Apple last year launched the App Store Small Business Program to support small businesses and independent developers, and the annual in-app transaction volume will be $ 1 million. The following commissions have been reduced from 30% to 15%.
In order to enjoy this benefit, some developers choose to change the app to a free subscription or inform users to subscribe to services through other channels than the Apple App Store.
Curtis Herbert, an indie developer of iOS apps, joined the App Store Small Business Program when it launched last year, but will soon lose his eligibility as app transactions continue to rise.
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Apple launched the App Store Small Business Program in January 2021, and developers with annual app store transactions of less than $1 million need to pay commissions from 30% to 15%.
However, if an app’s transaction volume exceeds the $1 million limit in a year, the developer is no longer eligible for the program, and all transactions for the rest of the year and the following year are subject to a 30% commission to Apple. Developers can reapply for the program if their in-app transaction volume falls below $1 million in the next year.
“The extra 15 percent or $150,000 a year feels good,” Herbert said. “It can be used for marketing or recruiting, and it’s a bit extra.”Participating in the program has accelerated his business growth, Herbert said, allowing him to achieve his goals six months to a year ahead of schedule. But Herbert estimates that his skiing app Slope will be disqualified from the program in November.
Herbert isn’t particularly concerned about losing money again after in-app transactions exceed the project’s limit, believing the business growth trajectory will offset the 15% extra commission.
“There’s an odd middle point in the business development where if you can’t grow revenue by more than $200,000 a year, you end up with fewer earnings,” Herbert said. “If it gets closer to the $1 million mark, it will likely continue to accelerate growth, hopefully not standing still.”
Cardpointer, an app developed by independent developer Emmanuel Crouvisier, helps users enjoy more swipe rewards. He also had the pleasure of saving transaction fees from the App Store Small Business Program. With the annual transaction volume in the app approaching the $1 million mark, Kluwissil limited the transaction volume in various ways to maximize his own interests.
Cruvisier took advantage of a new policy in the Apple App Store. This policy allows developers to communicate with users about other ways to order from other non-Apple channels.
“I occasionally email users with special offers to subscribe through Stripe — so they don’t count toward my annual in-app transaction,” Kluvisil said. Many developers have taken various measures, such as offering subscription discounts to users if they find that the annual transaction volume is approaching the $1 million cap as the end of the year approaches.
An independent developer who quit the App Store’s small business program in December asked not to be identified because he didn’t want anyone to know that they made so much money from their apps.
“If I make all of my subscriptions free at the end of the year, that would mean a saving of $150,000 next year,” he said. “I decided myself not to cheat the system.”
The developer called circumventing the limit “mistakes and stupid,” while revealing that he wasn’t immediately kicked out of the project when it hit $1 million in annual transactions. The 30% commission only kicks in when the limit is exceeded by about $20,000.
The developer says he appreciates the project but adds: “I still think it’s time to take a 15% commission on the first $1 million of transactions a year as the Google Play Store does. Anyway, I really like how Apple started to do this kind of thing.”
