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But to play devil's advocate; it's not the same as retail - Apple don't buy stock and sell it on. Apple (and Google) provide a space to sell Apps. They operat

by lwhi 16y ago

But to play devil's advocate; it's not the same as retail - Apple don't buy stock and sell it on. Apple (and Google) provide a space to sell Apps. They operate more like a department store which rents space to individual concessions. I don't think a department store would necessarily take 30% of all sales made within it.

SeanLuke 16y ago
The average markup for a department store is 50% to 80%. Meaning that they take 33% to 44% of sales.
- lwhi 16y ago
  Maybe when the store is owned by one company, but is this true for a concession operating within a department store?
vacri 16y ago
Apple don't buy stock and sell it on. Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler. If you buy ten shirts from a wholesaler, they get paid for ten shirts. If you buy ten apps from a wholesaler, they get paid for ten apps. I don't think a department store would necessarily take 30% of all sales made within it. A department store has different expenses, but yes, a good quality department store will take that cut and higher. Apple and Google are not just providing market space. They also provide quality review and payment processing. It's not like your Sunday market where you pay a fixed price, take a fixed amount of stock, and then spend your own time hawking your wares and dealing with payment. Instead it's a market where you supply your stock once and take royalties on it. Apple/Google take over some of the advertising and all of the payment processing. You don't have to worry about bad credit cards. Or making the payroll. Or keeping the servers up. In fact, that's the better way to look at it - rather than a bricks-and-mortar store comparison, apps are more like music or prose. You do the work once. You can rerelease the work if you like. It's in your own interest to help market the work, but you don't have to. But once the work's done, you can just sit back and let someone else deal with making money for you if you like. That sounds more like royalty-based industries than brick-and-mortar shops. And compared to other royalty-based industries, in this case it's the artists taking the corps to the cleaners! Seriously though - they've sunk heavy investment into the product, why should they go for cut-throat margins in a booming industry? Besides, it comes off as whining for suppliers to have to pay a very normal fee for services supplied
- metageek 16y ago
  >>Apple don't buy stock and sell it on. >Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler. That's not a valid comparison. The retailer's markup includes the risk that they won't be able to sell the product. (OK, OK, unless the product is books.)
shaggyfrog 16y ago
Anyone who's incensed at a 30% cut for Apple/Google, when they offer a turn-key merchant solution and a huge potential sales base, has probably never heard of the publishing arrangements on other console platforms, like Sony Playstation (or Xbox or...). Small devs get absolutely raked over the coals by the high costs associated with getting a game pressed onto discs and onto a store shelf. 30% is a laugh.
- lwhi 16y ago
  It would be fairer to make a comparison with a purely online gaming distribution model like Steam. Apple and Google don't have as many realworld costs once their infrastructure is working and is in place.
  - shaggyfrog 16y ago
    Steam doesn't manufacture or support the hardware its clients use, though. Steam targets computers, not consoles or console-like devices.
    - lwhi 16y ago
      I don't understand what you're trying to say. The manufacture of hardware is entirely separate to the operation of a software marketplace.
      - shaggyfrog 16y ago
        Steam doesn't have the overhead of creating, advancing, and supporting an entire hardware infrastructure. Which means less costs relative to Apple. So no kidding they take a smaller cut.
        lwhi 16y ago
        Any corporation is a very large organisation, the people who design the phones aren't working two jobs .. there are different departments which create and depend upon different revenue streams. In any case, the hardware is SOLD to the consumer, not given away. I don't understand your point. I was simply stating stream would make a better comparison than a console manufacturer selling games on physical media.

by lwhi 16y ago

SeanLuke 16y ago

The average markup for a department store is 50% to 80%. Meaning that they take 33% to 44% of sales.

lwhi 16y ago
Maybe when the store is owned by one company, but is this true for a concession operating within a department store?

vacri 16y ago

Apple don't buy stock and sell it on. Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler. If you buy ten shirts from a wholesaler, they get paid for ten shirts. If you buy ten apps from a wholesaler, they get paid for ten apps. I don't think a department store would necessarily take 30% of all sales made within it. A department store has different expenses, but yes, a good quality department store will take that cut and higher. Apple and Google are not just providing market space. They also provide quality review and payment processing. It's not like your Sunday market where you pay a fixed price, take a fixed amount of stock, and then spend your own time hawking your wares and dealing with payment. Instead it's a market where you supply your stock once and take royalties on it. Apple/Google take over some of the advertising and all of the payment processing. You don't have to worry about bad credit cards. Or making the payroll. Or keeping the servers up. In fact, that's the better way to look at it - rather than a bricks-and-mortar store comparison, apps are more like music or prose. You do the work once. You can rerelease the work if you like. It's in your own interest to help market the work, but you don't have to. But once the work's done, you can just sit back and let someone else deal with making money for you if you like. That sounds more like royalty-based industries than brick-and-mortar shops. And compared to other royalty-based industries, in this case it's the artists taking the corps to the cleaners! Seriously though - they've sunk heavy investment into the product, why should they go for cut-throat margins in a booming industry? Besides, it comes off as whining for suppliers to have to pay a very normal fee for services supplied

metageek 16y ago
>>Apple don't buy stock and sell it on. >Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler. That's not a valid comparison. The retailer's markup includes the risk that they won't be able to sell the product. (OK, OK, unless the product is books.)

shaggyfrog 16y ago

Anyone who's incensed at a 30% cut for Apple/Google, when they offer a turn-key merchant solution and a huge potential sales base, has probably never heard of the publishing arrangements on other console platforms, like Sony Playstation (or Xbox or...). Small devs get absolutely raked over the coals by the high costs associated with getting a game pressed onto discs and onto a store shelf. 30% is a laugh.

lwhi 16y ago
It would be fairer to make a comparison with a purely online gaming distribution model like Steam. Apple and Google don't have as many realworld costs once their infrastructure is working and is in place.
- shaggyfrog 16y ago
  Steam doesn't manufacture or support the hardware its clients use, though. Steam targets computers, not consoles or console-like devices.
  - lwhi 16y ago
    I don't understand what you're trying to say. The manufacture of hardware is entirely separate to the operation of a software marketplace.
    - shaggyfrog 16y ago
      Steam doesn't have the overhead of creating, advancing, and supporting an entire hardware infrastructure. Which means less costs relative to Apple. So no kidding they take a smaller cut.
      - lwhi 16y ago
        Any corporation is a very large organisation, the people who design the phones aren't working two jobs .. there are different departments which create and depend upon different revenue streams. In any case, the hardware is SOLD to the consumer, not given away. I don't understand your point. I was simply stating stream would make a better comparison than a console manufacturer selling games on physical media.