scale

So, this all started when I saw that Google was attempting to replace traditional search results with an AI overview. I'm not entirely discouraged by tools having AI features, it's pretty much the norm these days.

I decided to ask it questions about LoveInvoice, just out of curiosity. There's something interesting in seeing a chatbot talk about your products, and I wanted to know what it knew. I ended up talking about pricing, and realised something very interesting - my app discourages scaling. It started spewing out comparisons between the 1% fee versus subscription-based alternatives and it was clear that there was a problem.

LoveInvoice is completely free to use, but an application fee of 1% is taken whenever a Stripe payment is taken through the app. You can completely use all of its features without this fee if you don't want to connect online payments, but when I was researching initially, that 1% for me felt negligible.

In the grand scheme of things, Stripe is already taking a small fee as a percentage (mostly), I assumed that the user would see that fee as an extension of that - an extra little bit to handle the actual sending, etc.

But when that 1% scales, it becomes very disproportionate - a £5,000 invoice ends up with LoveInvoice taking £20 of that (there is a maximum fee cap). That's a single big invoice, and most SaaS applications' monthly fees for unlimited invoices are around that. Spread that over several invoices and you end up paying considerably more than you ever would if the app was subscription-based.

The whole idea of this pricing model initially was to appeal to freelancers who don't want to pay out of pocket. I get paid if you get paid. I spent so long focusing on that specific kind of user that I didn't think about the other end of the spectrum.

I spent a lot of time working it out, and decided that the maximum fee cap would need to be lowered... significantly. Eventually I settled on £3/$4/€3.50 and removed the minimum fee (£0.50). Now, big users aren't penalised.

I know it's early doors thinking about this - I don't have any big users yet, but I think it makes sense to solve these problems before they put people off signing up altogether. I think from a user's POV, even though I know I'm not likely to hit those limits, it does make you slightly cautious because of the "what if".

So now LoveInvoice is cheaper to use, and still free for everything else. Thanks, Google.