Alternative Pricing Models

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Directory of alternative businesses and pricing schemes (pay what you want, barter, free, etc ..) at http://paywhatonlineguide.weebly.com/


Directory

Pay what you can (PWYC)

is a non-profit or revenue driven plan of action which does not rely on set costs for its merchandise, but rather requests that clients pay what they feel the item or administration is worth to them. It relies on correspondence and trust to succeed.

Pay what you can is often seen as a donation and not actually as purchasing a product for the organization to make a huge profit. Pay what you can organisations often implement this business model once they have achieved profit from previous sales and advertisement, hence the ability to implement a Pay what you can strategy.


Pay what you want (PWYW)

or Pay what you choose is a pricing strategy where buyers pay their desired amount for a given commodity, sometimes zero. In some cases, a minimum (floor) price may be set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard price for the commodity. Many common uses of PWYW set the price prior to a purchase, but some defer price-setting until after the experience of consumption (much like tipping). PWYW is a buyer-centered form of participatory pricing, also referred to as co-pricing (as an aspect of the co-creation of value).

While most uses of PWYW have been at the margins of the economy, or for special promotions, there are emerging efforts to expand its utility to broader and more regular use.

Other names include "pay what you wish", "pay what you like", "pay as you want", "pay what you feel", "pay as you wish", "pay as you like", "pay what you will", and "pay as you will".

​"Pay what you can" is sometimes used synonymously, but is often more oriented to charity or social uses, based more on ability to pay, while PWYW is often more broadly oriented to perceived value in combination with willingness and ability to pay.

...

Giving buyers the freedom to pay what they want can be very successful in some situations, because it eliminates many disadvantages of conventional pricing. Buyers are attracted by permission to pay whatever they want, for reasons that include eliminating fear of whether a product is worth a given set price and the related risk of disappointment (“buyer's remorse”). For sellers it obviates the challenging and sometimes costly task of setting the “right” price (which may vary for different market segments). For both, it changes an adversarial zero-sum conflict centered on price into a friendly win-win exchange centered on value and trust, and addresses the fact that value perceptions and price sensitivities can vary widely among buyers." (http://paywhatonlineguide.weebly.com/pwyc.html)

Example: http://www.geefcafe.nl/ [1]


By Donation

""By donation" is another way of saying "pay what you choose". Some businesses use one term, some the other, and some use both. Some use a "suggested donation" amount to...

a) keep donations close to an amount they find acceptable for their business model, or b) to allay people's fears about not knowing what amount would be fair.

Many businesses use a "minimum suggested donation" as a way to set limits on what people give, thus ensuring that enough income is generated to cover their costs." (http://paywhatonlineguide.weebly.com/by-donation.html)

Barter

"A barter (or bartering) is an exchange between two parties using goods and services for payment instead of currency.

Example: ​BarterWorks in Kitchener, Ontario, is a local trading organization of individuals, businesses and community groups, Members trade goods and services through the exchange of barter currency or a combination of barter currency and Canadian dollars within the Local Exchange network." (http://paywhatonlineguide.weebly.com/barter.html)


Sliding Scale

"Sliding scale fees are variable prices for products, services, or taxes based on a customer's ability to pay. Such fees are thereby reduced for those who have lower incomes, or alternatively, less money to spare after their personal expenses, regardless of income. Sliding scale fees are a form of price discrimination or differential pricing." (http://paywhatonlineguide.weebly.com/sliding-scale.html)

Paying It Forward

"The “pay it forward” movement is not a new concept. According to Wikipedia, it dates all the way back to 317 BC where it was used as a key plot concept for a play in ancient Athens. There are small documented events of the “pay it forward” notion throughout history; however, it became a widely popular concept after the 2000 movie of the same name, which was based on the novel by Catherine Ryan Hyde.

The simplest way to define “pay it forward” is that when someone does something for you, instead of paying that person back directly, you pass it on to another person instead. One of the easiest examples of this is buying a coffee for the person in line behind you at the coffee shop and then they buy a coffee for the person behind them and so on.

What is the point of all this? Why do so many people live their lives according to the “pay it forward” principle? It has been proven that acts of kindness build exponentially in a community and because people believe that one good deed deserves another. “Paying it forward” can make the world a better place." (from "What Does It Mean to Pay It Forward?" by Jessica Blackmer, www.onlineblog.bryantstratton.edu [2])


Gift Culture

"Also called 'gift economy', 'gift culture', 'gifting', 'gifting economy'.

A gift economy, gift culture, or gift exchange is a mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards. This contrasts with a barter economy or a market economy, where goods and services are primarily exchanged for value received (from Wikipedia)." (http://paywhatonlineguide.weebly.com/gift-culture.html)