Ask HN: What justifies 30% of sales by app stores?

#1

Post by funwie » Thu, Aug 23, 2018, 7:30 PM UTC

Where do you stand on this idea of sales percentages to App Store? Is it justifiable?

App stores (iOS App Store, Google Play Store, Microsoft store) charge a percentage of sales made through the stores.

Which services do these stores offer that warrant them to receive up to 30% of sales.

An app in any app store already has 30% off it’s revenue. That is a huge amount. For some businesses, that is profits.

I assume business have to pass this 30% to someone else before they can make a profit. Guess who that someone is? Consumers

Re: Ask HN: What justifies 30% of sales by app stores?

#2

Post by wmf » Thu, Aug 23, 2018, 7:34 PM UTC

Discovery (search, recommendations, and top 10 lists).

It would be interesting if apps could opt out of being discoverable to get lower fees.

Re: Ask HN: What justifies 30% of sales by app stores?

#3

Post by moonbug » Thu, Aug 23, 2018, 7:37 PM UTC

The simple fact that they have a monopoly on access.

Re: Ask HN: What justifies 30% of sales by app stores?

#4

Post by kjksf » Thu, Aug 23, 2018, 7:42 PM UTC

"is it justifiable" is an irrelevant question.

Apple charges 30% because they can. They can because software companies have demonstrated they are willing to pay that 30%.

Apple holds all the cards so they have pricing power.

Contrary to your claim, this doesn't increase the price by 30% because the price is not determined by the software company but by customers' willingness to pay.

Price of software on iPhones is impossibly low. That's because for every piece of software, there's a lot of competitors providing such software and ecosystem evolved toward incredibly low prices.

That's also why making make mobile software is a terrible business for most.

Re: Ask HN: What justifies 30% of sales by app stores?

#5

Post by oldmancoyote » Thu, Aug 23, 2018, 7:46 PM UTC

Someone might argue that Apple is buying wholesale and selling retail where the standard markup is 33%. It's not my issue. Just an observation.

Re: Ask HN: What justifies 30% of sales by app stores?

#6

Post by throwawaymsft » Thu, Aug 23, 2018, 10:12 PM UTC

> What justifies 30% of sales by app stores?

Supply and demand. If you think you could sell 70% as much outside the store then go for it. How much do you think Amazon, Best Buy, Walmart and Target mark up their inventory?

Re: Ask HN: What justifies 30% of sales by app stores?

#7

Post by dchuk » Fri, Aug 24, 2018, 12:06 AM UTC

>>> Which services do these stores offer that warrant them to receive up to 30% of sales.

Tooling? Network effects? Security? Distribution?

Re: Ask HN: What justifies 30% of sales by app stores?

#8

Post by gesman » Fri, Aug 24, 2018, 12:55 AM UTC

If you have relationship with powerful software reseller that can boost your sales 50-200% - they can charge 50% and in some cases up to 75%.

It's not unheard of for young software companies to give 100% of software sales to powerful partner to immediately boost visibility and brand awareness.

Re: Ask HN: What justifies 30% of sales by app stores?

#9

Post by db48x » Fri, Aug 24, 2018, 1:45 AM UTC

All distributors take a percentage of the sales. In fact, physical distributors probably have even better terms.

Re: Ask HN: What justifies 30% of sales by app stores?

#10

Post by mailslot » Fri, Aug 24, 2018, 2:56 AM UTC

I hate paying it... but let’s be honest. Before app stores and the hardware & phone OS’s they run, mobile apps weren’t a thing.

The justification is the distribution, curation, promotion, updates, support, etc. The massive infrastructure needed to deliver the latest & greatest mobile tech, the APIs that let developers take advantage of it, native payment processing, tax reporting, etc.

You don’t even need an LLC to go into business for yourself. That’s huge and worth 30% IMHO.