Shrink-wrap software - purchaser license agreement

Discussions
#1

Wondering if anyone else has encountered something similar to this (just had it happen for the second time in 10+ years of trading): I sell shrink wrapped software that can be bought and downloaded with a simple credit card form. It has an EULA the purchaser must accept if they want to purchase and download the software.

Now a large financial company has indicated they wish to buy a license, but I need to agree to their 19 page license agreement, in addition to them agreeing to my own EULA.

I’ve pushed back saying that I can have a lawyer check it and our price will reflect that, plus any extra work needed on our part for extra obligations under their license.

Has this happened to anyone else? I’m really curious as to what large companies like Microsoft or Adobe would do when presented with something like this as well. Laugh at them I suspect.

Allan

#2

I encounter this nonsense quite regularly. My favourite unrealistic scenario is when a customer purchases our bootstrapper plan, and then AFTER the purchase their legal department contacts me telling me they need a bunch of changes to our terms and conditions.

Here’s a canned response for you:

“Hi, we are a 3-person team selling a $99 product. I’m afraid we won’t be able to sign this.”

Replace $99 with your product price.

Chances are they’ll find a way to purchase it anyway. And if they don’t, well, they weren’t the right customer for you.

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#3

… OR it’s an excuse for you to unveil your pricey enterprise licencing options.

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#4

Good point! Here’s my standard response in this case:

Hi,

We can provide custom licensing as part of our enterprise plans which start at $1,000/mo or $10,000 annually.

Please let me know if you’d still like to continue the conversation given the above. We’d love to have you as a customer!

It usually has the effect of making our standard plan acceptable after all.

1 Like
#5

Haha - funny that. That’s basically where I’m at with this customer now (purchasing want to know why I won’t sign it, the guy who want’s to use it, just wanted them to buy the darn thing).

Thanks :slight_smile:
Allan

#6

They may be considering more than one license purchase. There may be an opportunity for a larger deal. It’s very unusual for purchasing to get involved in a small dollar (less than $10,000) single license deal. Happy to help you walk around the situation, it’s a challenge I help teams with frequently.

Sean Murphy www.skmurphy.com 408-252-9676

#7

Interesting! I seem to need to deal with purchasing for around 1 out of ever 25 sales (at a rough guess, it might be less) - perhaps its just because of our market niche. I’ve only had this nonsense twice in 10+ years of trading, and the approach of “it will cost you more” is one I’m comfortable with. There is no way these sales are going to turn into $x,000 sales - its a $119 piece of software (they’ve already said they just want once license) :-).

Thanks for the offer though!

Allan

1 Like
#8

I get this occasionally. I just tell them that we don’t do custom license agreements. They often find a way to buy anyway. I definitely wouldn’t agree to their 19 page agreement without a lawyer and its not worth getting a lawyer involved unless it is for big bucks.

#9

Tell them you will customize the software package for them at additional price, plus the cost of lawyer review of their agreement.

When they say yes, slap a virtual sticker on the software download with the name of their company. Done. Customized.

#10

The yearly cost for custom license software is:

The cost of E&O insurance for 10+ years in the jurisdiction of the contract, the administrative cost of acquiring such insurance, the cost of custom compliance measures and the cost of all the policy bookkeeping that all the E&O insurance requires (like stuff completely unrelated to this license). This is roughly 2-10k a year for many concerns. If they’re interested in a 10 year commitment at 15-20k a year, this might be a profitable sell. Otherwise, you are not necessarily able to profitably sell to them.

#11

Here’s the FAQ we wrote about this: Will Balsamiq Sign My Purchasing-Related Form or Sign up for My Vendor Portal? | Balsamiq - it has worked for years. Feel free to copy it! :slight_smile:

4 Likes
#12

@peldi - Thanks for the link! I might indeed create a similar document.

We never register for customer vendor portals (creating an account on your system)

I found this one interesting. I’ve had two recently (both government entities) that require a sign up to allow invoices to be sent into them. In both cases a really painful experience!

Allan

#13

If they have told you they only ever plan to buy one license then you can ask them to please sign your license agreement and ignore their request to sign theirs.

#14

@Steve, I react the same, the product is what it is at the price it has. I sell a B2C product. From time to time I get a specific request from a school or training location for a group license or extra phone support. I learned that it’s a lot easier to not have special conditions for certain customers. It overcomplicates the business and for me, the extra paperwork and legal stuff takes the joy out of it.

2 Likes
#15

Well played @peldi. The more we all push back against pointless, soul-sucking busywork and meaningless box checking, the better. Or, if you really need the sale, get a ‘reseller’ to do the busywork. It is about time they did something for their money. ;0)

BTW, to get a sizable contract, I once signed an anti-corruption agreement with a big company from one of the most corrupt industries in the world, based in one of the most corrupt countries in the world. And don’t get me started on signing anti-slavery agreements.

1 Like
#16

In our line of work mutual NDAs, BAAs, vendor portals and similar shit is just the name of the game. As much as I don’t like it we have no choice when our average ticket price is 15K / year.

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