Ask HN: Experience with offering monthly subscriptions?
At the moment it is entirely financed through advertisements. This brings in just about enough money to justify running it, but I don't really like this model. Not only are the ads annoying (I even use an Adblocker myself) but I suspect that they are also not very good value for me. In addition, there are of course all the complications introduced by GDPR, which mean I am not even sure anymore if I should continue to use services like AdSense at all.
Over the last few months and years I have been thinking more and more about introducing some sort of subscription feature, where members could pay a small monthly fee to become an official "supporter" of the site. This would then hide all ads, give them a little badge on their profile and maybe access to some bonus features in the future.
However, I have been shying away from doing this so far, mostly because the tax implications sound very complicated. If I understand the rules correctly, I would have to charge each user VAT based on their home country and then report the VAT I have collected to each home country every month. And to do this, I might even have to register with the tax authorities in every country?! However, it seems like Stripe may have something to help with this [0] although that may be more US-focused.
Has anybody here tried doing something like this? How complicated is this in practice? Or can anybody recommend a service that takes care of these issues for you? And what has the reaction from your users been like?
I also recently came across Funding Choices from Google, which may do something like this with their Contributor feature [1]. Has anybody implemented this successfully?
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[0] https://stripe.com/works-with/categories/tax-calculation
[1] https://support.google.com/fundingchoices/answer/7279083?hl=en&ref_topic=7279185
20 comments
[ 5.4 ms ] story [ 58.6 ms ] threadMOR: https://paddle.com/taxes-fraud-compliance
Micropayments are something it sounds like you've already looked into as well.
You can get lower transaction fees doing the VAT yourself but when you're starting out a few percent more per transaction is probably worth it so you can focus on your project.
I've been using Fastspring for years, and I'm not 100% happy with them, but they just work, they support lots of payment methods, and their invoices are compliant with EU regulations (which is a very rare thing).
If you just want to get on with your business, use Fastspring.
Did you consider Paddle who offer EU VAT processing as well? Paddle offers 5% + $0.50 on every transaction. Fastspring you can pick between 1) 5.9% + $0.95 on every transaction or 2) a flat 8.9% with a minimum of $0.75. I agree you're best getting on with things but when they're comparable in terms of integration it's worth considering the fees.
The biggest thing they had going for them was that they’re a EU company, but with Brexit that no longer applies either (if Brexit ever actually happens...).
Maybe at some point I’ll reconsider, but 1% of revenue is not going to be enough reason to switch.
Fastsprings API sucks, and the licensing options are very limited, but it works.
My reporting script uses IMAP to download and parse order confirmation emails from Fastspring. Not an elegant solution, but it does get the job done.
Yeah, I've had to consider similar frustrating options as well because of surprising functionality lacking in APIs.
For example, for Paddle subscriptions, the webhook that gets called when a subscription is created sends you a user specific URL that lets a user cancel or update their payments and that's the only place you can get programmatic access to it. You can query the subscription data from their API and it returns most fields you'd expect except for these URLs. You've either got to create your own database to store these or deal with it manually when you get support emails.
It's not that what FastSpring is a real impediment to piracy (once something is downloaded it's game over anyway), it's more that Paddle's implementation was so clueless I figured probably other parts of their system were similarly bad.
Disclaimer: I’m the founder. :)
If you are going to offer subscriptions you should have some serious content that only subscribers have access too that is regularly updated and is premium quality to keep people coming back.
You should also continue to have information available for guests and non-subscribers to keep them, but the good stuff should be available to premium subscribers only. Many businesses only show 1/4th of the content or a synopsis of the content, though this is only successful if the premium content is long (1,000 words or more and heavy in value (detailed subscriber only videos and content, insure the URLs being served to subscribers are verified from your sites API to insure the content can only be accessed with an active subscription).
It is highly recommend to go the premium subscriber or subscriber tiers versus donations as donations are normally not as inclusive as actual subscribers wanting new premium content.
Also, you do not need to report your VAT to each individual member state. You'll need to break down your sales per country to prove you are charging the correct VAT, but you should only need to report that in the country that you are tax resident.
Source: self-employed in Spain, selling VAT-chargable digital goods.
The billing logic is pretty easy:
1. If the subscriber has EU IP or the billing address is of any EU country, add VAT per their country's rate to their invoice if they do not provide a valid VAT ID.
2. We use https://vatlayer.com/ for VAT rates, geolocation using cloudflare ip gelocation https://support.cloudflare.com/hc/en-us/articles/200168236-W...
3. Currently, we use WHMCS for subscription management which costs $39.95 per month. Why? because it supports many payment methods! that's very important to our business. It also takes care of VAT etc....
https://www.youtube.com/channel/UChXICgGipKvJbtzKfM1SNoQ
It supports many payment plugins:
stripe 4.1.1
braintree_blue 0.3.1
paypal 5.0.9
adyen 0.5.10
avatax 0.4.1
email-notifications 0.3.1
accertify 0.3.0
analytics 4.2.5
and many more....