Comment by boulos | Hacker News Reader

Comment by boulos | Hacker News Reader

Nice idea! It's kinda like Greensill et al. for smaller businesses. I'm a little confused about your economics though.

Your pricing [1] is simple, but I'm a bit surprised that there isn't something that scales with volume. For example, I know banks and retailers commonly offer 0% interest over 10 months for direct customers, but that's with the hope of additional related business. Are you that "more business"? (it seems like maybe? Since some jobs are not interest free and the basic plan is also with interest).

Alternatively, what does "9% subsidy instead of 11% on successful finance applications" means? (I was put off by the intercom chat widget wanting me to provide an email to watch your demo video. Sorry. I'm also not a potential customer). Is that where the risk premium gets included?

I also get to repeat the patio11 meme: charge more. For 45 pounds a month at the top end, you've probably returned a small fortune to the business owner. Even just handling the quoting and receipt of payment part is a big deal! (Here in San Francisco, it can be hard to get an invoice from a contractor and even send them payment; we've had to follow up for months!). Tossing in Financing and support for cards (and do you mean "debit" or also "credit" cards; I know you're UK based, so the defaults are probably obvious to your audience, but I figured I'd ask).

Either way, sounds like a big win for small shops!

P.S. There's also a "Downlaod" typo in the first pricing column.

[1] https://www.kanda.co.uk/pricing

> I also get to repeat the patio11 meme: charge more.

I'd suggest the opposite: Drop monthly fees to $0 and leave it to the per-transaction fee (what they call a "subsidy", confusingly).

Charging customers a monthly payment only to follow up with a steep 9-11% transaction fee when they actually use the service is not a recipe for happy customers. You also risk churning contractors off the platform if nobody takes their financing option for a month or two. You're going to get people trying to cancel and then re-subscribe as soon as they find a customer who might want financing, only to cancel again.

IMO, ditch the monthly fee so you don't give people a reason to cancel.

Also, drop the lowest priced plan. It doesn't make sense to have a £25 plan right next to a £30 plan. If someone is buying the service, making them jump through the mental hoops to calculate if £5/month is worth it for them is friction you don't need. Simplify to 2 plans, or even 1 plan.

If you can reduce the mental load of signing up from "Which of these 3 plans, if any, is right for me?" to "Should I sign up yes or no?" it's a win.

Hi, thanks for taking the time to look over the site and thanks for the feedback! Our base price for our subscription might seem cheap, but for tradespeople, whose margins might already be tight, its seen as a fair price for the quoting and invoicing features. The 9% or 11% subsidy we charge is on the quote total when the tradesperson offers 0% finance - if a customer took out a 0% loan for £1000, we would charge the tradesperson a £90 (or £110) subsidy for the finance package. If you’d like to see the demo video, here’s the link:

https://www.youtube.com/watch?v=pVHBFHTNS90&ab_channel=Kanda

For card processing, we actually support both debit and credit cards, though typically we process debit cards and have a subsidy charge for credit card processing, due to higher processing fees from the banks.

We do think Kanda is a big win for the small guy - we put the power in their hands to compete with the big companies in the sector, offering finance products they couldn’t otherwise offer and winning more work for it

The word "subsidy" is unclear to me... I'd understand it far better if you just said "We charge you an 11% fee for all finance arranged through us".

Kinda odd to have fees that big though... I thought the norm in the industry is to pay money the other direction, with the understanding that a good portion of customers will fall behind on finance payments and then have to pay sky high fees and interest rates for decades to come...

These fees are actually representative of the fees charged to retailers to offer 0% financing options. We don't hide these fees from the tradespeople, so they can decide to up their price to include that fee if they wish, or can choose to swallow the cost to win more work. We put the power in their hand to decide how they want to handle each situation as they see fit

Why do retailers push financing options so hard if they only get 9% less money?

Lots of stores (here in the UK at least) will, after you've decided to buy a product try to persuade you to use their financing. Sales reps usually get bonus only for customers who use financing. I always assumed companies earned more if you used financing.

We're a UK founded and based company, so we see this all the time as well. The finance option makes it a lot easier to sell to a customer - if you're told you can pay £700 for a TV today, or take it away and pay £30 a month for 2 years, most people would rather take the finance. I don't know why the sales reps would only get commission for finance sales, but the stores would rather take a small loss and make a sale than lose a customer to a high price.

For our tradespeople, most of their customers know they can get finance from companies like British Gas. Even though our tradespeople would be cheaper outright, BG can offer 0% and so the customer doesn't have to pay it outright. We've had people tell us they signed up to use us for this very reason, with someone even saying BG were £1000 more expensive, but the customer went with them as they could pay monthly!

> Why do retailers push financing options so hard if they only get 9% less money?

Typical financing options like Affirm only charge 2-3% to the retailer.

The 0% financing is a bit misleading as they're just collecting their profit up front as a separate fee (the 9-11%) instead of collecting it as interest over the course of the payback period.

Expecting contractors to take a 9-11% cut out of their profits is not likely, at least in my area. Realistically I'd expect contractors to raise their quotes by the amount of the financing fee so they come out at the same final payment amount.

Ahh, that makes sense!

I’m not used to the term “subsidy” used in this manner (is this a common British English usage for “fee”? In the video you use the term “fee”), but if you’re basically charging ~10% of the invoice then that’s a very different story.

In that universe, the monthly charge is basically your hurdle for support. Free / cheaper would give you more volume, but you probably don’t currently want folks who aren’t willing to pay even a few pounds a month for support. I’d still say there isn’t enough spread between those plans though.

Like the downstream comment, I feel like I’d want the fees more clearly spelled out on the pricing page. “Offer installment plans to your customers (11% fee)” or something. It would make it more clear that “oh, I’ll be using that, I should take the other plan for the 2% drop; even 1000 pounds of work a month pays for itself”.

The video makes it clear that in your UI the fees are more clear (though I might add a paragraph break when describing that the financing option is “cost to you: 11%” and the personal loan “cost to you: 0%” but then say “customers prefer the 0% interest, even with higher quotes” or something). So I think to improve your customer acquisition, you just need a bit more clarity in the pricing panel text.

P.S. thanks for the video! I think you had an editing problem though. The “let’s see the customer view” happens both at the start and again after we see the vendor-side view. (Unless that’s intentional)

Reply on news.ycombinator.com