Hidden Fees in Consignment Software

"Annual service fees are a thing of the past.
There's lot to learn about this contrivance."

Consignment Software Service Fees

There may be no doubt in your mind that software vendors are out to get as much as they can from each and every consignment store owner, but it's a good bet, thanks to sly marketing strategies, that potential customers don't know the half of it prior to purchase.

It will pay dividends in the future to learn now how to avoid programs offered by profiteers with your best interests not in mind.

The Song and Dance

Think about the progression: Boy goes to programming school. Graduates. Looks around to see where he might get a job (or not), or better yet, looks for a software niche that's going to allow him to skip the 9-5 thing, sit at home in PJ's and bang out source code for... consignment software!

Why not? Look at the prices his would-be competitors are getting up front, and look at the stream of income to follow from annual service fees. These guys are in business. They must be having some success at conning people into paying $1,000 for home-grown software, and $300 per year for 'service'! Heck, if the lad can get 4 people per month to buy his charade, he'll make $48,000 with zero overhead and has $14,400 to look forward to next year on top of another $48,000. Let's get a business name and a website and let's get going!

In some cases it's fairly obvious that our graduate who learned how to write software didn't minor in marketing, as evidenced by some of the lame rationalizations offered up to justify 'annual service fees':

Arm Twisting

You might be told up front that the annual fee is optional and you'll need to know what the consequences are of not paying it (because vendors haven't volunteered the information in the past).

The most common form of arm twisting is to refuse to fix an issue when it arises. Rest assured that there will be issues and fixes will be needed (if only to keep up with technological changes) and when it happens, the first thing you'll be asked when you call for help is, "Did you pay the annual support fee?". Better have your credit card ready, otherwise you'll be turned away even after having paid $1,000 or more for $200 software!

There's a plan for tapping your wallet even if you never have an 'issue' which is to deny software updates as they become available. Did the vendor add a new feature, or change some quirk that you didn't like? Too bad. You aren't going to enjoy the benefits because you didn't pay the annual service fee. In other words, software updates are not 'free' as advertised. They are conditional upon payment of the 'optional' annual service fee.

One vendor will refer you to their forum where you can post your problem and wait for someone to respond. (Anyone there? Day1... Day2...) The wait of course will drive you back to the service window with credit-card in hand. That's the plan.

Getting back to our friend in Miami: Sometime back he offered a 'free software update' to several users who opted not to pay the annual fee. Those who took him up on it found their software disabled after a short period of time and were told that the planted bug would not be removed until he was paid off. True story.

Hidden Costs

Once you're locked into a vendor that requires annual fees, you'll also be subject to increases in the annual fee. These fees have been raised frequently and considerably in the past and there's no reason to expect that vendors will pass up this opportunity to bilk users for more once the corral gate is closed.

Didn't buy the annual support plan and need help? Add 25% to 50% to the price charged to those who did sign up for the 'annual support program'.

Here's a doozy: Help learning the software is not included in the annual service fee and is billed at $100 per hour.

Another wrinkle is to increase the annual fee if multiple copies of the software are placed in service. Obviously this can be a very costly trap:

Software vendors' message to shops: "Get out there. Be successful. We have plans for sharing in your success!"

Your defense? Demand in writing a full disclosure of all possible fees. Ignore claims that support will never be needed because the software is just so wonderful. Every program has bugs and every program must be upgraded frequently to keep up with changes in Windows and other technology.

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