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Neto Jacking Up Their Pricing Structure

Discussion in 'Selling online' started by logicware, Feb 28, 2019.

  1. logicware

    logicware Member

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    Hi all,
    received a not so nice surprise from Neto today. They are significantly raising the pricing on their ecommerce solutions.

    Currently I pay $49 AUD per month for my website, under the new pricing as of the first of April (april fools anyone?) My new suggested plan price is $199 USD !

    The cheapest option (which actually works for my business is $79 USD)

    I wonder if the ACCC has any interest in a company increasing their pricing by 200-500%
    for the same service. Now the kicker these prices do NOT include GST. So we are paying USD prices for what I know as an Australian Service (they claim price rise is due to aud value vs usd hosting costs) and being slugged GST at USD rates.

    Somehow none of this really seems right so it looks like it will be time to pull the plug on Neto and find a new platform to sell from.

    Interested to hear what anyone else might think about all of this.
  2. Paul - FS Concierge

    Paul - FS Concierge Administrator Staff Member

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    Wow, just wow.

    I personally doubt that even a large price increase would draw the attention of the ACCC.

    But wow.

    This is an example of the old saying, own the racecourse, not the racehorse.
    LucasArthur likes this.
  3. LucasArthur

    LucasArthur Renowned Member

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    Its also symbolic of many online practices lately with subscription services, suck them in with carrots and punch them hard when they are sticky...
  4. John Debrincat

    John Debrincat Well-Known Member

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    Or more likely their major investor, Telstra, wants them to make a profit.

    John
    Paul - FS Concierge likes this.
  5. El Arish Tropical Exotics

    El Arish Tropical Exotics Active Member

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    Neto Users are gathering here.There are a lot of unhappy customers. There is another group but the moderator has drunk the koolaid and is deleting posts on the price increase.
  6. LucasArthur

    LucasArthur Renowned Member

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    ITs funny, i think Neto appear to have embedded themselves with some key players in the online marketplace who are defending their actions.. My knowledge is limited on NETO, although the conversations have been 'interesting'
  7. El Arish Tropical Exotics

    El Arish Tropical Exotics Active Member

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    About 18 months ago they pushed for "partner" web designers that are affiliated and get a cut for new clients. I think they have a dog in the fight as they've developed their businesses around Neto. I just had to leave the original group as some of those hitters were saying things like "you'll only have to sell another $450 a month to cover the increase, if you can't do that you've got a more serious problem". I don't really think that's the point, trust has been lost. People are angry and they are deflecting away from the real issue. It will be interesting to see how this goes :)
  8. chewlim

    chewlim Member

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    And it looks like their focus is now in the US.
  9. bb1

    bb1 Renowned Member

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    At the end of the day any business providing a service (in this case NETO), need to charge enough money so that they make a profit, if they don't make a profit they go broke, if they go broke, they shut the doors, and often overnight without notice..

    This would apply be it ecommerce services, plants, pick and pack, clothes, cleaning services, etc. You get the drift.
  10. El Arish Tropical Exotics

    El Arish Tropical Exotics Active Member

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    That goes for us too Bert.
    • Less than a month ago they promised their customers that old customers would stay on their plans and only new customers would have to go on these plans.
    • They have sold themselves on NOT pricing according to turnover like other platforms and not taking a percentage which when you tier according to turnover is.
    • They have sold themselves as charging in Australian dollars not U.S. and being an Australian company. They are now charging in U.S. dollars and moving to Denver, Co. USA.
    • They have a jump in their plans from 100,00 to 750,00 which means everyone in between is considered a large business and being charged on a large plan.
    • They have given customers less than a months notice that they will be forced to the new plans.



    For me the issue isn't so much the price jump, it's the poor customer service, that fact that there is no sweetener to help me swallow this, the fact that trust has been broken and that they have given me a big FU. I have no idea what they will do in the future on the road to global domination, there is a good chance they'll go bust in the U.S. and then I'd be left with no notice and no platform.

    If you consider that "good" business you can count me out as doing business with you.
  11. John Debrincat

    John Debrincat Well-Known Member

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    You should really do the numbers before changing your service provider. There are a lot of considerations that can impact your business. We have been inundated with inquiries. Some have had a longer term want to change and this is the straw while others are making a spur of the moment decision, not so good. As much as we would like to get lots of new customers i would urge that the decision be made carefully. We would be happy to talk through your business case with you. eCorner is not for everyone but we pride ourselves on helping people make the right decision.

    So thank you for all the messages and calls we have created a simple online form if you want more information and we will ensure these are fast tracked for you.
    https://www.ecorner.com.au/neto-migration

    Thanks
    John
  12. El Arish Tropical Exotics

    El Arish Tropical Exotics Active Member

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    Very sensible advice John, as I said I'm in no rush.
  13. BusinessTrade

    BusinessTrade Active Member

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    Like Paul said, own the racecourse not the racehorse. It is always best to not rely heavily on a platform such as Shopify, Neto, eBay etc because once they change the rules, you could lose your entire business or be in a lot of trouble. My suggestion would be to slowly migrate away if you can but definitely weigh up the costs and risks.
  14. bb1

    bb1 Renowned Member

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    Thats the problem with todays sloganistic world. Think of the practicalities of it. Do you really think it's possible, another one of those hey it sounds good but really??


    Yes but what do you suggest as the alternate to migrate to, and are they really practical and feasible for the average small business?
  15. LucasArthur

    LucasArthur Renowned Member

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    Good point Bert, one of the key reasons platforms like Shopify and a few others (Neto almost falls into this, or used to) are so convenient and relied on is because there are so many small businesses out there that have a website on these platforms that otherwise would never venture outside of the ebay type of selling.

    What i mean is, they have both little funds to deploy into 'owning' the platform and couple that with most that would have little knowledge of 'how to set up an ecommerce site' with skill and hosting etc etc, that these readyTOgo platforms are just a go to for them..

    Hey, i have several ecom and some are on own platform and some are on shopify - both are good, Shopify just works though if you are a small business - it is also fondly used by many that are creative or in the hand made segments as it has a list of things that suits them.

    Whilst this sounds like a reason to go with these platforms or a plug, honestly it isnt, it is just about the right tool for the right application and then marry that up against the skill set and budget for said business and voila - some of these platforms come out ahead...

    For some, seeing a white page of death in WooCommerce when updating a redundant plugin - can shut them down for days.... and cost to have fixed if cant wind back... even though its a simple-ish fix in the scheme of things, it is if you know what you are doing..

    What this thread highlights is that some become so heavily reliant on external support or mechanisms that they can be burnt or become unprofitable by a business changing their subscription models. One reason i dislike ANY subscription model, be it website or even apps/plugins to be honest - bad analogy, although i liken it to a drug dealer handing out samples - get you hooked, and voila, money keeps rolling in as the prices get jacked up.

    What something like this should highlight is that we should be covering these types of dramas in our business plans, our SWOT analysis and factoring in unexpected changes and if we can burden them. IT can also raise inwardly the thoughts about margins and where one stands on a product front. This week alone i have spoken with several businesses about their 'business' that has been inspired by this Neto roll out.. What i mean is that many have panicked about the rate increase and yet are overlooking the practical deployment of it Neto is still the right tool for the job, regardless of price... Some should move, some should stay regardless of price (Neto love these ones as these are the ones they want to keep anyway with a move like this due to Stickiness).... Some that have chatted have realised that the increase has only highlighted their low margins and overall profitability, whilst others have seen the price gouge as going to far (and rightly in some eyes with the promises made and then retracted)...

    Overall, bugger of a place to be in.. But coming back to Berty, migrating can be costly and unfavourable for some businesses who cant burden an extended IT team or have one on call to fix issues, develop or maintain a site that comes with hosting ones own...
  16. El Arish Tropical Exotics

    El Arish Tropical Exotics Active Member

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    My concern is I swallow the increase and global domination doesn't go to plan. More competition may force the big dogs to be a bit more competitive and Neto may not do well over there. What happens then? Do I get a price increase because they are hemorrhaging money in the U.S.? Or what happens if Telstra decides to sell them or break up the company and sell off assets? Like I said I could eat the increase but I may be setting myself up for bigger headaches down the track.
    I agree it is a great platform but it is hard to use it to it's full potential with the current customer support situation. Someone from the outside who has never gotten the run around for two weeks or had support tickets become old and grey may feel that many customers are over reacting but I think since the Telstra takeover customer satisfaction has been going downhill and there is a lot of resentment surfacing. Money is important, it's part of the way we "value" our business but relationships and trust are also important components in doing business.

    I'm curious Jason why would you choose Neto over Shopify? I've heard dollar for dollar their support, apps and templates are better.
    Last edited: Mar 2, 2019
  17. LucasArthur

    LucasArthur Renowned Member

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    Howdy

    Firstly, and i know you have seen me around a bit, let me just say that i am not picking on anyones frustrations here - at all.. as i feel they are warranted, from the little i know about Neto...

    You ask why would i chose Neto over Shopify, i dont... i use Shopify on a few platforms @ $30USD per month and gives me everything i need.. Or did you ask why have i chosen Shopify over Neto?

    Honestly, my concern with Neto was it is monstrous.. and every time i considered the jump, as there are a few people in groups i am in that use it and push it, i look at the price + the addons needed for me and its just not warranted - ever.... It also appears complex, rather than set and forget like Shopify appears to be (really, Shopify is too simple - if that even makes sense - on occasions)...

    For me, for the $30USD i got access to a dumbed down version of POS that works a treat, the 'dumbed' down section meaning no printing receipts and couple other simple things i didnt need - also had decent support, things rarely conflicted and so forth.. There are numerous things i dont like about Shopify, but for $30bucks (USD), i could live with it.. LOL... Funnily though, i am currently migrating one across to woo (i am familiar with woo) as the plugin i need for a specific task costs a bit monthly on shopify whereas on woo i can buy similar or even better for a once off fee (that pays for itself within 6 months when you take into account the subscription model) and so forth..

    Neto, just seemed to want money at every turn or slight variation i needed for my purposes.. There were a few other reasons, i felt like it was a platform you would become extremely sticky with as well (which implies difficult to remove yourself from easily) and i didnt really want that.. Also, from memory, when i investigated Neto there were all these plugins that were almost mandated that i get out of the box with Shopify - of which i just couldnt justify (cant recall what they were now)...

    Although Neto was a very appealing platform, i needed the dollars stripped down and could not justify the additional costs to what i could get elsewhere - also, a side business i do encouraged Shopify as i needed to learn it for that business (helping others on this platform in a round about way - not Shopify, but knowing it helped with my customers if that makes sense?)..

    Not sure that answers your query... but i hate sub models overall.... but i also hate own platform if it goes wrong.. LOL
  18. Blueedge

    Blueedge Member

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    I'll add my 10 cents worth here too, I feel like it such bad business practice to do this to customers. Surely, as a business, you do the numbers and work out your costs and price and charge accordingly. If you get it wrong, then you do need to increase your prices - heck, we've all been there. BUT, to charge customers over three times as much for the same service (or less service in some cases) is not very customer friendly.

    The trust has now gone and after hearing about their Telstra "takeover" this all makes sense. They (Telstra) wouldn't care about the smaller customers or business. We're between a rock and a hard place right now, we only went with NETO two years ago and have spent a lot of time getting both our online stores migrated into one. We looked at a few eCommerce complete hosting sites and chose NETO because it was Australian based, charge in Australian dollars and looked like great value.

    Shopify looks great, but is it more of the same? We want a totally hosted system because when we sell the company, any new owner will have a ready to go hosted system which they can just step into.

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