4 ms·

As per the thread: You buy an app for $10, Apple gets $3, the developer gets $7. You refund the app (through the Apple App Store), you get your 10$ back, but

by sbarre 6y ago

As per the thread: You buy an app for $10, Apple gets $3, the developer gets $7. You refund the app (through the Apple App Store), you get your 10$ back, but that whole 10$ comes from the developer, unlike the 7/3 split when you first purchased it. So in the end, the developer has lost money due to the refund.

Spivak 6y ago
This is just sales commission rules though. If I get a 30% commission for a sale when the customer is referred by me and at some point in the future the customer asks for a refund I don't give my commission back. Our transaction was done when the original sale was made.
- LanceH 6y ago
  Apple doesn't refer a sale. Apple makes the sale. They are the store, something they have set up and enforced. The developer has no capacity to deny a customer, yet has the responsibility for the bad customers shopping someone else's store.
  - genidoi 6y ago
    Devils advocate argument: A refund (probably) reduces the LTV of customers, and Apple has no control of the cause of those refunds, whether it be a buggy app or misrepresenting features. The ethics of this scheme are debatable but it should be assumed that some refunds are legitimate and Apple loses tangible customer $LTV from some refunds.
- sbarre 6y ago
  This is not a valid comparison, there is no referral or commission happening here. Compare it more to sales tax, which is a much closer comparison because it is required as part of the transaction in a monopoly ecosystem (much like a sales tax is in a country). If a vendor adds tax to a price, and then charges the customer, and the customer gets a refund, the customer get the sales tax back, but the vendor then doesn't have to remit that tax to the government (and if they've already remitted it, they can apply for a credit).
  - Spivak 6y ago
    I mean would it feel better if you got paid $10 but then Apple immediately billed you $3 for marketing and sales services? Because that’s basically Apple’s whole thing. If you want you can just ignore their existence. You can run a very successful business on the web, Android, Windows. But getting your app on iOS and in front of their customer base is really valuable. Better than any billboard or FB ad. They know that customer acquisition is hugely expensive and that being able to sell on their platform will make you more money than not and so they charge like it. The difference between having Spotify on iOS that can’t mention that premium exists (because that would be using iOS as a marketing vector which Apple charges for) and therefore has to do their own customer acquisition, and being able to convert customers in-app makes a big difference.
    - sbarre 6y ago
      That's just changing the subject. We were talking about selling in the iOS ecosystem, and the mechanics of that process. No one said there weren't other options, and "take your ball and go home" is obviously always an option but that's not what was being discussed. (Note that it turns out that Apple does not keep their 30% when it refunds an app, so the original point wasn't valid).
sercand 6y ago
This is wrong. I just looked at our app store connect Sales and Trends page and for a $10 item: Apple proceeds $7 to developer and takes back $7 again from the developer on a refund.
- sbarre 6y ago
  Thank you for clarifying this, I also found this out via other means, and I've added my own reply under my post to indicate that. Lesson learned for me to verify claims before supporting them!
sbarre 6y ago
I'm adding this under my own post because it turns out this is false, and I just parroted something that wasn't true: https://twitter.com/twolivesleft/status/1288625617873694721 https://twitter.com/twolivesleft/status/1288625617873694721 Apple does not keep the commission when an app is refunded.

by sbarre 6y ago

Spivak 6y ago

This is just sales commission rules though. If I get a 30% commission for a sale when the customer is referred by me and at some point in the future the customer asks for a refund I don't give my commission back. Our transaction was done when the original sale was made.

LanceH 6y ago
Apple doesn't refer a sale. Apple makes the sale. They are the store, something they have set up and enforced. The developer has no capacity to deny a customer, yet has the responsibility for the bad customers shopping someone else's store.
- genidoi 6y ago
  Devils advocate argument: A refund (probably) reduces the LTV of customers, and Apple has no control of the cause of those refunds, whether it be a buggy app or misrepresenting features. The ethics of this scheme are debatable but it should be assumed that some refunds are legitimate and Apple loses tangible customer $LTV from some refunds.
sbarre 6y ago
This is not a valid comparison, there is no referral or commission happening here. Compare it more to sales tax, which is a much closer comparison because it is required as part of the transaction in a monopoly ecosystem (much like a sales tax is in a country). If a vendor adds tax to a price, and then charges the customer, and the customer gets a refund, the customer get the sales tax back, but the vendor then doesn't have to remit that tax to the government (and if they've already remitted it, they can apply for a credit).
- Spivak 6y ago
  I mean would it feel better if you got paid $10 but then Apple immediately billed you $3 for marketing and sales services? Because that’s basically Apple’s whole thing. If you want you can just ignore their existence. You can run a very successful business on the web, Android, Windows. But getting your app on iOS and in front of their customer base is really valuable. Better than any billboard or FB ad. They know that customer acquisition is hugely expensive and that being able to sell on their platform will make you more money than not and so they charge like it. The difference between having Spotify on iOS that can’t mention that premium exists (because that would be using iOS as a marketing vector which Apple charges for) and therefore has to do their own customer acquisition, and being able to convert customers in-app makes a big difference.
  - sbarre 6y ago
    That's just changing the subject. We were talking about selling in the iOS ecosystem, and the mechanics of that process. No one said there weren't other options, and "take your ball and go home" is obviously always an option but that's not what was being discussed. (Note that it turns out that Apple does not keep their 30% when it refunds an app, so the original point wasn't valid).

sercand 6y ago

This is wrong. I just looked at our app store connect Sales and Trends page and for a $10 item: Apple proceeds $7 to developer and takes back $7 again from the developer on a refund.

sbarre 6y ago
Thank you for clarifying this, I also found this out via other means, and I've added my own reply under my post to indicate that. Lesson learned for me to verify claims before supporting them!

sbarre 6y ago

I'm adding this under my own post because it turns out this is false, and I just parroted something that wasn't true: https://twitter.com/twolivesleft/status/1288625617873694721 https://twitter.com/twolivesleft/status/1288625617873694721 Apple does not keep the commission when an app is refunded.