Stop selling your software for peanuts

I guess someone has to say it: Developers are usually no great business men. Instead of using the great possibilities the internet and the various app stores are offering us, we are in the process of completely devaluating our own work, our software.

But let's start at the beginning: As you might know, beside the main products I'm working on, I'm also doing some experiments here and there, trying out how to make money today by writing smaller pieces of different software. That way, I also have a handful of apps on various app stores.
Last week, I received a "one star" rating for one of the nicer apps I have on there, along with a text like:
It's outragous that this app costs 9 euro!

And this for a quite complicated app, nearly without bugs, which solves a specific problem and needed in total about 4 man months of development time. And is updated regularily.
With apps in the app stores set to a price between 1 and 3 euros, people simply got used to these low prices. This way people begun to think that software is only worth about one euro. The problem: If you as developer don't have an app which sells a couple of thousands of times every month, you won't be able to live from this.

So here is a simple idea: Stop setting such a small amount of money as price for your software. You are destroying the market with this. Instead, demand a healthy, acceptable price, and restore the value of software development with this as nice side effect. I'm doing this already: My software is priced usually between 20 and 50 euro. And people buy it. And there are interesting side effects:
  • Before buying, people really read the description of your software, and actually think before hitting the 'buy' button. You get less negative reviews, less complaints, and it seems in average more 'intelligent' users.
  • Less people will buy your app, meaning you also get much less support requests.
And if your competition offers a similar product for that 1-3 euro price? You might not believe it, but people don't seem to care that much. My experiments show that I'm earning nearly the same from a product set to a price of 40 euro then when it was set to 9 euro before. And I don't have headaches anymore because of the huge amount of support requests I got when it was set to that cheap price.

26 comments, already:

Well said! I don’t have any apps, but working on one. I’ll keep this in mind.
Josh - 28 06 13 - 08:18

I disagree, If I see an App priced at €20 im not going to buy it, no matter how good it is. Software is a commodity and price is incredibly important. Maybe, if your apps not good enough to draw in the downloads required to make money, you shouldn’t bother making it.
Tom - 28 06 13 - 10:56

You say that, but you clearly don’t follow your advice: You are giving away your very complex looking Darkness Springs game. That sets the price for complex Indie game down to $0. People on the app stores do the same – they make something cool and set the price down to $0.
Ryan - 28 06 13 - 10:57

“Camels and rubber duckies” is a must read on this subject – http://www.joelonsoftware.com/articles/C..
Bojan - 28 06 13 - 10:59

@Ryan: That’s something a bit different, I blogged about why I made the game free here: http://www.irrlicht3d.org/pivot/entry.ph..
Also, I blogged even the sale details, if you are interested: http://www.irrlicht3d.org/pivot/entry.ph..
niko - 28 06 13 - 11:00

In what sense is the market being “destroyed”? Developers are being paid more and more. Developers are in more and more demand. There are more successful and innovative startups popping up than in any other industry. This seems like the patently successful market I can possible think of. And the result of that success is that competition is fierce, driving prices down – so apps are finding more and more innovative ways to make money while providing apps for free or very cheap. This is fantastic, and one example where Capitalism seems to be working.
Robin Winslow () (link) - 28 06 13 - 11:05

devaluate?
ak - 28 06 13 - 11:15

If there were some sort of mechanism to test apps before buying them, then people might not mind paying a higher price for apps. As it stands, people are laying out money not knowing if the app does what they want or even the quality of the app.
Luke Bonaccorsi () - 28 06 13 - 11:23

Actually the wage rate for programmers has gone down by 2% in nominal terms since 2008, in real terms that is obviously more. If big business can get away with price manipulation why not developers?
Matt K - 28 06 13 - 11:24

You seem to assume there’s one price level that everybody can deem “healthy, and acceptable.” This is not how the world works. Welcome to global free market ;)
Piotr - 28 06 13 - 11:27

lol. Welcome to the world of harsh reviews and comments.

Work on your messaging such that the brand you are projecting with the app is worth the 9 euros. You’ve sold the app, now make them realise in the app why it is so expensive in comparison to the 99 cent fart app.

Someone will see that comment now when making a buying decision, so you need to counter that assertion with your value proposition.

Keep your head up, they’re just biters :) Good luck!
Rene Dudfield () - 28 06 13 - 11:32

Please give credit where due.
http://www.innovatio.nl/
Aldert () (link) - 28 06 13 - 12:16

I like the sentiment that if you charge too less, the general population stops valuing the software. The collective conscious of the developer community is what sets the price in our field. This is because there is no “raw material” at work here. The only factor here is how much WE think it is worth. I face similar problems on freelancing sites.

But I do like 2 points raised by a fellow commentors that:
1) People need a mechanism to test apps before they buy it
2) Developers are coming up with innovative ways to make money for apps.

So we see a market trend is seen where apps are downloaded for free, but u make the users pay later for additional stuff. My favourite example here is League of Legends which is perhaps the largest free-to-play MOBA game out there. It has an estimated 32 million registered players. And it makes money not by charging people to download. They charge players for cosmetic stuff, skins, etc. And u can also use real money instead of in-game money for other items as well. So it also maintains a balance between paying and non-paying customers (unlike most online games). So non-paying gamers dont feel left out, instead eventually they feel so much part of the game, they WANT to give the company money for a few extra services
Musa - 28 06 13 - 12:21

@Aldert because no-one has ever had the same idea as someone else and is evidently plagiarising, even considering that the problem is pervasive enough to have affected a large amount of developers.
SRK - 28 06 13 - 12:22

Yesterday, June 27th 2013, we went on a mission to heal the global app economy.
To all app developers: Please use our pricing strategy if you believe in it.

Proof 1: http://market.thenextweb.com/offer/628-a..
Proof 2: http://www.innovatio.nl/
Aldert () (link) - 28 06 13 - 12:24

@Aldert: Yes, that’s nice. I’ve not seen your “mission to heal the economy” before, but thanks for pointing it out here. Twice. Do it a third time and I’ll have to classify this as spam :)
niko - 28 06 13 - 12:34

@Niko: If you had the same sort of idea today and decided to post it that’s fine to me. Idea’s usually happen in tandem.
Aldert () (link) - 28 06 13 - 12:36

Totally agree. The App Stores are a great means to divulge great applications but it’s up to the developers to decide what a fair price for their work is. I guess the low price phenomenon is not unlike, say, a big supermarket chain selling super cheap to get more sales and killing the competition. The problem is – as you say – if everyone does it, software loses value. And in the same way a bakery will not sell below their cost of ingredients, we should not sell below the cost of ours (time, dev tools, mental work, etc).
Pedro () (link) - 28 06 13 - 12:38

Totally agree with your reasoning. The most illogical part as a developer is how people are willing to pay more than 500$ for a phone but balk at the idea of a 10$ app that they’re going to use a lot.

The problem is that advertising supported apps give the illusion that the apps themselves are free and train people to expect price parity since an app is an app. One way to over come this problem is to use a freemium model that sells the priced app through an in-app purchase.
Walid Damouny () (link) - 28 06 13 - 14:22

@Tom – if some type of app is already a commodity, sure, it applies – but the point is, if you have a unique app with no/few direct competitors, then good business sense is to do everything to make sure that your app isn’t commoditized. Just as with any physical products – if your product line becomes a commodity, then it’s usually bad for your business.
Pete - 28 06 13 - 15:17

Looking over your offerings and their prices, I think most of your apps are absurdly overpriced and agree with your reviewer (although price is not a sensible thing to review a product on – everyone can see it already). That’s not to say you’re wrong to price them that high – it might maximise your earnings, but that’s no reason for other people to start adjusting their pricing models to support yours.
Richard Smith () - 28 06 13 - 15:22

Less ABUSE… fewer misuses of “LESS/FEWER”... instead of “devaluating,” I’d suggest you’re DISEDUCATING.
digao - 28 06 13 - 17:44

Diago, are you a teacher or just a grammar nazi? You know, not all people have english as native language…
Hellen - 28 06 13 - 18:25

It’s disturbing to think that people view software as a commodity. To some extent it is, but it takes a lot of effort to create it. Developers aren’t working in a sweatshop for peanuts, churning out little subroutines that are part of an app. They’re creating the whole damn app, including designing it, testing it, marketing it, etc. That costs more than $1/app. Something on the order of $10 or $20 and past $100 is far more reasonable.
Rudolf - 28 06 13 - 22:30

I guess it all comes positioning and the perceived value you can provide the purchaser and the model you want to apply to your business.
Bradley (link) - 01 07 13 - 15:02

Oh gosh, people talks about “Innovative ways of making apps”. Ok, let’s talk about user experience. This “innovative” apps (games most of all) is a crap. Cuz if you don’t give them your money, you can’t play normally, you must wait for some time to make some action or other players who spend money for some “digital crapy gun” will dominate you in any aspect. That is not for normal user want’s. Customer is a king and queen in one face, not a milk cow! It’s better makes playable games without in-game purchases (or trade some skins, but not the content that normal user can’t reach without money or with huge amounts of time, or else, unlike the “money user”;) set start price $10, but for god’s sake DON’T MAKE MORE TRASH WITH IN-APP PURCHASE!!!
SomeGuy - 11 07 13 - 12:03


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