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How Do You Make $ from this?

by dgmufasa
5 replies
Hi All,

Was going over this document noting how to set up a sales funnel.

In one of the examples, he points to a company called "Planscope".

When looking at it, I saw that the pricing structure is mentioned below.

https://planscope.io/pricing

I was wondering how does one make money in this case? The amounts charged to the client are so low - how can you even have some kind of decent margin where you can keep the doors open let alone survive? Is one doing some kind of upsell?

Regards.
#make
  • Profile picture of the author onSubie
    I would guess economies of scale and they probably have a team of low-cost VA's doing all the work.
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  • Profile picture of the author Chris Lee
    They're a SAAS (software as a service) business not a service business. They're selling access/use of their software.
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    Follow my journey to $10,000/month with Adsense.
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    • Profile picture of the author dgmufasa
      Thanks for the replies! I knew it was SaaS - but - the monthly fees are very low. I had wondered how one could make a profit charging so low - unless those are teaser rates and when the person signs up, there are other costs.

      Kind of like the insurance company who will cover a heart transplant in such a way that they will pay for taking the heart out but want the patient to pay for putting the heart in (since most people do not have such funds, the operation can't take place at all).
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      • Profile picture of the author kk075
        Originally Posted by dgmufasa View Post

        Thanks for the replies! I knew it was SaaS - but - the monthly fees are very low. I had wondered how one could make a profit charging so low - unless those are teaser rates and when the person signs up, there are other costs.

        Kind of like the insurance company who will cover a heart transplant in such a way that they will pay for taking the heart out but want the patient to pay for putting the heart in (since most people do not have such funds, the operation can't take place at all).
        The monthly fees are about where they should be for an automated business and it's a great model for success. $50-200 a month may not sound like much, but when you interact with that client for less than 15 minutes a month...the math looks a little better. Then when you consider that 1 full time employee can handle an average of 160 clients (or $8000-$32,000 in business), then you see it's completely sustainable. If the worker makes $10 an hour, they're eating up 1.25 to 5% of the company billings...which is a very good figure for this type of business model. Since they're not in the US though, then I'd cut that hourly rate by four and expect labor to be well under 1% of total billings...and that's insanely profitable.

        Those types of businesses advertise heavy though, so they likely have dozens of staff members and thousands of accounts...and it looks like they'd have better than 80% margins overall. In retail, total margins are around 30-50%. So this could be an extremely profitable business venture with the right CEO. And since they can likely afford to pay this person well into the 6-figure range, they should have a good one.
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  • Profile picture of the author ryanbiddulph
    Hi D,

    Remember too, as your client volume grows, low fees add up Focus on the growth aspect of what you're doing, and what others are doing, and you can charge low rates yet see tremendous returns in the long haul. Think abundance

    Onward and upward,

    Ryan
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    Ryan Biddulph helps you to be a successful blogger with his courses, manuals and blog at Blogging From Paradise
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