15%

When talking amongst colleagues about the App Business and the requirements for such an industry, I always receive the same response after informing them about the 30% commission fees. Everyone says that is too high. I originally started doing this as a hobby but soon after turned into a passion. I do agree that the commission rate is high; however, handling everything on the store backend makes it worth it, in my opinion. That is unless YOU have a better solution to manage it all? If so, I’d love to hear it, contact me.

 

Is an App Store commission worth it for indie app developers?

 

I believe so, yes. The reason being is by paying the commission, developers will receive the following:

 

  • Developers don’t have to worry about the App Store being online 100% to handle millions of users.
  • Protect against attacks on the website.
  • Sale and subscription transactions.
  • Refunds.
  • Software licenses.
  • Protecting apps from being pirated.
  • Having an ecosystem of users willing to try new apps.
  • Etc…  

 

These App Stores, not just Apple, help indie developers get off the ground. The more established developers have options to self-publish on their own website, do both, or just stick to only being on the App Store. 

 

Fornite vs. Apple Fiasco

 

Keeping up with all the commotion about everyone being against Apple is interesting. To be clear, I do not associate with any of them. The business world isn’t all rainbows and sunshine, my friend. Sometimes we just have to roll with the punches. That is if you want to stay in the game.

 

The Fortnite vs. Apple legal battles make me question why Epic individuals would allow such a fatal move to knowingly violate the contract with Apple and Google Play Store? What did they expect would happen? In this scenario, I agree with Apple. Apple says Epic’s problems “Entirely self-inflicted”. 🍿  

 

App Store Small Business Program

 

Apple has recently introduced an “App Store Small Business Program” that will cut down app sale commissions for developers from 30% down to 15%. This is only available to those who earn less than 1 million dollars per year. 

 

The deadline to enroll in this program is December 18, 2020

 

This year has been exciting for app developers as Apple introduced Apple Silicon Mac’s and now offers lower commission rates that begin January 1, 2021. 

 

Drawbacks of the program

 

One major con of being in this program is developers are not allowed to transfer apps to another account. This is common for developers who acquire other app companies.

 

Conclusion

 

The year 2020 started off bad. I had so much hope for it but it caught us all off guard. I do not think there is anyone on earth that was not affected by this. On the bright side app developers can look forward to 2021 with Apple’s lowered commission rates and creating software for the Apple Silicon. 

 

Now we just need Google Play Store, Microsoft, and Amazon App Store to follow suit with lowered commission rates. 

Rock image

The thought of having a business, solely based on simply creating mobile applications through our creative minds to then be pushed off to a driven company that handles the transactions and logistics is simply amazing. 

The Opportunity

According to Internet Advisor “Across the world, about 3.5 billion people have a smartphone today” https://www.internetadvisor.com/smartphone-statistics

 

That’s over 3.5 billion people using smartphones every single day! Just take a moment to think about this. There are over 3.5 billion people who are a tap away from downloading your app. If this doesn’t make you excited, as far as seeing a great opportunity, then I don’t know what will. In another view, we can examine what it’s like for a retail store to get exposure. The store is stuck at 1 location in one city. Unless it’s able to open new stores and be online, it still has a problem with people not able to find them. Now for apps they still have a discovery problem, this is where niche apps come into play. If your app fills a need it is better positioned as all it takes is a tap away rather than needing to drive to a single located retail store which seems inconvenient.

The App Store Risks

If your apps are only available in one app store, or even all the top 5 app stores (iTunes, Mac App Store, Google Play, Amazon, and Microsoft), you are at mercy to them. 

Any policy changes they make, which they do quite often, can either, raise your profits, keep them steady, make app discovery harder, or put you out of business altogether, overnight, most of the time without notice. Not to mention some stores require annual fees to have the “privilege” to sell on their app store with of course a 30% cut from each app sale. The 30% cut the app stores take can be a bit hefty but for indie app developers like myself, I see it favorable since they are taking care of the app transactions, refunds, and an online marketplace.

Because of the many risks, it is always better to diversify through different app stores, or if your brave enough, sell direct to consumers through your own personal website. Although you need to set in place a merchant account to accept credit cards, transactions, refunds, ways to fight off pirates, more expensive website hosting services to handle the traffic, withholding taxes for every jurisdiction including overseas (app stores handles some of these), and advertising.

Conclusion

So the opportunity of over 2.1 billion smartphone users globally, this is definitely a great opportunity to be in for app developers. As with any type of business, there is always some kind of risk, the risks outlined here are the risks associated with app developers. It is really easy to get into this type of business and if you have the drive and consistency to do it, I don’t see why you wouldn’t be successful. You need to create valuable apps but not depend on just 1 app. I’ve read plenty of developers complain about how it doesn’t work for them or blame other circumstances instead of there own. It takes hard work and dedication to create new apps. There are apps that make money, ones that don’t even get 1 download but based on your situation the best solution is to just make a better one and move on. Complaining about a situation doesn’t get us anywhere or make us into a better person either. Tomorrow isn’t guaranteed but what is, is what we can control and that is our mind and how we respond to challenges, and if we have the courage to solve them, results will show up. 

Build out your app empire and watch the market grow with your app journey.