In this chart we compare the least expensive paid plans from Mailchimp and Sendgrid (the "Essentials"). For making an equivalent comparison, we assumed 10x emails sent per contact.

You may have started your newsletter for free on Mailchimp, and the monthly cost for a contact list in the high hundreds didn't break your bank. However, as your subscriber base grew, the cost grew fast, and you might have been wondering if it is worth switching your email marketing provider to save $$$?

Emails Sent vs. Contacts Saved

The pricing of Mailchimp (and many other SaaS products) depends on the number of contacts stored, and you get a set email quota per contact stored. You pay the set amount even if you don't send all the emails your quota allows. On the other hand, there may be overage charges if you do cross the limit.

Sendgrid offers email marketing plan like Mailchimp, and a cheaper email API service which you can use to send emails. By the volume of emails sent, Sendgrid is cheaper. For both Mailchimp and Sendgrid, you pay an overage fee when you go over your email (or contact) quota. The opposite is not true though: You are on the hook for paying the full monthly cost of your selected tier even if you are far below your allowed email quota.

In this chart we compare the pricier plans from Mailchimp and Sendgrid ("Standard" and "Pro", respectively), and show how the cost grows at higher volumes of emails sent. Note, Mailchimp Standard plan allows 12x emails per contact stored, but here we assumed 10x emails per contact so we can compare across different pricing structures.

On the other hand, Simple Email Service (SES) by Amazon Web Services (AWS) is a pay as you go service, and you manage your contacts outside this service on your own. As long as we are talking about just sending emails, it is by far the cheapest of these 3 services. As you see, these services are very different from one another, and it's not an apple-to-apple comparison.

Are you using the features that make the high monthly cost worth?

This brings us to the second point: Services like Mailchimp or Sendgrid offers you a lot more than just sending emails. For example, you can compare if one email title works better than another by performing an A/B test. You can do that on AWS SES, but you have to manage the grouping and do your calculations.
Mailchimp Essentials tier and the tiers above also allow you to cross-sell your products (``Personalized Product Recommendations''). But if you aren't using any of these features, you may not be getting your money's worth.

Pay As You Go Email Service From AWS

Pros:

• Much cheaper
• Comes with fewer bells and whistles -- which lets you be deliberate and thoughtful about what you need

Cons:

Requires a bit of software development knowledge/assistance to set things up

Contacts are to be managed outside the SES

Comes with fewer bells and whistles, if you are looking for those bells and whistle

Switching Inertia; Developer Cost

Once your subscriber base becomes big and you are busy growing your business, the idea of moving an essential aspect of your business could be daunting. And setting up AWS SES may need some coding work: e.g., managing your contacts in a database, connecting your content preparation / email drafting program to SES via API and so on.

On the other hand, if switching could save you hundreds of dollars a month (see chart above), any switching cost should be paid off over a short period of time, especially if you aren't using any of the special features such as A/B testing.

How We Can Help:

• Talk to us: We can discuss your case and help you decide if switching is the right decision for you.
• Or, perhaps you want to find out how you could utilize the advanced features such A/B testing on Mailchimp or Sendgrid. We can help you there as well.
• No Conflict of Interest – We are not in any affiliate partnership with any vendor and suggest solutions that work in our clients' interest.

A bit of planning now can make the transition way easier. Hope this helps, and feel free to send us your questions. Contact us if you would like to schedule a chat!