7 ms·

Benefits of Selling Outside the Mac App Store

110 points by milen 12y ago

nathanbarry 12y ago
Really solid article. I love that it includes actual numbers. "Apple has taken $600,000 (USD) of that in fees. Ouch!" is much more concrete than just "30% of revenue."
- sosborn 12y ago
  > taken Well, there are providing a service in return for those fees as well as high-visibility amongst potential customers. Striking out on your own means a lot of work in getting people to your website.
  - eps 12y ago
    30% is an insane commission. Absolutely mind-boggingly brutal. The kind of commission that should guarantee that your product is featured on Apple's home page in large bold, possibly flashing, letters well above their own products. If it's not, then it's not "high-visibility" and 30% is just a blatant rip-off. # A message from your local software retailer who's doing really well by selling directly.
    - detaro 12y ago
      What kind of software do you make/sell?
    - JScarry 12y ago
      It’s not too bad considering the alternatives. Not all of my customers are able to download software so I still sell through catalogs. They get a 35-40% discount—which is more than Apple charges. Plus I need to press discs and print manuals. It would be nice if Apple would fix the search features on the Mac and iOS Apps stores so people can actually find my software.
      - godzillabrennus 12y ago
        Can you link is to what you sell?
      - mikeash 12y ago
        Comparing a digital download to physical distribution is nonsensical. The alternatives for downloaded software involve setting up your own online store and credit card processing, which costs on the order of $5/month and 3% of sales. Apple does not provide nearly enough more to justify $99/year and 30% of sales.
  - burntcaramel 12y ago
    Dan and other indie developers talk a lot about the importance of doing your own marketing, even if you are in the App Store. And they also underline how being listed in the App Store isn’t close to the results of proper marketing. http://dancounsell.com/articles/thoughts-on-increasing-app-revenue http://dancounsell.com/articles/thoughts-on-increasing-app-r... http://www.joecieplinski.com/blog/2014/12/22/building-a-showroom/ http://www.joecieplinski.com/blog/2014/12/22/building-a-show...
tomkinstinch 12y ago
Another point to add is that applications sold outside the App Store can avoid the sandboxing restrictions of the Store, and consequently contain functionality that would be not permitted by Apple on the Store (file access, deeper system access, etc.). That said, for my side project ( http://artfulmac.com http://artfulmac.com ) it is absolutely worth it to me as a solo developer to pay Apple their 30% to have them handle fulfillment (including system-integrated update notifications), payment processing (with currency conversion), tax form creation, and refunds. It's a trade of financial overhead for time. The App Store also conveys a sense of trust to consumers.
- milen 12y ago
  it is absolutely worth it to me as a solo developer to pay Apple their 30% to have them handle fulfillment I think one aspect that gets easily lost in the debate is the long-term impact of having your app on the MAS (exclusively or not). You need to consider the value of being able to provide trials (i.e., do not force potential customers to spend money upfront on software that might not fulfil their requirements), discounts for your long term repeat customers, the ability to communicate directly with them and resolve their problems. If you want to run a sustainable business, whether the MAS is a net positive becomes a question mark. I have not seen much supporting data to suggest that the MAS is a net positive if we compare exclusive direct vs exclusive MAS over a long period of time. Anecdotally, from the data I have on hand (conversations with customers and friends), almost no one discovered their Mac apps from the MAS (there's some bias in my sample, of course). If they needed the software, they would have bought it - whether it's outside or not doesn't matter. If you need a tool for your job (the type of software I'm interesting in making), you're not going pass on it just cause you have to enter your credit card. For other types of software, the more disposable ones, convenience plays a much bigger role. And most importantly of all, it will all depend on the particular type of software that you're selling. In my experience, the MAS works great for type of software that's mostly consumable - cheap, disposable, no long term plan to keep it updated. For other types, where you plan to run a sustainable business over many years - I'm not convinced. While you'll probably do less units selling directly, you'll be getting a significantly higher proportion of the sale price. It's important to consider all aspects, not just raw revenue over a short period of time and make a decision from there - for some apps, the MAS would be the right way, for others - not so much. Now, deciding which way to go is a much, much harder question and I'm afraid there's no easy way to come up with a definitive answer.
pavlov 12y ago
The Mac App Store is a ghetto. It's completely neglected by Apple. I'm not sure who they imagine to be the target audience -- maybe it works for mobile-style game experiences, I wouldn't know, but it's certainly no good for professional apps. Important issues with sandboxing were never resolved. Meanwhile existing APIs keep being moved to the restricted list, so as a developer you can't even count on your product being able to stay on the Mac App Store.
- sleepyhead 12y ago
  A ghetto huh? Many apps I bought are on the App Store (many can be bought outside the app store too so I bought them directly though). I'm not sure how well MAS is doing but a ghetto it is not. Target market? Well lets try the average user who is much better off with buying from Apple who already has their credit card than going through some little website and their pain in the ass credit card form, registration and what not.
  - pavlov 12y ago
    So the Mac App Store is highly convenient, yet you always choose to buy outside the App Store when possible? That's not the greatest endorsement ever.
    - sleepyhead 12y ago
      That's my preference. You didn't understand what the target market is. I tried to explain it to you but obviously didn't understand it.
      - pavlov 12y ago
        There's no such target market as "the average user". That's usually a condescending fiction used by techies. The line of thought is something like: "Of course I do interesting stuff on my computer, but the average person doesn't. All they need is X." Importantly, X is never defined by asking actual users, but is simply a distillation of prejudice about the needs of "the common people".
programminggeek 12y ago
I tend to think of selling to an app store as basically selling through Wal-Mart or Best Buy vs selling direct. Yes, selling direct is higher margin, but it's also got a different set of challenges. For example, you have to acquire customers on your own. Probably the best way to look at it would be to treat the Mac App Store as a secondary channel. If it was a secondary sales channel, then it's additional revenue and new customers which is a nice to have. You are probably best off creating your own customer list and selling directly to customers over time away from the Mac App store. Or, you avoid it alltogether and figure out how to sell direct. The only downside there is you have to do your own advertising and use something like Gumroad or FastSpring or some homegrown Stripe solution for delivery and such. Nothing is perfect and there are tradeoffs to both approaches.
- mikeash 12y ago
  The comparison to Wal-Mart seems apt. They'll sell your product, but they'll abuse the hell out of you and force you to compromise the quality of the product, possibly beyond what you're willing to accept: http://www.fastcompany.com/54763/man-who-said-no-wal-mart http://www.fastcompany.com/54763/man-who-said-no-wal-mart
lnanek2 12y ago
I think it is misleading to have a big picture of an iPhone at the top, and talk extensively about selling outside the app store, when that isn't a realistic option for iOS smartphone developers. You are forced to use the App Store for iPhone since the number of jail broken devices that can install other apps is too low. The author must be talking about Mac laptop/desktop apps.
jhack 12y ago
For developers who sell the same app on both the Mac App Store and outside of it, do you keep the same price for both or do you encourage users to buy directly from you with variable pricing? Thirty percent is a significant chunk and I'm wondering if anyone's tried to pass some of the savings (so to speak) when selling directly.
- rbritton 12y ago
  I'm not familiar with the rule number offhand, but I'm reasonably certain they require you to have the same list price in both places.
  - nicky0 12y ago
    Actually there is no such rule.
    - rbritton 12y ago
      You are correct. I was thinking of this rule that has since been removed: 11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.
Immortalin 12y ago
Hi, I am creating an appstore for indie developers, it will go live before the end of January. URL's immortalin.com , email me at <my username> at hotmail.com if you are interested.
gulpahum 12y ago
As a Mac user, I only download applications from the wild-wild-web if the developer is a big player, like Google, Mozilla or Adobe (except I refuse to install Flash). I think it is just too big risk to download from a small business which I don't know and run their application outside the sandbox. So, I'd recommend that you have some version in MAS, otherwise you may lose customers.
MichaelCrawford 12y ago
I wouldn't dream of selling a Mac App in the App Store. The only reason I would sell an iOS App in the App Store is that users would otherwise need to jailbreak their phones. If someone recommends an app store product, they'll link to apple's website. If I sell products from my own site, and someone recommends it then they'll link to my site. In general, inbound links are worth a lot more than individual product sales.
eveningcoffee 12y ago
Not only are software developers starting to realize that middleman Apple only grabs huge chunk of revenue without providing much value. I talked with local audio gear seller and he told me that we will start to see less audio products compatible with Apple as they just want to grab 20% of revenue.
chj 12y ago
"Selling outside of AppStore" is not necessarily meaning that you should not release the app on App Store. It's still a good channel and even the only channel. The challenge is to find a way to get paid outside App Store.

110 points by milen 12y ago

Really solid article. I love that it includes actual numbers. "Apple has taken $600,000 (USD) of that in fees. Ouch!" is much more concrete than just "30% of revenue."

sosborn 12y ago
> taken Well, there are providing a service in return for those fees as well as high-visibility amongst potential customers. Striking out on your own means a lot of work in getting people to your website.
- eps 12y ago
  30% is an insane commission. Absolutely mind-boggingly brutal. The kind of commission that should guarantee that your product is featured on Apple's home page in large bold, possibly flashing, letters well above their own products. If it's not, then it's not "high-visibility" and 30% is just a blatant rip-off. # A message from your local software retailer who's doing really well by selling directly.
  - detaro 12y ago
    What kind of software do you make/sell?
  - JScarry 12y ago
    It’s not too bad considering the alternatives. Not all of my customers are able to download software so I still sell through catalogs. They get a 35-40% discount—which is more than Apple charges. Plus I need to press discs and print manuals. It would be nice if Apple would fix the search features on the Mac and iOS Apps stores so people can actually find my software.
    - godzillabrennus 12y ago
      Can you link is to what you sell?
    - mikeash 12y ago
      Comparing a digital download to physical distribution is nonsensical. The alternatives for downloaded software involve setting up your own online store and credit card processing, which costs on the order of $5/month and 3% of sales. Apple does not provide nearly enough more to justify $99/year and 30% of sales.
- burntcaramel 12y ago
  Dan and other indie developers talk a lot about the importance of doing your own marketing, even if you are in the App Store. And they also underline how being listed in the App Store isn’t close to the results of proper marketing. http://dancounsell.com/articles/thoughts-on-increasing-app-revenue http://dancounsell.com/articles/thoughts-on-increasing-app-r... http://www.joecieplinski.com/blog/2014/12/22/building-a-showroom/ http://www.joecieplinski.com/blog/2014/12/22/building-a-show...

tomkinstinch 12y ago

Another point to add is that applications sold outside the App Store can avoid the sandboxing restrictions of the Store, and consequently contain functionality that would be not permitted by Apple on the Store (file access, deeper system access, etc.). That said, for my side project ( http://artfulmac.com http://artfulmac.com ) it is absolutely worth it to me as a solo developer to pay Apple their 30% to have them handle fulfillment (including system-integrated update notifications), payment processing (with currency conversion), tax form creation, and refunds. It's a trade of financial overhead for time. The App Store also conveys a sense of trust to consumers.

milen 12y ago
it is absolutely worth it to me as a solo developer to pay Apple their 30% to have them handle fulfillment I think one aspect that gets easily lost in the debate is the long-term impact of having your app on the MAS (exclusively or not). You need to consider the value of being able to provide trials (i.e., do not force potential customers to spend money upfront on software that might not fulfil their requirements), discounts for your long term repeat customers, the ability to communicate directly with them and resolve their problems. If you want to run a sustainable business, whether the MAS is a net positive becomes a question mark. I have not seen much supporting data to suggest that the MAS is a net positive if we compare exclusive direct vs exclusive MAS over a long period of time. Anecdotally, from the data I have on hand (conversations with customers and friends), almost no one discovered their Mac apps from the MAS (there's some bias in my sample, of course). If they needed the software, they would have bought it - whether it's outside or not doesn't matter. If you need a tool for your job (the type of software I'm interesting in making), you're not going pass on it just cause you have to enter your credit card. For other types of software, the more disposable ones, convenience plays a much bigger role. And most importantly of all, it will all depend on the particular type of software that you're selling. In my experience, the MAS works great for type of software that's mostly consumable - cheap, disposable, no long term plan to keep it updated. For other types, where you plan to run a sustainable business over many years - I'm not convinced. While you'll probably do less units selling directly, you'll be getting a significantly higher proportion of the sale price. It's important to consider all aspects, not just raw revenue over a short period of time and make a decision from there - for some apps, the MAS would be the right way, for others - not so much. Now, deciding which way to go is a much, much harder question and I'm afraid there's no easy way to come up with a definitive answer.

pavlov 12y ago

The Mac App Store is a ghetto. It's completely neglected by Apple. I'm not sure who they imagine to be the target audience -- maybe it works for mobile-style game experiences, I wouldn't know, but it's certainly no good for professional apps. Important issues with sandboxing were never resolved. Meanwhile existing APIs keep being moved to the restricted list, so as a developer you can't even count on your product being able to stay on the Mac App Store.

sleepyhead 12y ago
A ghetto huh? Many apps I bought are on the App Store (many can be bought outside the app store too so I bought them directly though). I'm not sure how well MAS is doing but a ghetto it is not. Target market? Well lets try the average user who is much better off with buying from Apple who already has their credit card than going through some little website and their pain in the ass credit card form, registration and what not.
- pavlov 12y ago
  So the Mac App Store is highly convenient, yet you always choose to buy outside the App Store when possible? That's not the greatest endorsement ever.
  - sleepyhead 12y ago
    That's my preference. You didn't understand what the target market is. I tried to explain it to you but obviously didn't understand it.
    - pavlov 12y ago
      There's no such target market as "the average user". That's usually a condescending fiction used by techies. The line of thought is something like: "Of course I do interesting stuff on my computer, but the average person doesn't. All they need is X." Importantly, X is never defined by asking actual users, but is simply a distillation of prejudice about the needs of "the common people".

programminggeek 12y ago

I tend to think of selling to an app store as basically selling through Wal-Mart or Best Buy vs selling direct. Yes, selling direct is higher margin, but it's also got a different set of challenges. For example, you have to acquire customers on your own. Probably the best way to look at it would be to treat the Mac App Store as a secondary channel. If it was a secondary sales channel, then it's additional revenue and new customers which is a nice to have. You are probably best off creating your own customer list and selling directly to customers over time away from the Mac App store. Or, you avoid it alltogether and figure out how to sell direct. The only downside there is you have to do your own advertising and use something like Gumroad or FastSpring or some homegrown Stripe solution for delivery and such. Nothing is perfect and there are tradeoffs to both approaches.

mikeash 12y ago
The comparison to Wal-Mart seems apt. They'll sell your product, but they'll abuse the hell out of you and force you to compromise the quality of the product, possibly beyond what you're willing to accept: http://www.fastcompany.com/54763/man-who-said-no-wal-mart http://www.fastcompany.com/54763/man-who-said-no-wal-mart

lnanek2 12y ago

I think it is misleading to have a big picture of an iPhone at the top, and talk extensively about selling outside the app store, when that isn't a realistic option for iOS smartphone developers. You are forced to use the App Store for iPhone since the number of jail broken devices that can install other apps is too low. The author must be talking about Mac laptop/desktop apps.

jhack 12y ago

For developers who sell the same app on both the Mac App Store and outside of it, do you keep the same price for both or do you encourage users to buy directly from you with variable pricing? Thirty percent is a significant chunk and I'm wondering if anyone's tried to pass some of the savings (so to speak) when selling directly.

rbritton 12y ago
I'm not familiar with the rule number offhand, but I'm reasonably certain they require you to have the same list price in both places.
- nicky0 12y ago
  Actually there is no such rule.
  - rbritton 12y ago
    You are correct. I was thinking of this rule that has since been removed: 11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

Immortalin 12y ago

Hi, I am creating an appstore for indie developers, it will go live before the end of January. URL's immortalin.com , email me at <my username> at hotmail.com if you are interested.

gulpahum 12y ago

As a Mac user, I only download applications from the wild-wild-web if the developer is a big player, like Google, Mozilla or Adobe (except I refuse to install Flash). I think it is just too big risk to download from a small business which I don't know and run their application outside the sandbox. So, I'd recommend that you have some version in MAS, otherwise you may lose customers.

MichaelCrawford 12y ago

I wouldn't dream of selling a Mac App in the App Store. The only reason I would sell an iOS App in the App Store is that users would otherwise need to jailbreak their phones. If someone recommends an app store product, they'll link to apple's website. If I sell products from my own site, and someone recommends it then they'll link to my site. In general, inbound links are worth a lot more than individual product sales.

eveningcoffee 12y ago

Not only are software developers starting to realize that middleman Apple only grabs huge chunk of revenue without providing much value. I talked with local audio gear seller and he told me that we will start to see less audio products compatible with Apple as they just want to grab 20% of revenue.

chj 12y ago

"Selling outside of AppStore" is not necessarily meaning that you should not release the app on App Store. It's still a good channel and even the only channel. The challenge is to find a way to get paid outside App Store.