Is a prepaid subscription worth its discount?
How does prepaid compare with pay per order for you?
Enter your own numbers. The calculator starts on the worked example further down this page.
All results are estimates from your inputs, not figures from your store. The cancellation rate is your own assumption.
How does the prepaid calculator work?
It compares both ways of paying over the deliveries the prepaid plan covers:
- Prepaid price = price per delivery × deliveries paid upfront × (1 − prepaid discount): the cash you receive per subscriber at the start.
- Discount per prepaid subscriber = price per delivery × deliveries − prepaid price.
- Deliveries paid on average, pay per order = 1 + (1 − cancellation rate) + (1 − cancellation rate)² + … , one term per delivery: the first delivery is paid, each later one only by the subscribers who haven’t cancelled before it.
- Expected revenue per subscriber, pay per order = price per delivery × deliveries paid on average.
- Cash upfront = prepaid price × subscribers choosing prepaid.
- Prepaid vs pay per order = (prepaid price − expected revenue per subscriber, pay per order) × subscribers. Above zero, prepaid brings more.
- Cancellation rate above which prepaid brings more = the rate at which both bring the same.
What does 10% off for 6 deliveries upfront bring?
Example (made-up numbers): €25 per delivery, 6 deliveries paid upfront at 10% off, an assumed 8% of pay-per-order subscribers cancelling before each next delivery, and 200 subscribers choosing prepaid.
| Result | Calculation | Value |
|---|---|---|
| Prepaid price per subscriber, paid upfront | €25 × 6 × (1 − 10%) | €135 |
| Discount per prepaid subscriber | €25 × 6 − €135 | €15 |
| Deliveries paid on average, pay per order | 1 + 0.92 + 0.92² + … + 0.92⁵ | 4.92 |
| Expected revenue per subscriber, pay per order | €25 × 4.92 | €123 |
| Cancellation rate above which prepaid brings more | rate where €25 × deliveries paid = €135 | 4.2% |
| Cash upfront from all prepaid subscribers | €135 × 200 | €27,000 |
| Prepaid vs pay per order, all subscribers | (€135 − €123.01) × 200 | €2,397 |
With 12 deliveries at the same 10% off, a subscriber pays €270 upfront, and prepaid already brings more above about 1.9% cancellation per delivery. With 3 deliveries it takes about 10.4%: the longer the plan, the more cancellations its discount absorbs.
What does the estimate leave out?
- What happens after the prepaid deliveries. A prepaid subscription renews with a new upfront payment, which the comparison doesn’t count.
- Customers who choose differently. It assumes the same subscribers would otherwise have paid per order. It ignores customers a prepaid option might win who wouldn’t subscribe otherwise.
- The value of cash upfront. Money at the start can pay for stock, which the calculator doesn’t put a number on.
How does Zubs handle prepaid plans?
In a Zubs subscription plan, you choose for each delivery frequency how many deliveries customers pay for upfront and what discount they get. Customers see the price per delivery and the upfront total before they subscribe.
If prepaid comes out ahead, think about when you offer it. Few first-time buyers pay for months upfront; subscribers who have enjoyed a few deliveries are readier to commit.
Bottom line
A prepaid plan pays off when your pay-per-order subscribers would cancel before the prepaid deliveries are up. The higher your cancellation rate and the longer the plan, the more discount prepaid can carry, and the cash arrives upfront.
Frequently asked questions
- What cancellation rate should I enter?
- Your own assumption, the share of pay-per-order subscribers who cancel before each next delivery. With monthly deliveries, your monthly churn rate is a starting point.
- Why does the calculator say "Not reached"?
- When the prepaid price is lower than a single delivery at the regular price, pay per order brings more even if every subscriber cancels after the first delivery, so there is no break-even.
- Is my data stored or sent anywhere?
- No. The calculation runs in your browser, and nothing you enter leaves the page.