Frequently Asked Questions
How do I price my SaaS product?
SaaS pricing should cover COGS (hosting, support, infrastructure), achieve your target gross margin (typically 70-80% for SaaS), and align with competitor pricing. This calculator combines all three approaches.
What is a good gross margin for SaaS?
Healthy SaaS gross margin is 70-80%. Best-in-class SaaS companies achieve 80-90%. Below 60% suggests high infrastructure costs that need optimization before scaling.
What is COGS for a SaaS business?
SaaS COGS includes hosting/infrastructure, third-party API costs, customer support costs, and payment processing fees. Does not include sales, marketing, or R&D.
Should I use per-seat or flat-rate SaaS pricing?
Per-seat pricing scales naturally with customer usage and is easy to justify ROI. Flat-rate is simpler but leaves money on the table with large teams. This calculator works for both models.
How it works
- Input your monthly costs to deliver your software to one user.
- Set your growth assumptions like churn and acquisition cost (CAC).
- Choose a pricing strategy: Value-based, Cost-plus, or Competitor-based.
- The calculator determines the optimal price and grades your unit economics.
Tips for best results
- •Value-based pricing is usually the best approach for SaaS. If you save a business $1000/month, charging $100/month is a no-brainer for them.
- •Aim for an LTV:CAC ratio of at least 3:1.
- •Your payback period should ideally be under 12 months to maintain healthy cash flow.