

Ask HN: I don't understand why app stores charge 30% of app sales - santoshmaharshi

30% of app sales is a huge comission, charging even more than real estate agents :). Is this percentage justified, what are your thoughts and has some one challenged these rates ?
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saurik
The Apple App Store (which has been disclosed in earnings calls multiple years
as only just barely in the black) handles your sales tax compliance for you
(though the Google Play Store does not...), deals with refunds and complaints,
isolates you from chargebacks (every customer that complains to their bank
typically costs you an enforced $10-$20 per complaint in addition to the
money), is handling your server distribution (fast bandwidth to send updates
adds up for large applications that are updated often), provides licensing
infrastructure (you don't need to build some kind of "enter your code" DRM
system with a bunch of servers that have to be online: you just give your app
to the market and wash your hands of the problem; this is also often much
easier when a user trades his device in due to a hardware issue: that's the
market's problem), and is usually subsidizing a large population of free
software that also accumulates complaints and infrastructure costs (and it is
that large catalog of free stuff that often is causing your customers to have
this experience installed anyway)... I run an app market, we charge 30% and
end up with a fraction of that; I've had people who were additionally doing
their own payment processing (we run an open ecosystem, and these people were
not losing the distribution benefits of my market) stop and transfer all their
existing license records to me, because I was simply providing them a more
solid and convenient payment experience: they got to concentrate on building
their app, and the price difference between their true costs of running this
and what I was better spent improving their product and marketing efforts.
Comparing to a real estate agent is really off, by the way, because the costs
of doing transactions in hundreds of thousands of dollars is fundamentally
different than doing transactions on a $1. The "good rates" (so throwing
companies like Stripe out the door, which would cost $0.33 upfront) are still
going to run you 10% the transaction cost, and the chargeback on a $1000
purchase is still going to cost the same $10-$20.

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santoshmaharshi
Many thanks Saurik. Makes sense.

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argonaut
Originally Apply started out with 30%. Perhaps they thought _at the time_
(remember, there were no apps then) that going higher would dissuade
developers. Then other app stores (Google Play, etc.) entered and charged 30%.
Now, even with entrenched positions, raising the percentage would probably be
very negative PR / developer relations. Dropping the percentage doesn't really
make sense because you'd just be entering a price war (competitor immediately
drops percentage, you both lose).

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saurik
Actually, they were pushing _lower_ , and is designed to compare favorably to
retail distribution (which has so many middlemen and infrastructure related
costs as to end up with very large and often unpredictable costs of business).

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Lorenz-Kraft
I think 30% is a fair price if you think of all the stuff that is provided.

In my view thats mostly: 1: a payment gateway 2: Server structure

I don't know HOW you could afford a standard like this when you sell your app
for 1 Dollar ...

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crystalmace
Because they can. They have a large userbase; being the only legitimate way
that users can get apps for their iDevice gives them a monopoly on a huge
market

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mooism2
Why 30%? Why not 35%, 40%, 50%?

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petervandijck
It's high, but seeing that they handle billing and that they own and created
the platform, I think it's fair enough.

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mooism2
The story goes that they only get 70% of the retail price for gift tokens.

~~~
coralreef
Interesting, never thought about that. Cost of doing business I guess, keeping
users on your platform by making it another purchase option available.

