This article describes key concepts for using subscription pricing plans with and without recurring billing options.
A subscription pricing plan enables you to offer your customer a "bulk" purchasing capability, for example, the ability to have up to 500 listings or unlimited listings running at any time during the duration of the subscription.
- Subscription Duration - this is how long the subscription is in effect, for example 1 year.
- Listing Duration - how long a listing will run that is created using the subscription plan, for example 3 months.
- Recurring Billing - if enabled, the ability to charge your customer multiple times for their subscription during the duration of the subscription, for example every month.
- Recurring Billing Interval - if recurring billing is enabled, how often your customer is charged for this subscription, for example every 3 months.
- Recurring Billing - Number of Times - if recurring billing is enabled, how many times your customer is charged for this subscription, for example 4 times.
- Max Listings - how may listings may be running simultaneously using this subscription.
- Price - The one time charge for the subscription or the recurring charge for the subscription if recurring billing is enabled.
Here are 3 examples of subscription plans with and without recurring billing.
Recurring or Customer Charge
1 time Payment
Cust is charged $999 1 time at the start of the subscription. Listings will run for 1 month.
Interval = 3 months
# of times = 4
Cust is charged $199 every 3 months for a year. Listings will run for 12 months.
Monthly Plan 10 Listings
Interval = 1 month
# of times = 24
Cust is charged $99 every month for 2 years. Listings will run for 1 month.
Max listings of zero indicates no maximum. Listings run under a subscription stop running on the end date of the subscription.
Things to Avoid and Keep in Mind
Subscription setup can be complex as it provides a lot of flexibility for pricing plan design. Here are some things to avoid when using subscriptions and recurring billing:
- Listing Duration > Subscription Duration - Your listing duration should be less than the subscription duration.
- Recurring Billing Duration > Subscription Duration - The recurring billing interval times the # of times billed should not exceed your Subscription duration. For example you should not charge someone every month for 24 months for a subscription that only lasts 12 months.
- Price - the price you enter for the plan is the amount charged to your customer:
- Once if the plan is not recurring. This is charged at the start of the subscription.
- If recurring, every recurring billing interval, for example the price is charged every month.
- Long Term Subscriptions and Recurring Billing - 3, 5, 10, 20 year subscriptions. The longer your subscription lasts the more likely your customer's credit card will expire, be reissued, limited in some way, etc. This can create confusion or other issues with customers. While not required we recommend you setup subscription durations at 3 years or less.
- Payment Processor Limitations - Whether you have your own merchant accounts or outsource this to processors such as PayPal or Stripe, you should keep up to date on any other limitations or processing rules defined by your Processor. Some processors may limit the total duration of a recurring billing charge, for example not longer than 2 years.
- Simplicity - it's best to have a smaller number plans that are easily understood by your customers than dozens of plans to choose from.