How do platforms that host crowdsourcing contests make money? Platforms capture value by taking a cut out of a firm’s budget. In particular, I am interested in the role of the fixed fee. Is it better to have a fixed fee and a budget-dependent fee or both? This is also called two-part tariff pricing and it is widely studied in economics.
Let me provide a few examples and will return to update this post as I find more information:
- Herox.com: Takes a percentage cut out of firm’s budget dedicated to the contest. There is no fixed fee charged. See: https://www.herox.com/pricing
- “We utilize a success fee model. Cost for the use of the HeroX Platform is based on a percentage of the prize value, invoiced only once you publish your challenge. HeroX allows you to get started on your challenge without any cost.”
- If you receive submissions and do not award a winner, we will refund 50% of your fee. If you do not receive any submissions and do not award winners, we will refund 100% of your fee.