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Visual Horizons Software

I own ConsignPro, why can't I sell it like any other asset?

When software companies price their software, they build into that number the cost of a certain level of sales, technical, and customer support that the customer will (on average) require over the useful life of the software. It is assumed, in this pricing, that some customers will stay in business a short time, and others a long time*.  If priced appropriately, the cost is figured in correctly and software company makes a reasonable profit.

If the license is sold, however, this delicate equation is disrupted because the NEW owner of the license (who did not pay the software company for it) requires an additional level of both sales and customer, and technical support from the software company. Often, the SAME questions which were already asked, are asked and answered again for the new owner - thereby increasing our costs without increasing our revenues.

But you CHARGE for technical support?

True, but this nominal fee (currently $100 a year) does not come close to covering our annual cost of support.  In truth, the majority of our customer service cost is built into the INITIAL charge for the software license and (again) amortized over its expected useful life.  If the new owner were to request a similar level of customer support (which on average they do because the software is new to them), our costs far exceed our benefits and we lose money.

In case you think we're just being mean, just about every software license in existence works this way.

 



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Copyright 2003 Visual Horizons Software, LLC
Last revised: February 5, 2003