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Given the state of the App Store, that placement is the equivalent of a needle on that grocery shelf. So now on top of the 30% you give Apple, you also have to

Given the state of the App Store, that placement is the equivalent of a needle on that grocery shelf. So now on top of the 30% you give Apple, you also have to buy ads in that same store for it to be more visible to users (assuming a competitor hasn’t outbid you). And that 30% you’re already paying? It doesn’t replace your marketing requirements one bit, so that “placement” by Apple doesn’t justify that fee.

doctor_eval 6y ago
No I think you misunderstand. I’m not saying the 30% is Ok, nothing like that. I’m just saying that if you want to understand why it’s 30%, perhaps looking at other storefronts is better than just comparing it to the raw card fees. A quick google suggests I’m right [0] - Coles is a large Australian supermarket chain that makes gross profit of 24.4%, which after card and infrastructure is probably about Apple’s GP on the App Store. So sure, 30% is a lot, and I personally think it should be less, but it seems very much in line with other storefronts. [0] https://www.gurufocus.com/term/grossmargin/GREY:CLEGF/Gross-Margin-Percentage/Coles%20Group https://www.gurufocus.com/term/grossmargin/GREY:CLEGF/Gross-...
- sebastien_b 6y ago
  My point is that, regardless of their cut, the "exposure" the App Store supposedly brings is likely practically nil, unless you're lucky enough to get 'featured' by them. So it's not like you end up being able to save costs by getting rid of your marketing department because "hey, you're on the App Store!". Additionally, you're not allowed to sell the same software at a different, higher, cost to make up for Apple's cut, so you effectively and up losing even more revenue, since you need to keep your own existing marketings costs, maybe even have to pay into Apple's ads on top of your 30% to market there as well for actual exposure, since you essentially end up as a needle in a haystack, because the App Store is full of cheap crappy apps that Apple is pushing developers to create to fill up their store, because "courage". (edit: I read from other comments that differing costs seem to be allowed now - "Hallelujah, it's a fucking miracle!") Additionally you don't have any option of providing the download yourself-they force you to use their "service", and hence "pay" for said service, instead of being able to control that cost yourself. Because "courage". And besides, I don't see how comparing fee structures between completely different industries as justification for Apple's cut is a valid argument in this case ("they do it too" or "they're even more" means the other guys are just as bad or worse - it's shouldn't be a pissing match of "who's worse?").
  - doctor_eval 6y ago
    I keep saying this, I’m not trying to validate it, I’m trying to understand it. And anyway, almost all of your points also apply to supermarkets. You think app stores and supermarkets are somehow different kinds of markets but they are not. Economically, apps and food are both commodities, and App Store and supermarkets exist to concentrate the audience in order to generate profit, not for their suppliers. Australian supermarkets are renowned for screwing their suppliers, for example. It’s probably no coincidence that their gross margins are similar too. Maybe you can come up with another established market that deals in huge volumes of undifferentiated goods in a single market? Large DIY stores come to mind. Apart from scale, why do you think the economics of the App Store are appreciably different from these other marketplaces? Anyway - I seem to be jettisoning all of my karma trying to explain how we can frame the problem in order to understand it, because understanding something is the only way to change it. But nobody seems to understand my points let along agree with them, so I’ll stop now.

doctor_eval 6y ago

No I think you misunderstand. I’m not saying the 30% is Ok, nothing like that. I’m just saying that if you want to understand why it’s 30%, perhaps looking at other storefronts is better than just comparing it to the raw card fees. A quick google suggests I’m right [0] - Coles is a large Australian supermarket chain that makes gross profit of 24.4%, which after card and infrastructure is probably about Apple’s GP on the App Store. So sure, 30% is a lot, and I personally think it should be less, but it seems very much in line with other storefronts. [0] https://www.gurufocus.com/term/grossmargin/GREY:CLEGF/Gross-Margin-Percentage/Coles%20Group https://www.gurufocus.com/term/grossmargin/GREY:CLEGF/Gross-...

sebastien_b 6y ago
My point is that, regardless of their cut, the "exposure" the App Store supposedly brings is likely practically nil, unless you're lucky enough to get 'featured' by them. So it's not like you end up being able to save costs by getting rid of your marketing department because "hey, you're on the App Store!". Additionally, you're not allowed to sell the same software at a different, higher, cost to make up for Apple's cut, so you effectively and up losing even more revenue, since you need to keep your own existing marketings costs, maybe even have to pay into Apple's ads on top of your 30% to market there as well for actual exposure, since you essentially end up as a needle in a haystack, because the App Store is full of cheap crappy apps that Apple is pushing developers to create to fill up their store, because "courage". (edit: I read from other comments that differing costs seem to be allowed now - "Hallelujah, it's a fucking miracle!") Additionally you don't have any option of providing the download yourself-they force you to use their "service", and hence "pay" for said service, instead of being able to control that cost yourself. Because "courage". And besides, I don't see how comparing fee structures between completely different industries as justification for Apple's cut is a valid argument in this case ("they do it too" or "they're even more" means the other guys are just as bad or worse - it's shouldn't be a pissing match of "who's worse?").
- doctor_eval 6y ago
  I keep saying this, I’m not trying to validate it, I’m trying to understand it. And anyway, almost all of your points also apply to supermarkets. You think app stores and supermarkets are somehow different kinds of markets but they are not. Economically, apps and food are both commodities, and App Store and supermarkets exist to concentrate the audience in order to generate profit, not for their suppliers. Australian supermarkets are renowned for screwing their suppliers, for example. It’s probably no coincidence that their gross margins are similar too. Maybe you can come up with another established market that deals in huge volumes of undifferentiated goods in a single market? Large DIY stores come to mind. Apart from scale, why do you think the economics of the App Store are appreciably different from these other marketplaces? Anyway - I seem to be jettisoning all of my karma trying to explain how we can frame the problem in order to understand it, because understanding something is the only way to change it. But nobody seems to understand my points let along agree with them, so I’ll stop now.