Thursday, July 15, 2010

Why are our fees 40%?

Some of you have asked us why we set our fee at 40% and can we please lower it a little.

We’ll in response to such requests we are considering a new progressive fee scale based on performance. However, we also wanted to let you know why our fees are what they are in the first place because we know many of you think it’s rather high.

Now, it's not like we don't understand the tutor's perspective. Several of Cafetalk's in-house development staff use Cafetalk to teach privately (as normal tutors without any unfair advantage whatsoever, we might add) and they've also said that lower fees will:

a) Give them more leeway to offer discounts to students when necessary.
b) Motivate them to do more lessons.

Yes, we completely agree. And we do understand that lower fees may attract more tutors who might otherwise be deterred from using our platform.

So we like to think that we do understand the pros and cons as well as your side of the story. Nevertheless, we also think that 40% quite fair for the following reasons.
  1. We put in a LOT of hard work to maintain the system and to gather students to the site.
  2. We give students discounts of up to 10% for bulk point purchases. (Although we may stop doing this in the future)
  3. Credit card processing company takes about 5%
  4. We use a considerable amount on advertisements, cross-promotional deals, giveaways, etc.
  5. We need to survive as a business so that we can continue to provide this service to students and tutors.
That leaves us with little to work with, and we need to pay for our dedicated servers and our support staff out of what's left. And to give a little perspective to the word "survive" we should mention that our founding members still remain unpaid (no joke) and we have no office of our own (which is why you see us working like nomads, wandering from coffee shop to coffee shop in search of open wireless connections). We don't take pride in our current situation, but at least no one can accuse us of being greedy profit-mongers until we're a little more successful.

But we're not complaining. We really love what we do. We started out with a dream to provide a platform to benefit both consumers and service providers alike, and we think we're getting closer to that goal every day (thanks to all the great work you guys are doing). What we do want you to understand is that we're not trying to rip you off. And that we just want to create a great service but we need all the support we can get.

That being said, we are very committed to making Cafetalk profitable for our tutors and we will continue to make that one of our top priorities. Like we mentioned at the begining, we are planning on introducing a progressive fee scale to make it a little more worth your while, but hopefully our efforts will not end there! So if you have suggestions on how we can make life better for you please don’t hesitate to let us know. (As always, no guarantees, though :)

Cafetalk Team

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