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Product Pricing and Licensing

FAQsGetting your product pricing and licensing model right will help to significantly grow your sales. Think of the investment of your time, man power, resources and your money given to develop your software component or development tool. It is vital to price your product to allow the customer to make a return on their own investment, whilst at the same time making you money to re-invest in the product.

Q. How do I decide the price of my product?
A. Determining an appropriate price for a component is a complex process based on many factors: granularity of the logic encapsulated; uniqueness of the functionality; the number of competing products; and more. Typically there is a single license price, a team license price (4 licenses for the price of 2 or 3) and a site license price (unlimited site license for the price of 5 to 10 single licenses). Compare your product with others available in the marketplace and if you have a greater number of features raise your price above theirs. Never price your product low with the idea of making large numbers of unit sales; it simply doesn't work like that. Customers are looking for value, not 'shareware'.

Q. How do I go about licensing my product?
A. Component licensing is a twofold process: software protection and licensing terms and conditions. Software protection can be implemented in a variety of ways. There are also third-party solutions that can be purchased to accomplish this or you can build your own solution. Licensing terms and conditions are what make up the legal licensing agreement that is entered into by the publisher (you) and the customer upon purchase. These terms are best left to qualified attorneys. For more information on both areas of licensing, refer to our White Papers.

Q. Should I use royalties?
A. Runtime royalties are not generally used in the component market. There are exceptions, of course, but depending upon functionality and granularity, most software components are deployed as runtime royalty free. Per user royalties are difficult to enforce. An alternative that is used most often with server-side components is a Deployment License. In this scenario, the developer purchases the component, builds his application, and then pays a one-time fee for deployment (either per server, per processor, etc.). In many cases, the developer purchases the deployment license up-front (i.e. there is no charge for the developer kit, only a tiered pricing based upon the number of users at deployment-time).

Q. What are serial numbers used for?
A. A serial number can be allocated to each order, thus enabling ComponentSource to report to you which customer has which serial number for customer support purposes.

Q. How many serial numbers do ComponentSource need?
A. Ideally we would like a pre-generated list of 250 serial numbers for each purchase point. When the list of these numbers drops to only 50 pre-generated numbers then we would approach you to ask for a new list. This ensures that we are always able to meet customer demand for products.

Q. Why do ComponentSource want a list of serial numbers in advance?
A. The reason why ComponentSource needs the serial numbers in advance is to satisfy orders around the globe 24/7. So while you are sleeping we can still take orders for you!

Q. What is the reason for using the Escrow Service?
A. This service aims to provide developers using components in mission critical applications with the peace of mind they have longed for, knowledge that they have access to the source code if the worst happens. Such as, if the component supplier ceases to support the product or the supplier is no longer in business. ComponentSource has developed this program to encourage the adoption of components by large organizations and major corporates, some of whom are not permitted to purchase software that does not offer Escrow.

Q. Is it mandatory that my company disclose source code?
A. No. In fact, it is generally in your best interest to offer source code only via the ComponentSource Escrow program. This protects your intellectual property while providing the customer with a measure of security for a mission critical application. If you do wish to sell a source code license at an additional price, (rather than offering Escrow), you are free to do so, but we would recommend a very restricted license to use. e.g. At the very least you should restrict disclosure of the source code outside the organization purchasing the source code and the use of the source code to create a commercially competitive product. Please note this has ongoing support issues for you as a company, as once the customer has the source code, it will be more difficult for you to support it. Any changes they make may still have support expectations from your clients.

Q. What End User License Agreement (EULA) terms and conditions do ComponentSource customers agree to prior to purchasing my software?
A. Read our End User License Agreement. This acts as an umbrella set of terms allowing customers to purchase and download multiple products from different Publishers in one single order from ComponentSource. The ComponentSource EULA cross-references to your own EULA or terms and conditions that should be contained within your product. Ideally you should display your EULA to a customer for acceptance, prior to the customer running the installation process for your product.

Q. Does ComponentSource have a standard set of terms and conditions or a template that I can use to create my own Publisher End User License Agreement (EULA)?
A. No - we recommend that you find a Legal Counsel that has experience in writing software license agreements and instruct them to create a set of terms and conditions for your own organization. Ideally you should display your EULA to a customer for acceptance, prior to them running the installation process for your product.

Q. Does ComponentSource have a Return Policy?
A. Yes - Please refer to our Return Policy Page.