On: Apple Announces App Store Small Business Program

[jclardy]

You are almost correct - it goes by the prior years income, but based on the 30% cut. Meaning if you sold 1m in products you would still be in the 15% bracket next year. You would need ~1.43m in sales to be "Moved up" the next year (It gets more complicated with subscription revenue already having a 30/15 cut depending on the user's subscription length.) It works out to this (Using 1m in sales as the cutoff to simplify the numbers):

Year 1: 999k --[-15%]--> 849k (This year doesn't trip the "limit"

Year 2: 1000k --[-15%]-->850k (Limit is tripped, next year is 30%)

Year 3: 999k --[-30%]-->699k (Fell below the limit, next year is 15% again)

Basically if you are close to the limit at the end of the year, you should immediately stop all advertising/marketing spend to ensure you don't go over the peak :)

I'm not really sure why they did it this way as it really screws over people that are just at the 1m/yr mark, vs a progressive system that would "just work."

[ksec → jclardy]

Thank You for the explanation. This is increasingly reading more like a dick move for PR than anything else.

Why cant it just be simple where your First $1M will be 15% bracket regardless of total sales.

[Twisell → ksec]

Or maybe this is just PR with a clear but maybe oversimplified statement...

Yet they have 2 full year to see how it goes and work around all the edge case. I bet nobody except professional haters will complain if they soften the rules in 18 months.

[emdowling → jclardy]

Giving Apple the benefit of the doubt here (which is a significant caveat), I'd like to think that they modelled out various scenarios and looked at growth rates to know that the year 3 scenario you envisage rarely occurs.

Or, they could've just picked $1 million because it's a nice round number and looks good in a press release.

[toyg → emdowling]

The latter explanation is the winner. They needed an arbitrary threshold and went for an easy-sounding one.