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.