In the Tech Industry, selling software components or Source Code is a lot like selling a business. This may sound questionable, but hear us out.
The Source Code your company’s Dev team worked so hard to develop is not simply a software product. Depending on its features and size, it could potentially be the base of an entire business and could potentially generate massive amounts of revenue in the future.
Now we come to one of the main concerns of a Tech Startup, which is Pricing Source Code. It is no surprise that Pricing Source Code is one of the most confusing things a corporation faces when selling Source Code.
In this article, PieceX, the first AI-powered Marketplace for Buying & Selling Source Code, will take you through the two main methods for Pricing Source Code: Manual Pricing & AI Pricing.
To manually price your Source Code, you will need to go through a thorough process that includes multiple steps. Those steps serve as a collective of market research, target psychology, and algorithmics.
If you are not doing AI Pricing, here is a breakdown of how it should manually work:-
Measuring Demand & Supply
The first step of the process to pricing source code is to measure the amount of demand your project has versus the amount of supply it already has on the market.
For example, if your project is a POS system with very unique specifics to a certain industry that is heavily reliant on it, you may find that the demand is quite high for it while the supply isn’t common. Taking that into account while you are in the pricing source code phase, it is only natural that this project would be more financially valuable than, let’s say, a photo editing app, which is highly common and easily reskin-able.
Evaluating Potential Revenue
Here comes the next step. Unlike AI Pricing, with manual pricing you will need to do a lot of evaluation for your project as a potential revenue stream. This means, if someone buys your project, how much money can they potentially make with it.
Source Code for a transportation system with perfect tracking and payment setup can, depending on the features, be the next Uber, which would make its value as a project very high as it has all the software components and tech basis to compete with major Apps and software.
Evaluating potential revenue using clear cut analysis is essential for pricing source code.
Following the Algorithmic Formula
Now that we have clear numeric values for potential revenue as well as demand & supply, we can proceed by moving onto our formula.
This formula is an equation that navigates the value by which the project is equated in the industry with the potential revenue that could come from it. The potential revenue is then affected directly by supply and demand (increasing or decreasing its value based on how much it is needed).
The final price comes from that equation and where it stands amongst the Average Market Price.
When pricing source code, the previous process requires a heavy accounting team that knows exactly what they’re doing and have a strong tech background.
This is usually not very feasible if you work on multiple projects and need to focus on your company’s tech and production rather than pricing and numbers.
That’s where AI Pricing comes in. The second main method for pricing source code is AI Pricing. In some Source Code Marketplaces such as PieceX, you will find that all listed products are priced automatically through the PieceX’s strongly optimized AI Pricing System.
This AI Pricing System, not only has the ability to analyze the Average Market Price, it also measures demand and supply and equates all factors into the pricing when you are selling source code.
One of the major advantages of AI Pricing is that it not only lists your project with the perfect suitable price, it is also not static. It is constantly measuring market variables and making sure to adapt your project’s price to its current market value.
This is why PieceX adopts AI Pricing as its main solution to pricing source code because it serves as a great tech based substitute to following the heavy manual pricing process and assists Tech Startups and enterprises expand their revenue on the PieceX Marketplace simply and without hassle.
For more valuable information, visit our Knowledgbase and read more!