Amazon Will Control Prices on Their New App Store

[dgstorm]

Previously, we reported that Android was getting a new Amazon App store, and while that is welcome news... according to a report from BusinessInsider, Amazon will be controlling the prices on their new app store, not the developer. This doesn't bode well. On our current Android Market (and even on the iPhone), the app developers determine their app pricing. It's strange that Amazon is choosing to go this route. Here's a quote from the article describing Amazon's new 'model':

Here's how it works: When developers submit apps to Amazon's app store, they will be able to set a suggested retail price ("MSRP"). It can be free, it can be $50, whatever, but it has to be the same price as (or cheaper than) the app is selling anywhere else.

Then Amazon -- not the developer -- will set the retail price. It can be full price, it can be a sale price, or it can be free.

Developers will get to take home the standard 70% of the app's retail price (what the app sells for) or 20% of the MSRP (what the developer thinks it should sell for), whichever is greater.

So if your $10 app is sold for $10, you get $7. If it's sold for $5, you get $3.50. But if it's sold for $1 or free, you're at least guaranteed $2, or 20% of your $10 MSRP.

This seems to be a double-edged sword. On the one hand, it could generate more revenue than standard pricing for the developer. On the other, they could be faced with a situation where their app sells for more on iPhone or Android Market than it does on the amazon market, limiting their sales on the other platforms. What do you guys think of this? Any developers in the forums, please sound off. We want to hear your thoughts.

Source: BusinessInsider via ITProPortal

 

[NeoPhoenixTE]

This just made it so the Amazon Market will get worked.

Only people who can benefit financially from selling on Amazon will list their app on Amazon, while those who wouldn't profit will just use the Android Market to publish.

This is going to be a double-edged sword with only one edge getting used.

 

[hookbill]

This just made it so the Amazon Market will get worked.

Only people who can benefit financially from selling on Amazon will list their app on Amazon, while those who wouldn't profit will just use the Android Market to publish.

This is going to be a double-edged sword with only one edge getting used.

This is exactly what Apple does in their very successful app store. And I've been preaching for weeks that Android people need to get ready to open their wallets for decent apps.

BTW I read today that the app store is now generating more revenue then iTunes.

 

[beneharris]

This just made it so the Amazon Market will get worked.

Only people who can benefit financially from selling on Amazon will list their app on Amazon, while those who wouldn't profit will just use the Android Market to publish.

This is going to be a double-edged sword with only one edge getting used.

either that, or everyone is going to jack up their MSRP, so they get 20% of that, and easily make more than they would on the android market.

there has got to be more to it than that, it just seems like either it won't work, or its going to get abused

 

[alienware777]

So I can say that my app is worth $100, and even though Amazon changes it down to $5, I still will make $20 per sale? Hmm...

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[MoeDaddy]

Or they leave it at $100 and you sell zero apps. I think this is so amazon can structure sales in accordance to what their research shows is the best price and it's in amazon's best interest to sell the apps for the a combination of price and volume that maximizes profit. There is always a perfect price to volume ratio that quite frankly they may be in a better position to gauge than most devs.

 

[Jaxidian]

Or they leave it at $100 and you sell zero apps. I think this is so amazon can structure sales in accordance to what their research shows is the best price and it's in amazon's best interest to sell the apps for the a combination of price and volume that maximizes profit. There is always a perfect price to volume ratio that quite frankly they may be in a better position to gauge than most devs.

And they are also in a position where it's in their interest to undercut the competition's prices, while losing profits for developers, just to increase the popularity of their app store. I don't like it - it screws over the developers while that are in growth mode. Now once they hit profit mode, then you're absolutely correct. But until then this can only screw the devs since they aren't even allowed to compensate for it by pricing the app on Amazon higher than anywhere else.

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[MoeDaddy]

That is a valid point but devs can always not put there apps on amazon but I'm sure amazon will be a big seller in the future as they have a huge customer base. Will be interesting to see what comes of it.