Selling my app
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Hi all ive written this app and a company wants to see it to their customers as it "talks" to their system, now i know through contacts that they're talking about selling it for up to 150 a copy (AUD) -though the first copy has pretty much been sold for 60 bucks they wanna know how much i want per copy..... how much do i want? how much should i expect to get for my app from them? they reckon they should take 60% "In normal software reselling, the reseller (retailer) takes about 60%." what do you guys reckon/ is there somewhere i should look for more info on whats "normal"? bryce
In general, the more number of copies they sell, the less commission they get (in precentage) because the cost of marketing and stuff and other overhead per copy gets reduced. If you retain the ownership, and it is sold under your trade and brand name, their percentage will be less, since you are at risk. If the product is bad, or fails to catch up in the market for whatever reason, you get a bad name. They are just acting as your marketing agents here. On the other hand, if they take ownership of everything, and all you are getting is a royalty type of thing, their share in the profits will be much larger, since now they are taking all the risk. Another factor is how well known the product or the product type is in the market. For example, if you are selling an email server, everyone knows what an email server is and why they need it, so they don't have to work in this area. All they need is to sell your particular brand. The "primary demand" is already there, so to say, all they need to do is to create the "secondary demand". On the other hand, if you are selling say, a fancy software no one has heard of before, they'll have to first tell the potential customers what it is, why they need it, and so on. Much more work, and lesser chances of succeeding with a particular customer. Naturally, their percentage goes up. Also, if they are selling a software from say, Norton, it'll be much easier for them than say, a software from say, Bryce Kickass Software Inc., since the latter is not well known. So, in order to arrive at a fair figure, you need to consider all these factors, and possibly more. And who will do the packaging, if any? If you get 40% out of each sale, and also pay for the packaging, transport, storage, and other expenses, you might later regret it (sorry). Plus, as Chris said above, be very careful what gets written in the contract. Good luck! :)
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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In general, the more number of copies they sell, the less commission they get (in precentage) because the cost of marketing and stuff and other overhead per copy gets reduced. If you retain the ownership, and it is sold under your trade and brand name, their percentage will be less, since you are at risk. If the product is bad, or fails to catch up in the market for whatever reason, you get a bad name. They are just acting as your marketing agents here. On the other hand, if they take ownership of everything, and all you are getting is a royalty type of thing, their share in the profits will be much larger, since now they are taking all the risk. Another factor is how well known the product or the product type is in the market. For example, if you are selling an email server, everyone knows what an email server is and why they need it, so they don't have to work in this area. All they need is to sell your particular brand. The "primary demand" is already there, so to say, all they need to do is to create the "secondary demand". On the other hand, if you are selling say, a fancy software no one has heard of before, they'll have to first tell the potential customers what it is, why they need it, and so on. Much more work, and lesser chances of succeeding with a particular customer. Naturally, their percentage goes up. Also, if they are selling a software from say, Norton, it'll be much easier for them than say, a software from say, Bryce Kickass Software Inc., since the latter is not well known. So, in order to arrive at a fair figure, you need to consider all these factors, and possibly more. And who will do the packaging, if any? If you get 40% out of each sale, and also pay for the packaging, transport, storage, and other expenses, you might later regret it (sorry). Plus, as Chris said above, be very careful what gets written in the contract. Good luck! :)
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
component source take a 40% commission (for selling components), but thats with marketing and lots of other stuff included. i think 60% is a rippoff , unless they take the support for your app , then i would say its a VERY good deal on your side.. if you sell it yourself online with a payment system like "eMetrix" (emetrix.com) it will cost you some 13-15% //Roger
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component source take a 40% commission (for selling components), but thats with marketing and lots of other stuff included. i think 60% is a rippoff , unless they take the support for your app , then i would say its a VERY good deal on your side.. if you sell it yourself online with a payment system like "eMetrix" (emetrix.com) it will cost you some 13-15% //Roger
Yes, yes, support too, I almost forgot that one. Good point. I agree with you that 60% is a bit too much, but then the devil is in the details, isn't it? As you mentioned, maybe they are giving support and doing all the marketing. Lots of other things to be considered too.
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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Yes, yes, support too, I almost forgot that one. Good point. I agree with you that 60% is a bit too much, but then the devil is in the details, isn't it? As you mentioned, maybe they are giving support and doing all the marketing. Lots of other things to be considered too.
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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Yes, I also believe 60% is way too much ... About the support, does it include bug fixes/upgrades? I guess you're selling only the executable, not the source code. If this is the case, you should negotiate this point as well.
:) Yes, you are right, but it was bryce who was asking the question and selling the app, not me. :)
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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:) Yes, you are right, but it was bryce who was asking the question and selling the app, not me. :)
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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bryce wrote: they wanna sell it individually they don't seem to wanna buy 200 or whatever No!!! This is the oldest trap in the world! It's like a user saying "It's what I asked for, but not what I wanted"! IF they start selling your software, they'll come back asking for more and more discounts, until you give up. If they want to buy unit by unit, start with the full price, and each unit they buy slightly reduces the price. After all, what is the difference between them and a common user, which buy only one license? Until they buy a massive ammount of units, none. If they want a massive discount, ask them to buy a massive ammount. If they want to buy one unit only, give them a 5% discount for a start. They'll almost cry, they'll say beautiful words, like "partnership", "win-win scenario", they'll treat you like the most selfish man in the world, then they'll start with "you are ruining a fruitful relationship", "how can we start?" (this one is specially fun), "we are a BIG company", "you have competitors", "we lost the interest". Then, they'll disappear for a week or two, and after this, if they were really serious, they will come back with a proposal of 10~20 units. I fell for this scam countless times. Please, don't be stupid like me.
It's not the fall that kills you: it's the sudden stop - Down by Law, Jim Jamursch (1986)
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Hi all ive written this app and a company wants to see it to their customers as it "talks" to their system, now i know through contacts that they're talking about selling it for up to 150 a copy (AUD) -though the first copy has pretty much been sold for 60 bucks they wanna know how much i want per copy..... how much do i want? how much should i expect to get for my app from them? they reckon they should take 60% "In normal software reselling, the reseller (retailer) takes about 60%." what do you guys reckon/ is there somewhere i should look for more info on whats "normal"? bryce
bryce wrote: they reckon they should take 60% So you get 40%? That's a good deal, I think. Back in the 80's during the game craze, a typical contract would give you 1% - 3% of the PROFITS. Did you write it for the company as an employee or a contractor? Technically, then they own it outright unless your contract says otherwise, so it's nice of them to give you anything. Of course, "nice" is relative, in my book. "Nice", like they make megabucks already and you're struggling to make your car payments nice. bryce wrote: what do you guys reckon/ is there somewhere i should look for more info on whats "normal"? Anything goes. Here's a little story. I've been a consultant for a boatyard and put together a complex work order, billing, and inventory management system for them. They've invested about $25,000US in the product. Another boatyard contacted me and wanted to buy it from me. Now, I completely agree that my client owns the rights to the software, but because it isn't a clean sale (there's customization, database conversion issues, training, process adjustments, etc), they can't just sell it without my services to help out. We agree to a sale price of $10,000. My client has repeatedly said "go for it", and then, smelling money, they one day show me this "agreement" that they want me to sign and offer me $2000 of the $10K sale. I think I laughed in their face. My client's gross revenues are $3million USD, and the owner takes home around $200,000 a year. Come on, give the little guy a break. Happy ending. After I walked out of the meeting, they came to their senses the next day and said I could have the whole $10K if I gave them a discount on a 150 hours of further consulting (a savings of $4500 for them). Cool. That worked for me, and I felt it was a fair deal both ways. Marc Help! I'm an AI running around in someone's f*cked up universe simulator.
Sensitivity and ethnic diversity means celebrating difference, not hiding from it. - Christian Graus
Every line of code is a liability - Taka Muraoka
Microsoft deliberately adds arbitrary layers of complexity to make it difficult to deliver Windows features on non-Windows platforms--Microsoft's "Halloween files" -
bryce wrote: they wanna sell it individually they don't seem to wanna buy 200 or whatever No!!! This is the oldest trap in the world! It's like a user saying "It's what I asked for, but not what I wanted"! IF they start selling your software, they'll come back asking for more and more discounts, until you give up. If they want to buy unit by unit, start with the full price, and each unit they buy slightly reduces the price. After all, what is the difference between them and a common user, which buy only one license? Until they buy a massive ammount of units, none. If they want a massive discount, ask them to buy a massive ammount. If they want to buy one unit only, give them a 5% discount for a start. They'll almost cry, they'll say beautiful words, like "partnership", "win-win scenario", they'll treat you like the most selfish man in the world, then they'll start with "you are ruining a fruitful relationship", "how can we start?" (this one is specially fun), "we are a BIG company", "you have competitors", "we lost the interest". Then, they'll disappear for a week or two, and after this, if they were really serious, they will come back with a proposal of 10~20 units. I fell for this scam countless times. Please, don't be stupid like me.
It's not the fall that kills you: it's the sudden stop - Down by Law, Jim Jamursch (1986)
This is actually pretty interesting! Would you consider writing an article about your experiences with selling stuff and dealing with resellers, and perhaps suggesting the pitfalls to avoid? I know I would definitely be interested in reading it. I imagine others would as well. Maybe there could be a new section on CP for articles of this nature. ¡El diablo está en mis pantalones! ¡Mire, mire! Real Mentats use only 100% pure, unfooled around with Sapho Juice(tm)!
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This is actually pretty interesting! Would you consider writing an article about your experiences with selling stuff and dealing with resellers, and perhaps suggesting the pitfalls to avoid? I know I would definitely be interested in reading it. I imagine others would as well. Maybe there could be a new section on CP for articles of this nature. ¡El diablo está en mis pantalones! ¡Mire, mire! Real Mentats use only 100% pure, unfooled around with Sapho Juice(tm)!
I second that. :-D
Regards,Rohit Sinha
...celebrating Indian spirit and Cricket. 8MB video, really cool!
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bryce wrote: they wanna sell it individually they don't seem to wanna buy 200 or whatever No!!! This is the oldest trap in the world! It's like a user saying "It's what I asked for, but not what I wanted"! IF they start selling your software, they'll come back asking for more and more discounts, until you give up. If they want to buy unit by unit, start with the full price, and each unit they buy slightly reduces the price. After all, what is the difference between them and a common user, which buy only one license? Until they buy a massive ammount of units, none. If they want a massive discount, ask them to buy a massive ammount. If they want to buy one unit only, give them a 5% discount for a start. They'll almost cry, they'll say beautiful words, like "partnership", "win-win scenario", they'll treat you like the most selfish man in the world, then they'll start with "you are ruining a fruitful relationship", "how can we start?" (this one is specially fun), "we are a BIG company", "you have competitors", "we lost the interest". Then, they'll disappear for a week or two, and after this, if they were really serious, they will come back with a proposal of 10~20 units. I fell for this scam countless times. Please, don't be stupid like me.
It's not the fall that kills you: it's the sudden stop - Down by Law, Jim Jamursch (1986)
erm i did i mention that i currently contract at the place? they make a product (hardware and software) which has about 500 (but 2k worldwide) customers in OZ who pay a montly fee for their service i made the app at home in my spare time and it hooks into their system - providing an alerting system (email, dialog to screen and audio) Bryce