Consignment Software Pricing

Fee-Based Software: The Hidden Costs

The initial amount paid for a fee-based program is only a down payment. With the exception of BCSS and one or two mom-pop plans, many payments will follow for 'service' and other imaginative assessments. It doesn't take long for 'fees' to exceed the original purchase price!

Concerted efforts are made to sell sell sell while making no mention of the largest part of the cost of computerization - fees! The simple solution is to avoid fee-based software, but if you're curious, here's how vendors plan on selling you on never-ending fees:

Step 1: Deceptive Advertising

Many vendors use misleading pricing tactics to get your attention. Here are some examples:

Low-balling is intended to grab attention, but it's misleading and unethical. Always look beyond the advertised price to understand the true cost.

Step 2: Pile on the Fees

Sit back and fasten your seat belt. You're about to be amazed at the number of twists and turns software pricing policies can take on their way to driving costs well beyond first impressions presented on misleading home pages and Internet ads.

Hidden, Unexpected, Surprising and Alarming Software Costs

• Abandoned Software Risk: A very large cost is having to replace software purchased from an individual programmer. Those who made such purchases in the past lost their money and had to purchase (and learn) another software program when the programmer abandoned the software.
• Customer Service Risk: Another large cost is the risk of doing business with an individual posing as a 'company'. Some vendors have been known to 'fire' customers when they tire of them asking for help, requiring additional payments for continued support.
• Manipulation Risk: Some vendors have offered 'free updates' that disabled software until additional fees were paid.
• Ownership Limitations: Software ownership should be passed to you upon purchase. Most programs, however, only allow the use of the software. You don't own it and can't resell it. The cost of this disadvantage is the cost of the software: $1,000+.
• Separate Service Fees: Some vendors have concocted fees (in addition to annual service fees) for separate services like printer or scanner support - even for hardware they sold you!

All Known Add-On Fees for Fee-Based Software

1. Support Fees in General: $125 to $600+ PER YEAR
2. Credit-Card Integration: $245
3. Data Conversion: $200
4. Data Storage: $72 PER YEAR
5. Database 'Tuneup': $69
6. Hardware Markups (above fair-market value): 25%+
7. Help with Windows, Networking, Hardware, QuickBooks (Passed to a 3rd Party): $100+ PER HOUR
8. How-To Help: $100 PER HOUR (Help with the software is NOT included in the annual service fee!)
9. Kickbacks to vendors from Forms Plus and X-Charge for steering you to their services
10. Label Markups: 4,000 Labels from Resaleworld: $77; Elsewhere: $18
11. On-site Training: $2,000-$3,000 (suggesting that the software is complex and hard to learn)
12. Phone Support: $100 PER HOUR
13. Printer Cables: $15
14. QuickBooks Compatibility: $199
15. Replace Stripped Features: $180
16. Replacement CD: $35
17. Replacement Software: $600-$1000 (when the 'programmer' is no longer around)
18. Shipping Charges: +5%
19. Software Copies: $99 to $395 for computers in the same store on a network
20. Software Copies for Multiple Stores: Full Price! (Ask about the cost of software for a second store - be prepared to be shocked)
21. Software Ownership Transfer: $100 to $500
22. Software Updates: $100+ (Often advertised as "FREE!" but denied if support fees are not paid)
23. Time to Relearn Replacement Software: $X,XXX
24. Transfer to Another PC: $150

If you plan on being in business for 10 years, the cost of using software (advertised from $400 to $1000) can exceed $5,000. Think of the low-ball 'purchase price' as a seed that once planted grows into fee vines that will consume your business.

How to Protect Yourself

Get Everything in Writing

If your mission is to avoid fees, insist on a written signed document disclosing all possible fees. If the vendor refuses, refuse the software.

Be Skeptical of Testimonials

Most vendors provide 'testimonials' on their websites, but these may be cherry-picked or even fabricated. Ask for references you can contact directly, and be wary of vendors who can't provide them.

Also, be cautious of vendors who refer their software users to third-party support at rates of $100 per hour or more. Asking competitors about each other is obviously a waste of time.

Calculate the Total Cost of Ownership

The amount of money paid in the first year (software cost + annual support fee + add-on fees for services excluded from annual service + labels + hardware markups + shipping/cables + amounts paid to 3rd-party help) is only a down payment toward the ultimate cost of using most software programs.

To get a true picture of what the software will cost you, multiply annual fees by at least 5-10 years, and add in all the potential additional costs listed above that apply to your situation.

The safe route is to do business with a software provider who is upfront and straightforward about pricing. Always read the fine print, ask detailed questions about all potential fees, and get everything in writing before making your decision.

Important Questions Every Consignment Store Owner Should Ask

Before selecting consignment software, know the long-term consequences of choices. Here's an example of a critical question many store owners forget to ask:

What happens if annual service fees are not paid?

Possible answers include:

1. "There are no annual service fees." (This is the ideal answer!)
2. "Nothing happens. There's no penalty." (Not as good as no fees, but acceptable)
3. "Support requests are referred to a 'forum'." (A concerning answer that suggests limited support)
4. "Software updates are denied." (A major red flag! Some vendors actually do this)

Many new store owners focus only on upfront costs without considering the long-term financial impact of their software choice. While no one plans to fail, businesses often struggle because they didn't anticipate hidden costs that emerge years after purchase.

Need More Help?

If you have questions about consignment software pricing or need personalized advice for your specific situation, I'm here to help. As a store owner who has navigated these waters, I can provide insights that software directories and vendor websites won't tell you.

Contact me at mischelle@consignment-software-reviews.com or call 606-789-1661.