Ask HN: Tiered pricing vs Pay-As-You-Go. What works when?
I&#x27;m currently building a small online service and have a problem when trying to decide the pricing model. As far as I can see, there&#x27;s three possible models:<p>1) PAYG: you get an invoice monthly which lists what you&#x27;ve used, and you pay it. Can also do pre-pay (Tarsnap, AWS)
2) Tiered pricing: you pick a tier, and pay a fixed amount every month that gives you a usage limit. (Github)
3) Tiered-As-You-Go: a bit of a blend of the two, it&#x27;s like PAYG but the usage billable &#x27;units&#x27; are fairly chunky, so you get a mostly consistent bill but with the flexibility to use more on-demand.<p>I&#x27;ve read a fair bit about why pricing tiers make a lot of sense from the business side. There&#x27;s lots of stuff around psychology and maximizing profit out of each customer and that all seems to make sense. However, I can&#x27;t get away from the fact that as a consumer, I <i>hate</i> tiered pricing. I usually end up feeling that I&#x27;m being ripped off, unless I use everything that my current tier offers. The tiers hardly ever fit my needs, and it&#x27;s generally not a nice feeling. And once I do get to the limit of my tier, the next small thing that I need equates to a big jump in cost, because suddenly I need to be a super-platinum customer, even though I don&#x27;t need most of what that offers.<p>So my question is this: If you were building a startup now, what factors would influence your pricing model? Is there anything that would make you rule out PAYG or pricing tiers completely?