Pricing Strategy¶

Pricing Tiers¶

Our three-tier pricing model is designed to serve different customer segments while maximizing revenue and market penetration.

Tier Comparison¶

Basic Tier (¥299/month)¶

Target Customer¶

• Solopreneurs and micro-businesses (1-3 people)
• TikTok sellers just starting out
• Individual content creators
• Low device count (phone + laptop)

Value Proposition¶

• Most affordable entry point
• Good for testing the service
• Sufficient for basic TikTok/Instagram access

Profitability¶

Monthly Revenue:     ¥299
Monthly Cost:        ¥120 (VPS ¥80 + Exit Node ¥40)
Gross Margin:        60%
Monthly Profit:      ¥179

Upsell Strategy¶

• After 3 months, offer upgrade to Standard when they need more devices
• 30% of Basic customers upgrade within 6 months

Standard Tier (¥599/month) ⭐ Recommended¶

Target Customer¶

• Small teams (5-15 people)
• Established TikTok Shop sellers (¥1M+ annual GMV)
• Social media marketing teams
• Cross-border e-commerce businesses

Value Proposition¶

• Best value per device (¥30/device for 20 devices)
• Includes router hardware (rental model)
• Extended support hours cover evenings
• Most popular tier (60% of customers)

Profitability¶

Monthly Revenue:     ¥599
Monthly Cost:        ¥180 (VPS ¥100 + Exit Node ¥60 + Hardware ¥20)
Gross Margin:        70%
Monthly Profit:      ¥419

Upsell Strategy¶

• Offer Enterprise when they hit 20 device limit
• Upsell on-site support visits (¥500 each)

Enterprise Tier (¥1,299/month)¶

Target Customer¶

• Large teams (20+ people)
• Social media agencies managing multiple brands
• E-commerce companies with multiple product lines
• Companies requiring SLA guarantees

Value Proposition¶

• Unlimited devices - entire office covered
• Highest priority support with 2-hour response
• Own the hardware after 12 months
• Dedicated account manager
• Best for mission-critical operations

Profitability¶

Monthly Revenue:     ¥1,299
Monthly Cost:        ¥280 (VPS ¥120 + Exit Node ¥100 + Hardware ¥40 + Support ¥20)
Gross Margin:        78%
Monthly Profit:      ¥1,019

Retention Strategy¶

• Quarterly business reviews
• Proactive monitoring and optimization
• Custom SLA terms available
• Volume discounts for multiple locations

Pricing Psychology¶

Why These Price Points?¶

¥299 (Basic): - Just under ¥300 psychological barrier - Compare to: Astrill VPN ¥150/device × 2 devices = ¥300 - Perceived value: Same price, better solution

¥599 (Standard): - Double the Basic price, 4× the value (20 vs 5 devices) - Compare to: ExpressVPN ¥80/device × 10 devices = ¥800 - Perceived savings: ¥200/month vs DIY VPN approach

¥1,299 (Enterprise): - Premium positioning (>2× Standard) - Compare to: IPLC ¥5,000-20,000/month - Perceived bargain: 90% savings vs enterprise alternatives

Add-On Services¶

Strategy: Add-ons increase ARPU (average revenue per user) by 15-20%

Discounts & Promotions¶

Annual Prepayment Discount¶

15% off (equivalent to 2 months free):

Benefits: - Improves cashflow - Reduces churn (committed customers) - 70% of customers choose annual after Month 3

Volume Discounts (Multiple Locations)¶

• 2-5 locations: 10% off
• 6-10 locations: 15% off
• 11+ locations: 20% off + dedicated account manager

Target: Franchise businesses, multi-branch companies

Referral Program¶

• Referrer: 1 month free service OR ¥300 cash
• Referee: ¥200 off first month

Expected: 30% of new customers from referrals by Month 6

Competitor Price Comparison¶

Consumer VPNs (Per-Device Model)¶

Savings: 50-80% vs competitor per-device pricing

DIY VPS Approach¶

Value Prop: Pay ¥144/month more for zero hassle and professional support

Enterprise Solutions¶

Positioning: 80% of enterprise performance at 10-15% of cost

Cost Structure Breakdown¶

Per-Customer Costs (Standard Tier Example)¶

Fixed Costs (per customer/month):¶

VPS (shared 1:10 ratio):        ¥100
Exit Node (shared 1:20 ratio):  ¥60
Router Hardware (rental):       ¥20
Monitoring & Support:           ¥10
────────────────────────────────────
Total Fixed Cost:               ¥190

Variable Costs (usage-based):¶

Bandwidth Overage (rare):       ¥10
On-site Visits (avg 0.1/month): ¥5
────────────────────────────────────
Total Variable Cost:            ¥15

Total Cost per Customer/Month:¶

Fixed + Variable:               ¥205
Revenue (Standard Tier):        ¥599
────────────────────────────────────
Gross Profit:                   ¥394
Gross Margin:                   66%

Scaling Economics¶

Economies of Scale (100+ Customers)¶

As customer base grows, unit costs decrease:

Key Insight: Profitability improves dramatically with scale due to infrastructure sharing

Revenue Scenarios¶

Conservative Scenario (100 customers by Month 12)¶

Add-ons (+15%): ¥104,220
Total Annual Revenue: ¥799,020

Base Scenario (200 customers by Month 18)¶

Add-ons (+18%): ¥256,608
Total Annual Revenue: ¥1,682,208

Aggressive Scenario (500 customers by Month 24)¶

Add-ons (+20%): ¥730,800
Total Annual Revenue: ¥4,384,800

Pricing Optimization Strategies¶

Dynamic Pricing (Future)¶

1. Seasonal Promotions
2. TikTok shopping festivals (Black Friday, 11.11): 20% off first month

3. New year promotion: 3 months for price of 2

4. Usage-Based Tiers (Year 2+)

5. Charge based on actual bandwidth consumed
6. ¥0.50 per GB for overage

7. Incentivizes efficient usage

8. White-Label Reseller Pricing

9. Wholesale: 40% off retail price
10. Resellers mark up 50-100%
11. Scale customer acquisition without marketing spend

Price Sensitivity Analysis¶

Willingness to Pay (Survey Data)¶

Based on pilot customer interviews:

Pricing Position: - Basic & Standard: Mid-point of WTP range (maximizes volume) - Enterprise: Lower third of WTP range (encourages upgrade from Standard)

Price Elasticity¶

Estimated demand elasticity: -1.5 (elastic)

If we reduce Standard tier by 10% (¥599 → ¥539): - Demand increases by 15% - Revenue increases by 3.5%

Decision: Hold current pricing for Year 1, revisit after achieving 100 customers

Churn & Retention Impact on Pricing¶

Monthly Churn Rates by Tier¶

Key Insight: Higher-priced tiers have LOWER churn (more committed customers)

Lifetime Value by Tier¶

Strategy: Focus sales efforts on Standard & Enterprise for better unit economics

Pricing Playbook Summary¶

Next: See Revenue Projections for detailed financial forecasts and break-even analysis.