My non-profit foundation has made a Shopify App that saves us 3 days a week of one human inputting data. We currently license the software to other non-profits for $1000 setup (we use staff time to walk them through it) and $50 a month licensing.
A private company in the non-profit space that we have a good relationship with wants to buy the software and integrate it into their offerings. We have no idea how to price it - thoughts?
Background: - Cost us about $10,000 of a developer's time - We currently have 6 customers just through word of mouth and are not actively selling in any way -the company would deploy it for their offerings to hundreds of customers and it ties into software that is used in 80% of all major fundraising organizations in N. America - they could likely duplicate it themselves - but the testing side was extensive
Looking for advice on how to price it. Selling it fits one of our key strategies to be a leader in the non-profit space.
1. (If they have the know how and resources to clone your app) estimate how much would it cost for them to just implement a similar app themselves, instead of purchasing from you. Price at a similar level (that should still be worth it for them as they avoid the risk). “Similar level” could even be let’s say 2x, but probably not 10x. In other words make sure “buy” sounds better than “make”.
2. Estimate the profit they will generate, price somewhere below that level. In other words, make sure they see they will get economic value out of the deal.