How to Price Your App Without Losing Your Shirt (Or Your Users)

After running several apps over the years, I've learned that pricing isn't just about pulling a number out of thin air. It's a delicate balance between covering your costs, staying competitive, and not scaring away the very people you're trying to serve. Here's what I've learned about pricing your product the right way.

Know Your Business Model

The first decision you need to make is whether you're going one-time payment or subscription. This fundamentally changes your pricing strategy.

Here's my rule of thumb: if you're charging a one-time payment, multiply your yearly subscription price by three. Why? Because you're losing out on recurring revenue, updates become harder to justify financially, and you need to account for the long-term support you'll be providing without additional income.

For most individual apps, I've found the sweet spot to be $20-30 per year. This is affordable enough that users don't overthink the purchase, but substantial enough to build a real business. And here's the important part: charge yearly, not monthly.

Monthly subscriptions create friction. Users constantly reevaluate whether they're getting value each month. Yearly pricing encourages commitment. When someone pays for a year upfront, they're more likely to actually use your product, fall in love with it, and give you the feedback you need to make it better. With a one-time payment model, you'd need to charge $60-90 to match that yearly revenue, which is a much harder sell for an unproven product.

Do the Math: Know Your Costs

This seems obvious, but you'd be surprised how many founders don't actually calculate their per-user costs. You need to know exactly what it costs to serve each customer.

For my apps, the infrastructure typically runs about $4 per user per year in API costs, server expenses, and third-party services. With a $30 yearly price point, that gives me a healthy profit margin per user after accounting for payment processing fees.

Your pricing formula should be simple: multiply your per-user cost by 6. So if your costs are $5 per user, charge around $30. This gives you room for payment processing fees, support costs, and actual profit.

But what if your per-user cost is $20? This is where you need to know your audience. You can't just multiply by 6 and charge $120 for a consumer app. You might need to optimize your costs, target a different market segment, or accept lower margins initially as you scale.

Ride the Storm

Here's a phrase I live by: it's important to ride the storm.

When you're just starting out, cut back on expensive features. I know it's tempting to launch with every bell and whistle, but features that eat into your profit margin can wait. Focus on getting your UI and branding right first. Build the core product that solves the main problem.

Keep an open roadmap. Let users know what's coming. When you've established product-market fit and have steady revenue, then you can start rolling out those premium features that might reduce your per-user profit margin. By that point, you'll have the volume to make it work.

Don't Try to Match the Incumbents (Yet)

One of the biggest mistakes I see is pricing to match established competitors when you're trying to shake up an industry. You're not them. You don't have their brand recognition, their feature set, their support infrastructure, or their track record.

Start lower. Build a great product. Prove yourself. Then increase your pricing as you go along.

As you become more trusted, as users fall in love with your product, as you prove you can handle scale and provide reliable support, you earn the right to charge more. There's nothing worse than overcharging for an unproven product. The negative reviews and complaints will hurt you far more than any short-term revenue gain.

Price it fairly while keeping the lights on, and you'll build trust. Trust converts to loyalty. Loyalty converts to word-of-mouth. Word-of-mouth converts to sustainable growth.

But Don't Go Too Cheap Either

Here's the flip side: if you price too low, people will think you're a scam or that your product is low-quality. I've seen this happen. A $3/year app raises red flags. People wonder what the catch is, whether their data is being sold, or if the product will disappear in six months.

The solution? Transparency.

If you're pricing lower than competitors, explain why on your landing page or pricing page. Be upfront about it:

• "We're a new product building our reputation"
• "We're keeping costs low by focusing on core features first"
• "We're bootstrapped and growing sustainably"
• "As an indie developer, I have lower overhead than big companies"

Show your face. Put your story on your about page. Let people know there's a real person behind the product who cares about building something great. When users understand why your pricing is what it is, they're far more likely to trust you.

Transparency turns suspicion into support. It's the difference between looking like a sketchy deal and looking like a passionate founder offering genuine value.

The Bottom Line

Pricing is part art, part science, and part psychology. Here's what you need to remember:

• Know your business model and price accordingly (3x for one-time vs. yearly subscription)
• Calculate your actual per-user costs and use them as your foundation
• Start with yearly subscriptions in the $20-30 range for consumer apps
• Multiply your costs by 6 to ensure profitability
• Cut expensive features early and add them as you grow
• Don't try to match incumbents before you've proven yourself
• Start lower and increase prices as you build trust and reputation

At the end of the day, it's about knowing your worth and your costs. Get that right, and everything else falls into place.