SaaS Pricing Models for Startups – How to Price Your Product Right

Learn the best SaaS pricing models for startups including freemium, tiered, usage-based, and per-user pricing with beginner-friendly examples.

As I think pricing is one of the hardest decisions for SaaS founders.

If your price is too high → users won’t sign up
If your price is too low → you won’t grow

The right pricing model can make or break your SaaS business.

This guide explains the best SaaS pricing models for startups, when to use each one, and how beginners should choose.

What Is a SaaS Pricing Model?

A SaaS pricing model defines how you charge users for your software.

It includes:

  • How often users pay

  • What they pay for

  • How pricing scales

  • Free vs paid access

Most successful SaaS companies experiment with pricing multiple times. It's always better to know more about best payment gateways for SaaS startups.

What Startups Should Focus on When Pricing

Early-stage SaaS founders should prioritize:

  • Simplicity

  • Clear value

  • Easy upgrades

  • Predictable revenue

Complex pricing scares users away.

Most Common SaaS Pricing Models

Let’s break down the best options.

1. Freemium Model

Users get a free version with limited features.

Paid plans unlock advanced features.

Best for:

  • Productivity tools

  • Collaboration software

  • Viral products

Pros:

  • Easy user acquisition

  • Low entry barrier

Cons:

  • Many users never upgrade

2. Flat-Rate Pricing

One price for everyone.

Example: $19/month for all features.

Best for:

  • Simple SaaS products

  • Niche tools

  • Solo-founder products

Pros:

  • Simple

  • Easy to understand

Cons:

  • Hard to scale revenue


saas pricing models comparison chart

3. Tiered Pricing (Most Popular)

Different plans with increasing features.

Example:

  • Basic

  • Pro

  • Business

Best for:

  • Most SaaS startups

  • B2B SaaS

  • Growing products

Pros:

  • Flexible

  • Encourages upgrades

Cons:

  • Needs good feature planning

4. Usage-Based Pricing

Users pay based on usage.

Examples:

  • Per API call

  • Per email sent

  • Per GB used

Best for:

  • API SaaS

  • Infrastructure tools

  • AI products

Pros:

  • Scales naturally

  • Fair pricing

Cons:

  • Harder to predict costs

5. Per-User Pricing

Charge per seat or per user.

Example: $10/user/month.

Best for:

  • Team tools

  • B2B SaaS

  • Enterprise products

Pros:

  • Easy to understand

  • Predictable

Cons:

  • Can limit adoption


tiered pricing model for saas startups

Which Pricing Model Is Best for Startups?

For most beginners:

  • Tiered pricing is the safest option

Start with:

  • 1 free plan (optional)

  • 2 paid plans

Keep pricing simple and flexible.

How to Choose Your SaaS Price

Ask these questions:

  • What problem am I solving?

  • How much is it worth to users?

  • Who is my target customer?

  • What do competitors charge?

Start lower, then increase as value grows.

Common SaaS Pricing Mistakes

Founders often:

  • Copy competitors blindly

  • Overcomplicate plans

  • Hide pricing

  • Underprice forever

Your pricing should evolve with your product.

how to choose saas pricing model

Example Pricing Setup for Beginners

A simple starter setup:

  • Free plan – limited features

  • Starter – $9/month

  • Pro – $29/month

This works for many SaaS ideas.

Final Thoughts & Advice

Pricing is not permanent.

For SaaS startups:

  • Start simple

  • Choose tiered pricing

  • Test and iterate

  • Listen to users

The best pricing model is the one that helps you launch fast and grow sustainably.

You can always change it later.

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