8 ms·

Imagine if the mall where you rent your store takes 30% of your revenue (plus a negligible fee). Now think of visa and mastercard that you use to charge your cu

• maratc 6y ago
  This depends on one's definition of "true competition". Specifically, what Judge YGR said on Apple/Epic case seems very relevant: > “Well plaintiffs always want me to define relevant markets as narrowly as possible. It helps their case. And defendants always want me to define markets as broad as possible, because it helps their case”
• deleted 6y ago
  [deleted]
• andruby 6y ago
  If that 30% includes the rent and maintenance of your store, as well as the checkout employees. And imagine that you are selling goods with almost zero marginal cost. Does it still sound that bad? Anyway, metaphors fail to help understand this situation in my opinion.
  • nirui 6y ago
    Problem is, the maintenance was for the entire mall with only very little done to your store, and the checkout employee that you mentioned can only do the one job with probably of taking your money as hostage. Also, in a real word mall, the rent and maintenance fee will not increase as you makes more money. Yes, they can try to sell you a better location for a higher price, but it's a mutually beneficial sell (You get a better location from the sell). My point: 30% was too much for what Google/Apple is providing. Let me also add: > And imagine that you are selling goods with almost zero marginal cost First of all, developing a product costs money, you need to pay everybody including yourself. After all that, advertising, user support etc all costs money. So even if Google/Apple wants other people to treat this service as a mall, it's not a mall, they don't even provide lighting, long bench, air conditioning and free toilet (all of these are inescapably expensive to maintain). Instead, it's more like a searchable list + content delivery service where people can search the item and then download it. They should design their fees more close to that. Now, imagine saying this to your user: "Hey dear user, yes, that 30% increase in price won't give you any advantage compare to those who directly purchased it from our website. Yes, it's expensive just because you brought it from Google/Apple, nothing else, because we end up receive the same amount of money.... yes, 30% every month for your subscription, and this is the only approved way for Google/Apple to allow us to provide our service to you."
    • xuki 6y ago
      > the rent and maintenance fee will not increase as you makes more money Nope, malls often charge a fixed rent PLUS a percentage of sales.
      • lotsofpulp 6y ago
        Franchises also take 15%+, and that is excluding card processing fees and chargeback costs. In a highly demanded location, it’s possible you’re paying a percentage of revenue to the land owner, the franchisee, the card networks, and of course the various governments.
    • ksec 6y ago
      >Also, in a real word mall, the rent and maintenance fee will not increase as you makes more money. Not exactly true, Mall will raise rent if you are making more sales, knowing you are making lots of money they want a bigger piece of it. And in many cases, they are taking a fix rent as well as percentage of sales. It kind of depends on your business segment and brand. For example Food Court and Restaurants operate on different terms, Super Market and Jewellery shops will have different arrangement. So it is a little more complicated.
  • Aerroon 6y ago
    Now imagine that the mall has 100,000 other stores in it as well. Your store is in the middle of some random other stores. It's not in a prominent position. Yeah, that sounds pretty bad.
    • votepaunchy 6y ago
      And imagine that the mall has over 1 billion customers. Not so bad.
      • rimiform 6y ago
        Those customers are also trapped in the mall, so you can't get their patronage if you're not in the mall. Good or bad depending on whom you ask.
  • deleted 6y ago
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• simonh 6y ago
  I think it's more similar to a McDonalds franchisee paying the mall 30% for unit rental security and utilities (Apple/Google), and paying McDonalds 30% for the franchise and rental of all the equipment, uniforms and training (Roblox).
• amelius 6y ago
  Imagine TSMC taking 30% of Apple's revenue.
  • emteycz 6y ago
    How do you know the cpu isn't 30% of the cost?
• sschueller 6y ago
  Also image the mall inspecting every color change you make to your dresses and randomly denying you to sell a certain dress... Sorry you can't sell that TV, it can be used to watch pornographie.
  • sunir 6y ago
    Malls can and will police stores for inappropriate merchandise and displays.
    • jimktrains2 6y ago
      And if you don't like those terms, there are other locations that can and, as long as your business is legal, provide you a location to rent or buy in which to conduct your business.
      • Schiendelman 6y ago
        You mean the one other mall in town with similar rules. :)
        • jimktrains2 6y ago
          There are options besides malls.
          • Schiendelman 6y ago
            And that non-mall is exactly like an app developer who has a website for distribution.
      • sunir 6y ago
        You can certainly find a digital version of a strip mall to sell your adult merchandise.
        • jimktrains2 6y ago
• donmcronald 6y ago
  Imagine the phone company taking 30% of revenue for every purchase (over LTE) on phones locked to their network. After all, without the network that sale wouldn’t have existed, so developers and retailers should just be happy for anything they get at that point, right?
  • sunir 6y ago
    The phone company isn’t market making. They aren’t aggregating and organizing buyers.
• danpalmer 6y ago
  I get your point, but stores paying ~30% of their revenue in rent isn’t out of the ordinary. Restaurants typically work on 30/30/30/10 for rent/wages/costs/profit.
  • jimktrains2 6y ago
    That isn't a contractual split, though. Edit: Also, equating the rent of a physical space with what amounts to a webpage and checkout seems ludicrous to me. Physical space, especially one suited to a particular business is limited asset, not to mention the taxes and other costs to the owner of the physical space incur which don't exist for an app store.
    • sunir 6y ago
      There are many mechanics in commercial agreements; they amount on average to similar outcomes. It’s all rent whether it is a percentage of the till or a fixed cost over a term; where the landlord raised costs upon renewal as the business value rises.
      • jimktrains2 6y ago
        Rent can be negotiated (although not usually done for residential leases, is for commercial ones) and the length can be, and often is, for more than a year. There isn't even the pretext of being able to negotiate the appstore cut. As I added in my edit, equating the rent of a physical space to an app store seems absurd to me, as well.
        • sunir 6y ago
          Whether or not the landlord is willing to negotiate isn’t a legal right. They are fully allowed to set their own terms. Your own feelings don’t make a basis for law. You’ll need to find a meaningful difference here that constrains the rights of the private parties to draft contracts as they wish.
          • 6y ago
• ezconnect 6y ago
  That's how mall operates on some countries, you pay rent and 30% of your gross revenue.
• ksec 6y ago
  Side Note: Judging from Real World examples, the next stage of this so called payment processing ( or what ever you like to call it, rent, Slotting fees etc ) will be to prolong the receivables / payment terms to 60 or may be even 90 days. ( These long term payment are not unusual in many other industries, in some cases it is in fact the norm ) It wont happen now, but in later stage of the cycle where they fail to find new sources of revenue or profits. One good thing with the current 45 days terms is that customer can ask for Refund of the past 30 days and Apple generally are pro customers. In the Mobile Gaming, Pay to Win Gaming Industry this gives tremendous power to the players / customers, especially those "whales" ( as they are called, meaning heavy / top spenders ) could threaten for refund. But there are also group of people who abuse this system and Gaming Developers have no way to appeal, it is literally Apple took away their's revenue. ( And it is even worst if those people sold their account before the Refund ) I still see Gaming, being 80% of App Store Revenue should be a separate store with separate set of rules. We cant have one size fit all solution to the App Store. And Apple needs to work better to help both its customers and developers.
  • bserge 6y ago
    That explains why in many gacha games, a refund leads to an immediate ban. Always thought that was too harsh.
    • ksec 6y ago
      Yes, Arcade in the old days, you cant expect to refund the game if you didn't like it. You move on to another game. There are of course some legitimate case for refund. Example I bought a package that has a Value, or Attack / Def Number of 100. The gaming company decide it was too over power and changed it to 80 without compensation. Now of course as a buyer I feel cheated because I bought it with the value of it being 100. And in case of App Store you can immediately ask for refund. Most developers are now aware of this problem so their solution was to inflate their next package to similar level to the Over Power Package, the problem with that is it devalue the current unit economics too much and player will refund and quit. Basically "In Game Economics" ( especially mobile gaming ) is not a well understand problem. ( And they dont seems to care since most mobile games has a very short life span ) Apart from very big companies like EA which has Data Scientist running and monitoring, most gaming company just goes by the flow. It is a bit like giving Games designers the job of Central Bank and they just keeping print money. Sometimes the balance is right, sometimes it is wrong and they destroyed the whole game.
• dnh44 6y ago
  Our company’s distributor for B2B physical products takes about 50%. For products that we just buy and sell rather make ourselves we have about a 40% margin. This is all quite normal. Additionally in my industry about 80% of the value chain is taken by the retail outlets. 30% would be pretty awesome for us. 30% is way less than a lot of other industries pay to have their products distributed to a market full of waiting buyers. I’ve read that writers of books only get about 10%.
• FriendlyNormie 6y ago
  Apple should increase their cut to 50%. Even a child knows 50/50 is fair. You’re aware the music industry’s cut from an artist is 70-80%, right? Look at me, I can throw out random whataboutisms too!
• m-p-3 6y ago
  At least if you find the mall price extortionary you could move somewhere else or even buy your own commercial space and manage the whole thing yourself. As you said, there's no competition on iOS, and a slight window of opportunity on Android with sideloading.
• quickthrowman 6y ago
  > Imagine if the mall where you rent your store takes 30% of your revenue They already do, it’s called “rent”.
  • Closi 6y ago
    I guess the difference is that I can go to another property with lower rent, and that the yield on store rents is tiny in comparison. Maybe it would be more similar if we said "Imagine if all the retail real-estate property was owned by 1-2 companies, and they took...".
• franklampard 6y ago
  > Imagine if the mall where you rent your store takes 30% of your revenue (plus a negligible fee) If they give me free rent and hand me a lot of customers, sure why not?
• soylentgraham 6y ago
  This is what has happenned in Lobdon's Camden Market. The owner has pushed out (and verbatim replaced) anyone who wouldn't pay % of revenue