The second method for determining your price is to figure out what it costs you to offer and support a membership and then add a nice margin on top for your value. This is not the best method for coming up with the price for your membership. However, when combined with other methods that take into account customer expectations, figuring our your time and materials cost will let you know if your pricing is reasonable for your business. Most importantly, figuring out the cost of each member will tell you how much you need to charge at a minimum to make money. An Example What would it cost us to support 234 support members, 12 hosting members, and 1 VIP member? So far, for every 10 members we have, I’m spending about 2 hours of support answering forum posts, emails, and phone calls each month. I’m going to assume that I can hire someone at $25/hour to take over this work. So my costs for this would be about 50 hours per month x $25/hour = $1250/month. For hosting accounts, the cost of the server (and server maintenance) is about $40/month per user. We expect to spend about 12 hours…

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This entry was posted by Jason Coleman in Business and tagged . Bookmark the permalink. Last updated: March 5, 2012. Titled Membership Pricing: Time and Materials x Margin