I got a competitor's brochure yesterday. On the homepage: $12 per seat per month. Simple. Clean. Honest.
Except it isn't simple. Here's the detailed math, for an 8-person workshop.
The sticker
$12 × 8 seats × 12 months = $1,152/year. That's what you pay at signing.
The volume discount that isn't quite real
A salesperson tells you on the phone: "For 8 seats, we can do 10 %." You're happy, you compute 10 % × $1,152 = $115 saved. You sign.
What you don't know: the discount applies only to the first year. Year two, full price. It's in the contract, page 14, in italics. "Promotional pricing valid for initial 12 months."
Real 3-year impact: not -$115, but -$115 year one, $0 year two, $0 year three. Three-year average: -$38/year.
Net 45 days
More subtle. The vendor bills monthly but terms are Net 45. You pay each month 45 days late.
Over the cycle, that's equivalent to paying in advance, since you use before paying. But your accountant has to book the expense every month, even if it hits the bank statement 6 weeks later. Cash impact: minor. Accounting impact: 20 extra minutes per quarter to reconcile.
The mid-year renegotiation
Lived case at a client's: they buy 8 seats in January. In July, they hire. 11 seats now. The vendor writes: "Your volume has changed. We need to revise your contract."
The 3 new seats move to the vendor's current rate — which has gone up 14 % in 6 months. The first 8 seats stay at the original price, but only until the end of the contracted period. Next January, all 11 seats sit at the new rate.
Unexpected 3-year overage: about $600.
The honest total
Over 3 years, for 8 seats initially, ramping to 11 in year 2, at the sticker $12/seat:
- Year 1: $1,152 − $115 (discount) = $1,037
- Year 2 (with 11 seats): $1,584 + $230 (new-seat rate bump) = $1,814
- Year 3: $1,584 + $220 (contract inflation) = $1,804
Three-year total: $4,655.
The $12/seat effectively becomes $14.12/seat once everything is smoothed.
What Sablio does differently
Sticker price, paid price. One rate. No discounts that evaporate. No renegotiation on hiring. If you add a member in July, you pay that day's price pro-rata, and it doesn't move your other seats.
Costs more to display. Costs less to live with.
— Patrick