
Apple's 30% - milen
http://reinventedsoftware.com/blog/2015/08/10/30percent/
======
replicatorblog
FWIW, I used to work in hardware and sold products to Walmart, Target, CVS,
Kroger, the Apple Store and had stuff on the shelves of ~20,000 retail
locations in the US.

30% is a bargain. In physical retail we'd pay 50% pretty consistently. We were
also at the mercy of the retailer to send things back to us if they didn't
sell, without paying. So they would buy 20,000 units, sell 5,000, and a few
months later send us back the remainder and call it even.

If we wanted promotion in their stores, circulars, or websites we had to pay
for the privilege.

Considering Apple puts you in the pocket of hundreds of millions of people,
puts you a password or fingerprint away from their credit card, and provides
the opportunity for massive exposure in their store, it feels like a super
fair deal.

I'm more troubled by the fact that they essentially have driven the price of
discrete software to zero, but fortunately there are more and more ways to
monetize via SaaS, IAP, Hardware, etc.

~~~
mikeash
In retail, you pay 50% because that's something like what it actually costs to
sell stuff to people in a physical store.

The cost of selling software is almost zero. Unlike retail's cut of your
selling price, Apple's cut is completely arbitrary and rather unjustified.

If you sell software directly to users, the cost can be something like 3%,
depending on which payment processor you want to use.

What additional service does Apple provide for that additional 27% cut? The
buying experience is easier, but this doesn't seem to translate into
additional sales. You mention "massive exposure," but there's pretty much
universal agreement among developers in the Apple world that the App Store's
"marketing" bump is pretty much zero unless you're extremely lucky and get
featured.

But hey, if it's worth it, then you should be able to let developers choose
and they'll still go for it. On iOS, there is no choice. If you want to sell,
it's either Apple's 30% or nothing. On the Mac, there is a choice (for now)
and the trend now seems to be to choose not to use the App Store there.

~~~
rgbrgb
It's definitely not 0 to build, maintain, and curate the App Store. Not even
"almost zero".

>> The buying experience is easier, but this doesn't seem to translate into
additional sales.

I'd like to see a source for this assertion. In my anecdotal experience of
selling software on the App Store and not on the App Store, it's 10x harder to
do it yourself (so for me worth the 30%). Reducing friction increases
purchases -- that's why Apple, Amazon, and even Stripe now store consumer
credit cards. That's not even taking into account how valuable being featured
is.

Maybe 30% is not the right number, and I totally agree that the OS should not
insist that your apps be procured through a blessed channel, but there's a
huge difference in effort between setting up your own store using Stripe and
selling on the App Store.

~~~
mikeash
My source for the assertion is purely personal, from knowing a lot of
developers who sell both in out of the store. Pretty much universally, if a
product is available both through the Mac App Store and directly, the sales
through the two channels are comparable. No, I have no numbers to back it up,
just talking with people who actually do it.

Having done both, in terms of effort I'd much rather set up my own store.

Selling on the App Store is a horrible mess. Code signing, provisioning,
verification, review, they do not make it easy at all. And good luck if you
want to actually test the build you submit to the store.

Any competent programmer should be able to set up a web store without a great
deal of pain.

I think there's a big disconnect here in terms of how different people
approach and prioritize things. You're pointing to the submission process as
an advantage. A sibling poster actually pointed to app review as an advantage.
To me, they are both horrible disadvantages that make the App Store a terrible
place for developers.

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hartator
[http://webcache.googleusercontent.com/search?q=cache:tFnDscE...](http://webcache.googleusercontent.com/search?q=cache:tFnDscEEiwsJ:reinventedsoftware.com/blog/2015/08/10/30percent/+&cd=1&hl=en&ct=clnk&gl=us)

~~~
t0mbstone
Thanks!

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jasode
_> Feeder is over 10 years old now, long predating the Mac App Store, [...] ,
and while they should profit, should they really be taking so much that it
risks putting independent developers like me out of business?_

I'm having trouble following the logic. How can a _new_ distribution channel
for potential customers that didn't exist until 2011 bankrupt you?

If Feeder is 10 years old, what's significant about 2011-2015 of the Mac App
Store existence that causes financial insolvency?

 _For a niche app like Feeder, which typically only manages to cover the cost
of supporting and maintaining it, doesn’t need any Mac App Store-only features
like iCloud,..., it hardly makes sense for me to sell it there from a
financial perspective… and yet if I don’t, many people might not even know it
exists._

How did people find out Feeder existed before 2011? Did Mac App Store remove
that option of reaching the public?

~~~
asadotzler
App stores indeed have dramatically obscured other distribution channels.
Pretending that's not the case isn't helping anyone.

~~~
jasode
_> dramatically obscured_

We're not talking about the iOS App Store. The authors complaint is about the
_Mac App Store_. It's a software store that Mac desktop/laptop users don't
even bother to click on.[1]

I'm still having trouble connecting the dots here. How exactly has a
distribution channel that has gained very little traction over the last 4
years "dramatically obscured" other distribution options for a 10-year old
app? Has there been an explosion of demand for sandboxed apps? It doesn't look
like it.

[1] _" An alarming number of customers who already have Macs have absolutely
no idea that the Mac App Store exists, even though the blue icon sits in many
an unchanged Dock."_

[http://www.imore.com/nsfw-apples-benign-neglect-mac-app-
stor...](http://www.imore.com/nsfw-apples-benign-neglect-mac-app-store)

------
Retric
Last I checked the App store was not a significant revenue source for Apple.
My guess is the review process is expensive and most apps are a net negative
from Apples perspective.

One way around this would be if apple reserved a portion of sales, but with
the number of 'free' apps out there this would probably not work. And for near
breakeven apps it would probably result in similar numbers. (EX: 100% of the
first 10k, 10% after that.)

~~~
heimatau
I'm not sure when the last time you checked but $10 billion [1] in revenue is
significant. That's only 2013.

[1] [https://www.apple.com/pr/library/2014/01/07App-Store-
Sales-T...](https://www.apple.com/pr/library/2014/01/07App-Store-Sales-
Top-10-Billion-in-2013.html)

~~~
plorkyeran
That's the iOS App Store, not the Mac App Store. The app store on iOS is
significantly different in that you can't choose to just sell apps directly.

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exelius
Look on the bright side; distributors like Apple used to take closer to 50%.
The trend in the industry is towards shrinking payments, and when Apple
started doing this, 30% was considered a small cut.

But why would Apple cut their rev share take when they have no reason to do
so? It's not like there's competitive pressure, and if app developers want to
get more revenue, they can raise prices.

~~~
mikeash
On the bright side, distributors like Apple used to take 50%. On the dim side,
distributors like Apple used to not be the only option, and that 50% was at
least vaguely justified because they were doing things like staffing call
centers for taking orders, and shipping physical media to customers.

~~~
7Z7
The Mac App Store is still not the only option. Buy your software wherever you
like.

~~~
mikeash
Yes, which is why it seems to be falling out of favor among many third party
developers. Over on iOS, it is the only option, and I'm pessimistic as to how
long the optionality will last on the Mac end.

------
scholia
There was another Mac App Store article on here yesterday:
[https://news.ycombinator.com/item?id=10056593](https://news.ycombinator.com/item?id=10056593)

The Mac App Store Still Needs Paid Upgrades
[http://dancounsell.com/articles/the-mac-app-store-still-
need...](http://dancounsell.com/articles/the-mac-app-store-still-needs-paid-
upgrades)

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Kenji
Apple take 30% because they can take 30%. You are paying it. You haven't
switched to developing for another platform like Android or PC. They can do it
because you, along with all the other app developers, are masochistic enough
to put up with this walled garden. Somehow I cannot muster up sympathy.

~~~
s73v3r
That doesn't make any sense, considering Android also has the same 30%, but
makes less.

~~~
Kenji
You are right. I stand corrected. Still, he is free to chose other ways of
distribution that cost him less.

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pbreit
30% is pretty much the going rate for digital goods (marginal cost $0), even
without the distribution might of the Apple Stores.

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chasing
I feel the author's pain and 30% does seem ridiculously high given the service
Apple provides. And given that it's these same developers that make Apple's
hardware as popular as it is by providing awesome apps and services. And I do
not like the monopolistic nature of the App Store -- that it's integrated into
Mac OS X in a way that other software sales platforms could never compete
with.

But.

If 30% is too expensive -- if the added benefits of promotion through the App
Store and other services don't make up for the loss -- why is it even a
question? Don't sell through the Mac App Store. The presumption is that it's
more profitable not to. So don't.

~~~
newobj
"given the service apple provides"

\- put your app or iap 1 click away from an already loaded credit card; seems
highly valuable to me.

~~~
chasing
Then the App Store is for you!

It may, nevertheless, be too expensive for many people. The article author,
for example.

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kelukelugames
Is there a mirror? Site looks down.

~~~
ikeboy
[https://web.archive.org/web/20150811061243/http://reinvented...](https://web.archive.org/web/20150811061243/http://reinventedsoftware.com/blog/2015/08/10/30percent/)

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bosdev
The site is down for me. In the future, please consider making your blog a
static site. It is generally more reliable, cheaper, and more tolerant of
spikes of traffic like this.

