Experimenting with different listing fees

We’ve been experimenting with the listing fees that we charge on WP Questions. PayPal charges us .30 cents plus 5% on every transaction. When the site started, we charged .60 cents and 6%, but we soon realized we could not make any money at that level. We raised our prices to $1 plus 12% and was at that level for most of a year. Then, for 2 weeks, we charged 20% (and zero cents). Now we are experimenting with charging a flat fee of $2.49.

Each of these prices has a different kind of impact. A flat fee probably encourages bigger prizes since, as a percentage, the cost goes down on the larger prizes. A flat fee may kill off the $4 questions, which may or may not be bad for the site. Conversely, a purely percentage fee punishes those who want to offer a large prize.

Regarding the 20%, the owner of Tourkick sent us an email, which we quote with permission:

I didn’t know what the fees were before but they were small, probably enough to cover PayPal’s fees. You guys should net more than zero of course – we don’t want the website and its code snippets and conversations to go away – but, like I expressed, 20% gets expensive when paying $10 – $30 or more. It discourages shelling out that extra dollar or 2 or 5, since WPQs support is already cheap help.

And several Experts have donation buttons on their own websites.

It could be tempting to add money to Kailey Lampert’s Starbucks card instead of increasing the amount in WPQs… but I didn’t do that.

….

…If I were you, I’d like some percentage. I like the idea of base fee plus %. I think the reason we couldn’t figure the charges is because they weren’t published. I like the up front visible “20%” right below the button.

In order for a flat fee to be worth your while, it’d have to be more than $3, but any higher than that would be cost prohibitive for lots of little questions, which is the site’s purpose/value.

Personally, I try to earn enough to afford asking my own next question. I’m not sure how many others are like that, but if I could use my WPQs balance toward asking q’s, that would save you and me processing fees. Plus, it might encourage people to keep their balance in your PayPal account.

To that last point, yes, at some point soon we hope to allow people to ask questions for “free” using their WP Questions balance. By “free” I mean no listing fees.

What we are trying to do is tricky. We are trying to create a convenient place where askers and experts can meet. If we charge too much, then of course it makes more sense for the askers and experts to cut out the middleman (us) and deal directly with each other. Yet all the same, we need to find a way to make enough from this site that its economically rational for us to continue with it.

To that end, we will continue to experiment with prices.

Misty, our Technical Director, pulled together several price schemes into an Excel spreadsheet which shows different prizes with different flat fees and percentages, and what our profits would be for each: Fee Profit Comparison

We remain open to suggestions about what the makes the most sense for both askers and experts.

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7 Responses to Experimenting with different listing fees

  1. Christianto says:

    This is scenario that I could think.

    1. For question less than $xx ($10 for example), listing fee is fixed price ($2.5 for example).
    I believe it won’t kill $4 questions.

    2. For question bigger than $xx ($10) listing fee is base on percentage (start from 20% for example) and the higher the question price, listing rate will be reduce by xx % base on $ xx increment.

    For example, the reduce percentage is 2% by $20 increment.
    So
    questions $10 fee will be base on percentage.
    if question prize between $10 to $30 listing fee would be 20%
    if question prize between $30 to $50 listing fee would be 18% and so on..

    just my2cent 🙂

  2. Christianto says:

    Sorry little typos

    above example should be:

    questions smaller than $10 fee will be $2.5
    if question prize between $10 to $30 listing fee would be 20%
    if question prize between $30 to $50 listing fee would be 18% and so on..

    About $4 questions, the total that askers should paid will be $6.5.
    I think its very acceptable for solving any WordPress programming questions.

  3. Lawrence Krubner says:

    Christianto,

    I thank you for your input. You have good ideas. However, I think it is important that pricing remain simple. An asker should be able to quickly figure out what they will pay. I would be happiest with the simplest pricing scheme. Ideally, our sites could survive on just a percentage or just a flat fee. As a practical matter, that might not be possible. But whatever we do, I hope to keep the pricing as simple as possible.

  4. Lawrence Krubner says:

    I’d add, it is difficult to get people to read any of the explanations that we post. Few of our askers actually read our FAQ.

  5. Ozh says:

    I like Christianto’s scheme and was about to propose something similar, something that entices askers to raise question prices.

    Also, I think the blog posts here should be tweeted on @wpquestions too. I miss most of the blog entries here 🙂
    (Ideally, something like what @wpcandy does: two tweets for each blog entry, to cover multiple timezones)

    Regarding askers who read the FAQ or not: out of curiosity I completed the first steps to asking a question and I have a few comments.
    – on step 1 there’s a link to the FAQ. But the FAQ is lengthy, general, not focused to what the asker might wonder.
    – on the opposite, the right hand “Tips” column is awesome and right on the spot. You might make it more visible, or even mention it on the main area. For some reason, I was focused on the form fields and totally ignored the rest of the screen. I think forms intimidate people and they focus too much on them.
    – there’s a “Next” button, but no “Back”: I think that might make people a bit nervous, like “what happens if I change my mind? Will the back button break everything and I’ll have to start over again?”.
    – the awesome flowchart (what happens to the prize money) should be on step 3, not on the step where you upload a picture
    – Step 3 may have too much information (the whole listing of proposed amounts), but lacks some points I think are important and most askers would probably ignore:
    * do experts frequently suggest prizes? (how many questions were closed with no suggestions?)
    * if experts suggest prizes, does that mean they won’t answer my problem?
    * do experts suggest usually more than price tag? Much more? Sometimes less?
    * on average what is the typical prize?
    * is there a prize limit which seems to attract less responses?
    That is, stats. Stats on questions, prizes, would be cool.
    – on step 3 about money: see this awesome blog post on Akismet: http://blog.akismet.com/2011/08/15/smile/ I envision something animated that combines a smiley or something friendly (an expert avatar with its brain going bigger as the prize money increases! 🙂 and something informative such as a breakdown of how many goes to the expert and how many goes to the platform if you ever chose to experiment with Chris’ suggestion.
    – in pages footer there’s a link to “Tutorial: How to ask a question” but that page seems a bit outdated (I see tags for question, see below, fees are incorrect…)

    While I’m here suggesting stuff, I’ll continue adding some more 🙂

    I think it would be awesome to add tags to questions (shortcode, CPT, query, mysql…)
    First, that would make even more awesome stats that could interest both askers and experts (average prize per tag, tags that seem to attract more responses, tags that seem to require higher prize, etc…)
    Second, it could help experts scanning quickly the questions page and check if something seems to fit their skills
    Second and a half, it could entice experts to improve their skills on a given field. “I suck at this topic, is it worth it that I improve or are there too few questions about it?”
    (Third, that may make the open source funding stuff easier than scanning questions for keywords?) (by the way thanks for listing YOURLS there 🙂

    On the homepage: by default questions are listed by “ending soonest”. That may have been useful back when the site started, but now most if not all questions get quickly answered and that view is probably worthless to experts. I think having a “recently asked” by default would make more sense, and maybe a “questions with no answers” if any.

    On the homepage, minor glitch of no importance: the “Oldest” link below the archived questions doesn’t really work. It sends currently to ?page=38 but there are 43 pages.

    About promoting experts: people love badges, ranks and stars. Create more! Bronze star for 10 questions won, bronze badge for 10 questions participated, gold star for 30 questions won, etc… I’m pretty sure you cannot create enough stuff 🙂 See how stackoverflow works: they have a shitload of badges and that hugely part of their success.
    Another thing that may be cool: make an embeddable widget that experts can show off on their websites (something that shows their expert-of-the-month star, their stats, etc…) That may be something some would want to display in order to show visitors their reputation, skills and credibility.

    About answering questions: it might be interesting, as an expert, to contribute to a discussion on a question without competing for its prize. Let me explain more:
    I recently saw on a question a few answers that were all crappy (crappy code or rough misunderstanding of WP stuff). First, I felt like leaving a comment like “Joe: your code is bad because blah blah and Tom: doing so will create problem on this and that”. But then I thought: first, the asker will think I’m a useless dork (commenting on others’ answers but not giving any solution), and second that will add in my profile another question to which I’m not the “Winner!”, which may make my profile look less skilled. Maybe the ability to mark a reply as “just comment, not solution” would be neat (or maybe it would be just confusing and not worth the hassle, don’t know 🙂

    I think that’s it for now. Sorry for the long post, some ideas or comments may be definitely less worthy than others 🙂

  6. Ozh says:

    Ah, I knew I add another suggestion 🙂

    Regarding askers and experts cutting out the middleman: that’s bound to happen, especially if after a few questions they’re a good connection between them. I see that as a potential benefit of what wpquestions provide: introduce experts to askers.

    Scenario: asker has a big question or even a small project to work on. Rather than posting everything on wpquestion, asker may post just a part of the problem/project. Among the experts who reply, asker may pick one to continue to work with, out of wpquestions. But they do not necessarily trust each other yet and the expert may be relunctant to work on something bigger and maybe not getting paid.

    Now, maybe there’s another field to experiment there: acting as an escrow between askers and experts.

    Asker & expert would agree on a price, asker puts the whole amount in wpquestions’ escrow, experts gets paid when the job is finish, wpquestion gets a fraction of the amount. It’s just how freelancer sites such as getacoder.com work.

    I realize that’s something way different that your core business now, but maybe that’s an idea to keep in mind and explore some day 🙂

    (by the way, feel free to unapprove my comments if you’d prefer to keep a few ideas private or if they’re just too stupid)

  7. Lawrence Krubner says:

    Ozh,

    Thank you for your suggestions. We appreciate the feedback. I will try to respond to all of your ideas:

    > Also, I think the blog posts here should be tweeted on @wpquestions too

    That would help people follow this blog, but some people don’t want to follow this blog. I prefer to keep @wpquestions as pure as possible. If you would like to follow this blog, please follow it here: http://twitter.com/#!/code_wise

    > on step 1 there’s a link to the FAQ. But the FAQ is lengthy, general, not
    > focused to what the asker might wonder.

    Good point! We should perhaps have an FAQ just for first-time askers, and perhaps that is what we should link to.

    > there’s a “Next” button, but no “Back”: I think that might make
    > people a bit nervous, like “what happens if I change my mind? Will the
    > back button break everything and I’ll have to start over again?”.

    The 4 step links (just about the forms) allow you to go backwards. If you are at step4 and want to go back and edit the question, just click the link for step 1.

    > the awesome flowchart (what happens to the prize money) should be on
    > step 3, not on the step where you upload a picture

    I agree there might be a better spot for it. But step 3 is where we should the expert suggestions on prices, which is also important. We introduced it in May, and it seems to have helped a lot. Up until May, askers complained that they had no idea how much they should offer as a prize.

    > * do experts frequently suggest prizes? (how many questions were closed with no suggestions?)

    I think maybe 1 in 5 get suggestions? Maybe 1 in 4.

    > * if experts suggest prizes, does that mean they won’t answer my problem?

    Apparently, they often do answer, despite the low prize.

    >* do experts suggest usually more than price tag? Much more? Sometimes less?

    Yes, usually. Not always. Sometimes less. You can see that on that page.

    > * on average what is the typical prize?

    The average used to be $16 but recently it has gone up.

    > * is there a prize limit which seems to attract less responses?

    Good question.

    >That is, stats. Stats on questions, prizes, would be cool.

    Good idea! I’m devoting this whole weekend to creating charts.

    >I think it would be awesome to add tags to questions (shortcode, CPT, query, mysql…)

    Maybe. When we started we allowed tags on the questions. These were rarely used. But recently I’ve been thinking of allowing tags on the recommendations ( http://www.wpquestions.com/recommendation ). Experts could then re-post any question they like as a recommendation.

    > Second, it could help experts scanning quickly the questions page and
    > check if something seems to fit their skills

    This is why we had tags in the first place, but it didn’t work. The askers are (on average) newbies, they do not know how to tag their questions. I mean, the askers often mislabeled their questions. They would tag something “shortcode” but they were really looking for info about “custom types”. Their mistakes made the tags useless.

    > in pages footer there’s a link to “Tutorial: How to
    > ask a question” but that page seems a bit outdated (I see tags
    > for question, see below, fees are incorrect…)

    Thank you, we will update it soon.

    > I think having a “recently asked” by default would make more sense,
    > and maybe a “questions with no answers” if any.

    I agree, we should probably change the default view, and “questions with no answers” would be a good way to sort the questions.

    > About promoting experts: people love badges, ranks and stars. Create
    > more! Bronze star for 10 questions won, bronze badge for 10 questions
    > participated, gold star for 30 questions won, etc… I’m pretty sure
    > you cannot create enough stuff See how stackoverflow works: they have
    > a shitload of badges and that hugely part of their success.

    For the most part, yes. However, I think StackOverflow looks cluttered and ugly. I hope to find a path forward that offers more badges but also has a cleaner look.

    > Another thing that may be cool: make an embeddable widget that
    > experts can show off on their websites (something that shows
    > their expert-of-the-month star, their stats, etc…) That may
    > be something some would want to display in order to show visitors
    > their reputation, skills and credibility.

    Absolutely. That has been on our to-do list for over a year. Sadly, TMA takes priority over all else. And for now, you can not see most of the work we are doing for TMA. Hopefully that will change soon.

    > About answering questions: it might be interesting,
    > as an expert, to contribute to a discussion on a
    > question without competing for its prize.

    You can do that now using the “discourse” feature.

    > I recently saw on a question a few answers that were all
    > crappy (crappy code or rough misunderstanding of WP stuff).

    Please downvote the answer if you see serious technical errors. (Use the “flag” link.) If an answer has 3 downvotes, it disappears.

    > and second that will add in my profile another question
    > to which I’m not the “Winner!”, which may make my profile
    > look less skilled.

    Good point. Again, I would say, please use the discourse feature.

    > Now, maybe there’s another field to experiment there:
    > acting as an escrow between askers and experts.

    To a limited extent, we do this now. But for work that happens off-site, we have no way to judge it’s quality. Please see what I wrote here: http://www.wpquestions.com/refund_request/show/question_id/2271

    > I see that as a potential benefit of what wpquestions
    > provide: introduce experts to askers.

    I agree. Many experts have found new, long-term clients via WP Questions. That is one of its many benefits. Do you recall when WP Questions was accussed of being exploitive?
    http://wpquestions.com/question/show/id/435
    Buzu B wrote: “Something we seem to have left out so far is the fact that you also get clients here.” That’s an important benefit.

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