Is Google Play & Apple 30% Margin Policy Bad For Startups?
Finally, after hours of research and analysis, you’ve come up with a million-dollar idea for a mobile app. Then you spend hours of coding, testing, and polishing the app to bring it to a final shape to launch it.
You can only launch your app either in the Google play store or Apple store. But now to your surprise, you find after all the hard work, you will only get 70% of the revenue from the sales, and Google or Apple will get 30% of the revenue.
Yes, for every sale accounted on behalf of your app through the Play Store, Google will gobble up a whopping 30% margin. This include app sale and all in-app purchases. Apple is not be left behind, as it started this concept of 70-30 margin cut way back in 2011. In fact, since the inception of this margin policy, Apple has made a tremendous profit close to $51 billion.
Why is it Bad For Startups?
Ten years ago, if you had an application ready for sale, it was pretty much hard to find the right platform to sell your products. Apart from the right platform, you also need to spend a hefty sum in marketing your product. But with the advent of platforms like Google Play Store and App Store, you get the basic promotion for your app, top-quality analytics, hosting platform for your app along with a global audience.
Even though these seem to reduce a lot of burden from the developer’s shoulders. Still, the 70-30 margin doesn’t seem to be fair. Moreover, to run salt to your wounds, the recent announcement of the Developer Program Policy, effective from January 2021, apps will be restricted from using any 3rd party payment gateways. Hence, any payments in the app need to use only the Google Play payment system.
Startups will be affected at large because of this margin policy. Unless your app is popular, it doesn’t matter even if you do have large visibility. Hence, if you are a startup company and just started to sell your app online, the 30% margin could hamper a lot on your profits.
While people throng Google Play store or App store for various reasons including security, global audience, support, etc, still the 30% margin policy could affect a lot of startups. To come out of this hassle, startups need to look at other alternatives Google Play for publishing your Android App. We’ll be covering it in our next article.
If you have a million-dollar idea and looking for a trusted development partner to execute your idea and launch your mobile app, please get in touch with us. We’ll help you build the app of your dreams. You can reach us at firstname.lastname@example.org.