Outsource Your Subscription Billing
May 21st, 2008 (2:00pm) Mike Gunderloy 12 Comments
We’ve written before about the difficulties that independent web workers have creating and supporting useful (and salable) products by themselves. One key is to outsource as much as you economically can. Now Z-Billing, from Zuora, offers a custom billing service designed to hit the sweet spot of “Web 2.0″ companies. Their key strength is in handling the sort of multiple-service-level, monthly-billed subscriptions that are everywhere these days, from Basecamp to Flickr Pro.
Z-Billing takes care of a bunch of things that would take you forever to code: multi-currency support, metered charges, reporting, Salesforce and QuickBooks integration, canceling and re-starting service, and more. They’ll take 2% off the top of your revenue for all this - which is cheap compared to the months you would lose writing code to do the same. Worth a look if you’re thinking of an online product launch.
12 Comments Post your own comment
Jeffrey McManus says: May 21st, 2008 3:14pm
Why would you use this instead of PayPal?
J Lane says: May 21st, 2008 3:51pm
I’m confused, does this actually accept payment (gateway), or is it just to “manage” accounts. The web site really doesn’t provide a clear description of what this service offers.
Tony Wright says: May 21st, 2008 4:11pm
If you have a rails site, would like a bit more control than this, and would prefer a front-loaded fixed price rather than giving up 2%, you should look at RailsKits:
http://railskits.com/saas/
Nimish Mehta says: May 21st, 2008 4:35pm
I don’t get it. What exactly does this give me that a credit-card based or paypal based payment approach doesn’t?
Why would I pay 2% to these fellows to collect money for a service that a) I sell, b) I create and maintain, and c) I deliver?
Nimish Mehta
Amie Gillingham says: May 21st, 2008 4:39pm
@Jeffrey: I see it does a few things PayPal subscriptions currently don’t, like the ability to restart a subscription, changing rate plans, etc. And as someone who has used PayPal subscriptions for our business since 2002, I can tell you their product (and customer service) have some serious failings. That being said, I still don’t really get what z-billing does, whether they’re a payment gateway, etc? I agree with J Lane that their site doesn’t exactly explain the service well.
I’d love to know if this is any good–there really isn’t another realistic competitor to PayPal out there and I wouldn’t mind considering another option for our business, particularly given the problems we’ve experienced with PayPal this week alone!
Mike Gunderloy says: May 21st, 2008 5:03pm
I wouldn’t consider Z-billing to be an alternative to PayPal. Their target is to take care of a fairly complex piece of development that is not the core competence of many application developers. They’re hoping people would rather buy a fullblown system off the shelf, than try to grow something organic starting from minimal features.
sun kist says: May 21st, 2008 5:42pm
The service sounds useful for an ISP and/or web host that could charge based on metered usage of bandwidth. Or number of hours used on a software-as-a-service.
Considering 2.0% is the fee, it doesn’t sound like payment gateway is included. Even card present retailers pay more than 2.0% on average for transaction processing. To me, this sounds like a revenue share arrangement. Sorry, but I’m not paying you to run a bunch of web servers after the initial code development.
Other competitors are:
Paypal
Google Checkout
AuthorizeNet (Automated Recurring Billing ARB)
Amie Gillingham says: May 22nd, 2008 7:50am
@Mike: thanks for the clarification!
David Lowenfels says: May 22nd, 2008 11:44am
@sun kist: I’ve used AuthorizeNet Automated Recurring Billing ARB (with their provided Ruby API which smells like Java), and would NOT use it again. It’s crap IMHO. They send all subscription update info by email, and it’s not XML so you have to write code to parse the emails, which they don’t even provide good examples of.
Scott says: May 22nd, 2008 9:26pm
I contacted them and the price STARTS at $2000/month. A bit steep for a web worker.
Also, the system does not accept credit cards.
Scott says: May 22nd, 2008 9:32pm
re my comment above…
I don’t know where 2% comes into play. I asked them directly if they charge as a % of billing so that my costs can go up in lock-step with revenue. They told me that ~$2000/month is entry level, so there is definitely some kind of floor.
As of now, the app is merely a manager of invoices that include complex pricing models. Actually, collecting on the invoice is handled outside the system. They tell me they are working on accepting credit cards by end of summer.
Michael Hale says: June 12th, 2008 6:01pm
Check out spreedly for an agile alternative: http://spreedly.com/