6 ms·
You're forgetting development and marketing costs. If there is a sunk cost component that number skyrockets. Try adding a $5 customer acquisition and $1 devel
by waheoo 6y ago
You're forgetting development and marketing costs.
If there is a sunk cost component that number skyrockets.
Try adding a $5 customer acquisition and $1 developer time.
Thats a $1 profit, you need to sell 3 apps to cover the cost of apples fees. You also need to sell another 6 to cover the sunk costs you don't get back.
So 1 refund costs you 9 sales.
To cover the 1/10, you'll need to charge 10.90, or more likely 11 to cover the moving 30%.
But this is just to break even with your original $1 profit margin.
- jachee 6y agoI'd argue that if 10% of your paying customers are refunding your product, you have a product problem.
- waheoo 6y agoDepends on your product, model, and demographic. At work our refund rate is like 30% for Japan. Investigating this, it turns out there is a cultural behaviour where converting at a higher rate early and refunding if it's not a good fit is the normal way of doing things. And in a past life, general 4% refund/return rate is pretty common across most ecom markets. Not saying apps are in this boat but if you ignore refunds in business you're in for a bad time.
- jaifraic 6y agoOr a userbase that for some reason dislikes and abuses you. Maybe you have made enemies because of some random political statemant. A large enough group could ruin you.
- gerdesj 6y agoI deliberately simplified things. My "10" is the costed price of the app. Ignoring all other factors, flogging the app on Apple automatically introduces a parasitic "tax". That is the hallmark of a monopoly.