Operations

Switching Costs — The Real Price of "Free"

Economist Paul Klemperer's classic 1987 paper defined **switching costs** as: the total price a consumer pays when moving from one product to another.

Applied to platform-merchant relationships, the concept cuts deeper than on consumers:

**The platform's free is bought with your future.**

The timeline looks like this:
- Year one: Free is great. Data migrated, clients booking, habits formed.
- Year two: The marketplace brings new clients; sure, 20% commission, but business is business. Client relationships accumulate on the platform.
- Year three: You notice the commissions adding up and start researching alternatives. Then you discover: client data exports fine (CSV), but client relationships don't — clients added Fresha's booking account, not your LINE; clients' booking habits, notification settings, and visit history all live on Fresha's balance sheet, not yours.

**Only then do you understand the full meaning of "free": the software is free because you are the product — your revenue flow, your clients, your future freedom of choice.**

Use Cases

Articles using this tool

經營管理

Why a "Free" Booking System Is Your Most Expensive Choice

Fresha is free. But online payments take 2.79%, and marketplace new clients take 20%. A salon with NT$300K monthly revenue pays NT$80-100K a year — more expensive than any paid system. And the costlier bill comes later: clients add Fresha, not you. Your repeat-client list lives in someone else's house.