How do I decide on a pricing strategy?
I have a CRM app (bootstrapped) in the app store for a certain vertical. Recently i got a request for white labeling my app for using it for his team. any advice on how i should charge him? how should my contract look like? and what are the different options of white labeling. any resources would be helpful
1. Talk to a lawyer who can write you a proper licensing agreement.
2. Charging should be around $10,000 per year or $50,000 one-off fee if you are scarce for money. It could also be $50,000 per year though, but this depends on how big of a budget you think the licensee has. Try to find that out indirectly in a call with them.
3. If someone can only pay you $5,000 per year or less, I wouldn't do it, since your rebranding, bugfixing costs are higher than the $5,000.
If you're bootstrapping, here's my advice (7-figure SaaS founder, bootstrapped):
I wouldn't spend too much time talking to lawyers, but rather just make a simple contract outlining all the things you want to be protected by. Lawyers can be expensive, and still not get the job done right - unless you outline all your terms (might aswell write one up then)
How much to charge him? Well, it's your business :-)
There's no magical number (like someone said $50k lol), but charging someone a hefty fine may be really hard as they can just invest that money and build it out themselves. Make it easy for them to make money, and you'll also make money
One thing you are going to have to contend with is customization requests. I've helped white label several applications now and while the licensing/pricing may be fairly straight forward to figure out, figuring out if or when to allow and then how to handle customization requests will be key (especially if you ever plan to move beyond just one single client.) there are a lot of options you need to think through in terms of individualized custom requests (front-end related such as design or look/feel as well as back-end new feature development requests.) There are some instances where you may want to allow for customization on any scale but charge a hefty price and others where you should absolutely avoid it altogether. so in addition to the pricing question and contract portion be sure to think ahead of how you'll handle one-off customization requests so you aren't caught off guard when they inevitably start rolling in.
Best of luck!
You should charge based on your monthly burn.