6 ms·

$21,243 in 8 Days: Why AppSumo is Going to Keep Crushing It

83 points by trg2 14y ago

louhong 14y ago
This is great, thanks for the breakdown. Never dealt with Noah or the AppSumo guys but I get all their emails. Really nice to know there are guys behind it all and they're being conscientious with what they are sending out.
BallinBige 14y ago
Nice backlink to PayPal.com :)
unreal37 14y ago
Very interesting review. I also get the AppSumo email (although rarely read them any more), but good to see people are seeing much success with it.
nathanbarry 14y ago
I've heard that AppSumo's percentage is as high as 75-80%. Is what you got for your product?
trg2 14y ago
Not sure if I'm allowed to talk about commission percentages, so I will refrain. However, I can reiterate that the commission rate is extremely high, but has proven to be well worth it.
- arkitaip 14y ago
  Why shouldn't you be allowed?
stevencorona 14y ago
I read the article and now all I want to know is what % AppSumo takes. Super high like.. 90%?
- manuelflara 14y ago
  I think Groupon takes 50% and it's mostly actual physical products (like a meal at a restaurant), so I wouldn't be surprised if AppSumo takes something like 70%.
- tbrooks 14y ago
  It's no secret - 50-75%
rjsamson 14y ago
I actually picked up a few great deals from AppSumo right around the time they launched, but I feel like the quality content / products offered through there has gone down significantly over time - this is not a knock on the OP's course, I'm sure its quite good, its just that AppSumo used to have great stuff - I used to look forward seeing what they had each week - and now when I get their emails its kind of 'meh'. Or am I the only one who feels this way?
- manuelflara 14y ago
  I feel the same way. I used to look forward to discounted web apps. Through AppSumo I actually got to know one of my favorite ones that I use every day, all day: Freckle. I also found out about other discounts to web apps I had considered subscribing to but I didn't have a reason to do it now. Well, a time based huge discount is a good reason! Now it seems it's mostly the same online courses all the time. Copywriting, launch your business, etc.
- taskstrike 14y ago
  Feel the same way, now it's a site for trashy info products instead of actual useful software on sale. Probably the margin is higher selling to people who want to know "the easy way" of starting a startup.
- run4yourlives 14y ago
  This is the first time I've ever visited AppSumo, and my first impression is that it seems to be a collection of - overpriced - get rich quick schemes and apps of a dubious value. A shame because the basic concept seems to be a great idea.
- OzzyB 14y ago
  So if AppSumo does take a hefty commission in the 50%+ 75% range (as mentioned in other comments here), that would pretty much explain the decline in quality of goods offered. I personally wouldn't mind selling my (imaginary) e-course/book and only get 25% of proceeds -- for other, more tangible things, not so much. Not knocking the story though, interesting stuff.
Zaheer 14y ago
I really wish AppSumo would change their homepage. Apart from the tag line (and reading the article), I had no clear idea what AppSumo did.
- hcarvalhoalves 14y ago
  That's exactly the point, so you just click "Login with Facebook".
  - untog 14y ago
    Right, but... I'm not going to do that unless I know what I'm clicking.
    - larholm 14y ago
      I feel the same. I got more information about AppSumo from their Google search excerpt than from their website.
  - TillE 14y ago
    That seems like the sort of practice which is fine for normal users, but terrible when your market is developers. Facebook apps in particular have a bad history of sticking crap in your profile and spamming your friends. I don't mind logging in with Google OpenID because I know it just gives you my name and email address, and that's it.
jasonwilk 14y ago
Not surprised to see Noah being a customer service boss. He is a tireless entrepreneur and a great guy.
jusben1369 14y ago
The good news is if they're taking a split of the revenue with you then at least when they say "Let's lower the price!" they also have skin in the game. 50 - 70% may seem like a lot. If you really only think you'll do a one time sale and not repeat sales then it might be too high. However, I assume that if you have a good service or offering that you'll get future repeat sales? So it's a marketing expense to capture a customer and the more confident you feel around the "lifetime value" of a customer the more you might be ok with such a big up front or initial revenue share cost.
astrojams 14y ago
Excellent well crafted title for Hacker News. This is exactly the sort of content that does well here and hopefully will help you sell more passes to your courses.
deleted 14y ago
[deleted]
salman89 14y ago
Considering a $50 discount and a guess of 70% for AppSumo, OP paid an effective $120 CPA. In return, did OP gain lifetime value from bought actions? Did he increase exposure for his book so that more people will buy at full price? Will he have repeat customers? Is this a positive ROI move? I think that is a better metric to measure this type of _marketing_, not "we sold x copies in y days!!". I understand that there is no variable cost, but by offering a permanent "discount", OP may have permanently devalued his product. If that steep of a cut was viable, then author might have had a bad price point to begin with. In general, the same thing must be considered for products with little to no variable costs. I'm not sure what the optimal solution is, but I would think that one would want to sell even at $0.01 - because a sale on a product with no variable cost has to be better than no sale at all...
- patio11 14y ago
  I would think that one would want to sell even at $0.01 You definitely don't want to do that. You're going to be overwhelmed with support requests (for an e-book, even!) from the least competent potential users imaginable. Moreover, you're going to blunt the reason for writing the book in the first place, because the people best positioned to get value from the book will not do so because it is too cheap to be taken seriously as business advice.
  - ovi256 14y ago
    You are right for $0.01 cost, but I wonder if that changes for $0.01 profit. What if your COCA (cost of customer acquisition) eats all but $0.01 of the revenue ? You are bringing in positive marginal revenue, and you don't have the downside you mentioned. Of course, you have others, such as this cost structure means you're making someone else rich, not yourself, and it's a very fragile situation, you can't absorb COCA increases.
- liquidcool 14y ago
  Yeah, I came to write something similar. With a 34% discount, then a >50% commission he's selling for 1/3 of his usual price, and like Patrick says, this is further reduced by support costs from, well, cheap customers. It is like Groupon, but most Groupon successes make money from full priced add-ons, and I don't see that here. A $100+ CPA is also a great way to think about it. I think you could get some decent affiliate traffic (which is what this is, really) for half that. Side note: I visited App Sumo's site as a non member and there's nothing to tell me what the site is, or why I should sign up, other than it's a "store for entrepreneurs." Presumably they expect you to Google what it is, or perhaps more likely, arrive having already been explained elsewhere what it is and decided you want in. But it seems strange they wouldn't want more control over the message. I'm assuming this works for them, but I'm not sure why.
bluetshirt 14y ago
Gypsy ninjas? Gypsy is a highly offensive ethnic slur practically everywhere in the world except America.
- cobrausn 14y ago
  http://en.wikipedia.org/wiki/Gypsy_(term)#Gypsy http://en.wikipedia.org/wiki/Gypsy_(term)#Gypsy The word 'slur' is not mentioned once on that page. At best, its use as an offensive slur is context sensitive (at least according to http://en.wikipedia.org/wiki/List_of_ethnic_slurs http://en.wikipedia.org/wiki/List_of_ethnic_slurs).
  - mattmanser 14y ago
    It does actually mention it's an insult a lot of the time half way down the page. You wouldn't use it as an ethnic slur like 'roast beef', people accuse others of being a gypsy or a pikey. It is 'considered to carry pejorative connotations' as wikipedia delightfully puts it.
slurgfest 14y ago
AppSumo seems like a pretty incestuous (or maybe better 'self-referential' or 'recursive') business, meaning: here is a startup which is totally oriented toward taking commission on sales of other people's startup services oriented to customers who want to make startups. By that measure, Advocare is also 'crushing it.'
tbrooks 14y ago
Is it possible that AppSumo just shifted their customer focus from the HN/startup type to more of a general entry-level audience? If that's the case, then the products they sell might not be so scammy... maybe they actually help real people solve real problems.
willhsiung 14y ago
Interesting that I once purchase $50 of AppSumo credit for $25 and ended up using most of it to purchase a 3-year Hacker Monthly subscription as most of the stuff on sale didn't appeal to me!
thucydides 14y ago
I usually stay on topic while on HN, but I have to say that the phrase "crushing it" is extremely annoying, and I wish people would stop saying it.
- lrobb 14y ago
  Crushing it totally jumped the shark
npguy 14y ago
It is 2012, and i am surprised these "marketplaces" still exist in the same format, instead of a thoughts.username.com, books. username.com, tutorials.username.com etc, and a totally unique discovery algorithm powered by past analytics (a google scale algo version of stumbleupon). Device lock-ins do not help either. just adds to the we have a marketplace hence users give us x percentage model.twitter, for example shd have been a protocol and not a private firm.

83 points by trg2 14y ago

This is great, thanks for the breakdown. Never dealt with Noah or the AppSumo guys but I get all their emails. Really nice to know there are guys behind it all and they're being conscientious with what they are sending out.

BallinBige 14y ago

Nice backlink to PayPal.com :)

unreal37 14y ago

Very interesting review. I also get the AppSumo email (although rarely read them any more), but good to see people are seeing much success with it.

nathanbarry 14y ago

I've heard that AppSumo's percentage is as high as 75-80%. Is what you got for your product?

trg2 14y ago

Not sure if I'm allowed to talk about commission percentages, so I will refrain. However, I can reiterate that the commission rate is extremely high, but has proven to be well worth it.

arkitaip 14y ago
Why shouldn't you be allowed?

stevencorona 14y ago

I read the article and now all I want to know is what % AppSumo takes. Super high like.. 90%?

manuelflara 14y ago
I think Groupon takes 50% and it's mostly actual physical products (like a meal at a restaurant), so I wouldn't be surprised if AppSumo takes something like 70%.
tbrooks 14y ago
It's no secret - 50-75%

rjsamson 14y ago

I actually picked up a few great deals from AppSumo right around the time they launched, but I feel like the quality content / products offered through there has gone down significantly over time - this is not a knock on the OP's course, I'm sure its quite good, its just that AppSumo used to have great stuff - I used to look forward seeing what they had each week - and now when I get their emails its kind of 'meh'. Or am I the only one who feels this way?

manuelflara 14y ago
I feel the same way. I used to look forward to discounted web apps. Through AppSumo I actually got to know one of my favorite ones that I use every day, all day: Freckle. I also found out about other discounts to web apps I had considered subscribing to but I didn't have a reason to do it now. Well, a time based huge discount is a good reason! Now it seems it's mostly the same online courses all the time. Copywriting, launch your business, etc.
taskstrike 14y ago
Feel the same way, now it's a site for trashy info products instead of actual useful software on sale. Probably the margin is higher selling to people who want to know "the easy way" of starting a startup.
run4yourlives 14y ago
This is the first time I've ever visited AppSumo, and my first impression is that it seems to be a collection of - overpriced - get rich quick schemes and apps of a dubious value. A shame because the basic concept seems to be a great idea.
OzzyB 14y ago
So if AppSumo does take a hefty commission in the 50%+ 75% range (as mentioned in other comments here), that would pretty much explain the decline in quality of goods offered. I personally wouldn't mind selling my (imaginary) e-course/book and only get 25% of proceeds -- for other, more tangible things, not so much. Not knocking the story though, interesting stuff.

Zaheer 14y ago

I really wish AppSumo would change their homepage. Apart from the tag line (and reading the article), I had no clear idea what AppSumo did.

hcarvalhoalves 14y ago
That's exactly the point, so you just click "Login with Facebook".
- untog 14y ago
  Right, but... I'm not going to do that unless I know what I'm clicking.
  - larholm 14y ago
    I feel the same. I got more information about AppSumo from their Google search excerpt than from their website.
- TillE 14y ago
  That seems like the sort of practice which is fine for normal users, but terrible when your market is developers. Facebook apps in particular have a bad history of sticking crap in your profile and spamming your friends. I don't mind logging in with Google OpenID because I know it just gives you my name and email address, and that's it.

jasonwilk 14y ago

Not surprised to see Noah being a customer service boss. He is a tireless entrepreneur and a great guy.

jusben1369 14y ago

The good news is if they're taking a split of the revenue with you then at least when they say "Let's lower the price!" they also have skin in the game. 50 - 70% may seem like a lot. If you really only think you'll do a one time sale and not repeat sales then it might be too high. However, I assume that if you have a good service or offering that you'll get future repeat sales? So it's a marketing expense to capture a customer and the more confident you feel around the "lifetime value" of a customer the more you might be ok with such a big up front or initial revenue share cost.

astrojams 14y ago

Excellent well crafted title for Hacker News. This is exactly the sort of content that does well here and hopefully will help you sell more passes to your courses.

deleted 14y ago

[deleted]

salman89 14y ago

Considering a $50 discount and a guess of 70% for AppSumo, OP paid an effective $120 CPA. In return, did OP gain lifetime value from bought actions? Did he increase exposure for his book so that more people will buy at full price? Will he have repeat customers? Is this a positive ROI move? I think that is a better metric to measure this type of _marketing_, not "we sold x copies in y days!!". I understand that there is no variable cost, but by offering a permanent "discount", OP may have permanently devalued his product. If that steep of a cut was viable, then author might have had a bad price point to begin with. In general, the same thing must be considered for products with little to no variable costs. I'm not sure what the optimal solution is, but I would think that one would want to sell even at $0.01 - because a sale on a product with no variable cost has to be better than no sale at all...

patio11 14y ago
I would think that one would want to sell even at $0.01 You definitely don't want to do that. You're going to be overwhelmed with support requests (for an e-book, even!) from the least competent potential users imaginable. Moreover, you're going to blunt the reason for writing the book in the first place, because the people best positioned to get value from the book will not do so because it is too cheap to be taken seriously as business advice.
- ovi256 14y ago
  You are right for $0.01 cost, but I wonder if that changes for $0.01 profit. What if your COCA (cost of customer acquisition) eats all but $0.01 of the revenue ? You are bringing in positive marginal revenue, and you don't have the downside you mentioned. Of course, you have others, such as this cost structure means you're making someone else rich, not yourself, and it's a very fragile situation, you can't absorb COCA increases.
liquidcool 14y ago
Yeah, I came to write something similar. With a 34% discount, then a >50% commission he's selling for 1/3 of his usual price, and like Patrick says, this is further reduced by support costs from, well, cheap customers. It is like Groupon, but most Groupon successes make money from full priced add-ons, and I don't see that here. A $100+ CPA is also a great way to think about it. I think you could get some decent affiliate traffic (which is what this is, really) for half that. Side note: I visited App Sumo's site as a non member and there's nothing to tell me what the site is, or why I should sign up, other than it's a "store for entrepreneurs." Presumably they expect you to Google what it is, or perhaps more likely, arrive having already been explained elsewhere what it is and decided you want in. But it seems strange they wouldn't want more control over the message. I'm assuming this works for them, but I'm not sure why.

bluetshirt 14y ago

Gypsy ninjas? Gypsy is a highly offensive ethnic slur practically everywhere in the world except America.

cobrausn 14y ago
http://en.wikipedia.org/wiki/Gypsy_(term)#Gypsy http://en.wikipedia.org/wiki/Gypsy_(term)#Gypsy The word 'slur' is not mentioned once on that page. At best, its use as an offensive slur is context sensitive (at least according to http://en.wikipedia.org/wiki/List_of_ethnic_slurs http://en.wikipedia.org/wiki/List_of_ethnic_slurs).
- mattmanser 14y ago
  It does actually mention it's an insult a lot of the time half way down the page. You wouldn't use it as an ethnic slur like 'roast beef', people accuse others of being a gypsy or a pikey. It is 'considered to carry pejorative connotations' as wikipedia delightfully puts it.

slurgfest 14y ago

AppSumo seems like a pretty incestuous (or maybe better 'self-referential' or 'recursive') business, meaning: here is a startup which is totally oriented toward taking commission on sales of other people's startup services oriented to customers who want to make startups. By that measure, Advocare is also 'crushing it.'

tbrooks 14y ago

Is it possible that AppSumo just shifted their customer focus from the HN/startup type to more of a general entry-level audience? If that's the case, then the products they sell might not be so scammy... maybe they actually help real people solve real problems.

willhsiung 14y ago

Interesting that I once purchase $50 of AppSumo credit for $25 and ended up using most of it to purchase a 3-year Hacker Monthly subscription as most of the stuff on sale didn't appeal to me!

thucydides 14y ago

I usually stay on topic while on HN, but I have to say that the phrase "crushing it" is extremely annoying, and I wish people would stop saying it.

lrobb 14y ago
Crushing it totally jumped the shark

npguy 14y ago

It is 2012, and i am surprised these "marketplaces" still exist in the same format, instead of a thoughts.username.com, books. username.com, tutorials.username.com etc, and a totally unique discovery algorithm powered by past analytics (a google scale algo version of stumbleupon). Device lock-ins do not help either. just adds to the we have a marketplace hence users give us x percentage model.twitter, for example shd have been a protocol and not a private firm.