Benefits of Selling Outside the Mac App Store

http://dancounsell.com/articles/the-benefits-of-selling-software-outside-the-mac-app-store

by milen • 12 years ago

110 40 12 years ago

dancounsell.com

nathanbarry• 12 years 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• 12 years 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• 12 years 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.

burntcaramel• 12 years 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-r... http://www.joecieplinski.com/blog/2014/12/22/building-a-show...

tomkinstinch• 12 years 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 ) 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.

milen3• 12 years 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.

cageface• 12 years ago

This is a critical flaw in Apple's handling of both app stores, IMO. The rules of the app store incentivize simple, one-off apps with minimal functionality. As a distribution mechanism it offers a lot of benefits for users but unless they take some relatively easy steps to make it a better place for serious developers those benefits will be moot.

Their handling of iOS and Mac apps seems indifferent at best and downright incompetent at best. In any case I've left their proprietary ghetto and gone back to coding for the web.

TillE• 12 years ago

Taxes are a huge deal for solo developers and tiny companies. Selling direct can be extremely complicated, especially if you want to properly follow every possible sales tax law which applies to you.

Putting your software on the App Store or Steam or similar (notably not Google Play[1]) means you're just getting paid royalties, not selling a product to individual customers.

[1] https://play.google.com/intl/ALL_us/about/developer-distribu...

"You are the merchant of record for Products you sell through the Store." I'd bet that 95% of smaller Android app developers have not hired an accountant to review every last detail, and therefore have failed to pay every cent of tax they owe. Unless you're very serious about starting a real business, it's a total nightmare.

milen3• 12 years ago

Indeed you are correct and that's why it's generally simpler to use a service that acts as a reseller - i.e., they are the vendor of record. This means you shift all of the responsibility to them and you don't have to deal with it. Using the likes of PayPal / Stripe is not a good idea because you will be responsible for VAT compliance and with the newly introduced EU legislation, it can be a huge hassle - you need to deal with the MOSS at least. If you're selling software, I can recommend FastSpring - it's what the majority of Mac software houses use, it's highly customisable and they've been around for years.

Furthermore, if you're UK based and use a non-UK marketplace / reseller, then the revenue you receive from the reseller lies outside the scope of UK VAT and you don't have to do anything [1]

The reason why most EU developers on the App Stores don't deal with VAT is because the vendor of record is Apple Luxembourg, thus lies outside the scope. And that's precisely why Apple requires VAT invoices from Luxembourg-based developers.

[1] https://www.gov.uk/vat-how-to-work-out-your-place-of-supply-...

niels_olson• 12 years ago

Can artfulmac work with the screensaver too? Then I could quickly and passively get a sense of what I want on my wallpaper for an extended period of time.

rtpg• 12 years ago

That said, for my side project ( 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.

There's also the fact being on the App Store is a form of advertising. I think this is more obvious in Steam, which basically creates markets for games that had none before (usually because indie game developers are not necessarily good marketers). I know I've "browsed" the App store to look at things.

In these sales, it's not getting only 70% of revenue you would have otherwise, it's getting money you would not have gotten at all if you weren't present on the store.

pavlov5• 12 years 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.

sleepyhead2• 12 years 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.

pavlov5• 12 years 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.

milen3• 12 years ago

Speaking of sandboxing, Reeder 2 for Mac (one of the best RSS readers) was forced to remove the option to be set as the default RSS reader from within the app. This is because a function on Yosemite is longer allowed in sandboxed apps but still works fine on 10.9 [1]

While it's not the end of the world, it's just plain annoying having to remove such a common sense feature. The consequence of this means that if you were to distribute a web browser via the MAS, you will not be able to ask the user to set it as the default web browser. That's just a subpar experience.

My hypothesis for the added restriction is that it might be considered a security hole for an app to just set itself as a handler, for say, http links.

The correct way to have handled this particular situation was to introduce a new entitlement and define what content types an app might want to handle, which will get reviewed by the MAS review team. Unfortunately, the solution [2] is: "There is no solution; it can't be done anymore in the sandbox."

[1] http://stackoverflow.com/questions/26241689/lssetdefaultrole...

[2] https://devforums.apple.com/message/1059008#1059008

pavlov5• 12 years ago

I would add that something as complex as a web browser would be impossible on the Mac App Store anyway -- a sandboxed browser wouldn't even be able to open file:// URLs.

Berners-Lee's original web browser was developed on the NeXT (direct ancestor of OS X)... But if he wanted to take that 1991 browser and distribute it on the Mac App Store today, he would have to remove important functionality.

chillacy• 12 years ago

I had to remove this for my app as well. Pain in the ass, but RCDefaultApp still works: http://www.rubicode.com/Software/RCDefaultApp/ even though it's pretty old

slm_HN• 12 years ago

The Mac App Store is a ghetto.

You keep using that word. I do not think it means what you think it means.

From Wikipedia: "A ghetto is a part of a city in which members of a minority group live, especially because of social, legal, or economic pressure." I don't see how that applies to the app store.

Maybe you're trying to use the slang definition of ghetto, in which case you want an adjective and not a noun. Try "The Mac App Store is ghetto, yo." But "The Mac App Store is a ghetto." I don't know what you're trying to say with that phrase.

cdcarter• 12 years ago

"X is a ghetto" is a running phrase in the tech community dating back to at least 2007 [0].

[0] http://harmful.cat-v.org/software/ruby/rails/is-a-ghetto

programminggeek• 12 years 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.

mikeash2• 12 years 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

lnanek2• 12 years 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• 12 years 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.

rbritton2• 12 years 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.

nicky02• 12 years ago

Actually there is no such rule.

Immortalin• 12 years 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• 12 years 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• 12 years 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• 12 years 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• 12 years 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.

Benefits of Selling Outside the Mac App Store

Related Stories