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I looked into this some time ago, and 30% is roughly the same retail margin you pay when buying essentials like groceries (at least in Australia). So I honestl

I looked into this some time ago, and 30% is roughly the same retail margin you pay when buying essentials like groceries (at least in Australia). So I honestly don’t understand the angst around this. It seems like there is this idea that the only cost associated with hosting apps on the App Store is the transaction fee, but that’s only part of it. Apple is a for-profit company, and their margin is in line with other industries. I’m not defending the shitty things they’ve done, I just don’t understand why people think 30% is excessive.

SilverRed 5y ago
The difference is that retail is split over many companies and there is good competition. You also have the option to open your own store to sell your products. You don't realistically have that option for phones. It's insane to require a company to build their own phone hardware, OS, app store, and get the majority of people to switch over to it before you can sell books without paying a 3rd party for it.
mthoms 5y ago
Retail typically has low single-digit profit margins and a massive inventory risk. Apple has zero risk and 80% profit margins (on the App Store anyways). Lastly, retail stores are where you typically purchase one-off items. They don’t keep charging you for that refrigerator month after month. The two business models aren’t really comparable.
- doctor_eval 5y ago
  No, I’m talking about groceries. Food, stuff you need to live. Gross margins in Australia for the top two chains were about 28% last I looked.
  - mthoms 5y ago
    Profit margin is more useful metric to determine if you're being gouged - Grocery stores: < 3% Profit margin, huge inventory risk. App store: > 70% profit margin, zero inventory risk. Put another way: If grocery stores cut gross margin by a couple points they'd be out of business. They are basically charging the absolute bare minimum they need to make a profit. The reason? Competition. Apple could drop their App Store gross margin by 50% and still have one of the most lucrative operations in the world.

SilverRed 5y ago

The difference is that retail is split over many companies and there is good competition. You also have the option to open your own store to sell your products. You don't realistically have that option for phones. It's insane to require a company to build their own phone hardware, OS, app store, and get the majority of people to switch over to it before you can sell books without paying a 3rd party for it.

mthoms 5y ago

Retail typically has low single-digit profit margins and a massive inventory risk. Apple has zero risk and 80% profit margins (on the App Store anyways). Lastly, retail stores are where you typically purchase one-off items. They don’t keep charging you for that refrigerator month after month. The two business models aren’t really comparable.

doctor_eval 5y ago
No, I’m talking about groceries. Food, stuff you need to live. Gross margins in Australia for the top two chains were about 28% last I looked.
- mthoms 5y ago
  Profit margin is more useful metric to determine if you're being gouged - Grocery stores: < 3% Profit margin, huge inventory risk. App store: > 70% profit margin, zero inventory risk. Put another way: If grocery stores cut gross margin by a couple points they'd be out of business. They are basically charging the absolute bare minimum they need to make a profit. The reason? Competition. Apple could drop their App Store gross margin by 50% and still have one of the most lucrative operations in the world.