Many new app developers and those outside of mobile development incorrectly assume that 100% of the app's cost goes to the developer. If you sell 1,000 copies of your app at $0.99 each, you'll probably earn closer to $693 than $990. So, who gets the rest of the earnings? It differs by app store. Here is how it works.
App store fees
App store fees are more important when you are starting out or if you have lower sales. As you sell more apps, the store fees become much less of an issue. The app store's take is usually based on a percentage, so the more you sell, the more they get too.
App store percentages
Many app stores get most of their income from paid apps; the stores take their share before passing the money on to the developer.
The industry standard for how much income app stores take is 30%. We can probably thank Apple for setting that as the standard - they weren't the first, but the iOS app ecosystem has been used as a model by many other players in the mobile app space.
There are app stores that differentiate themselves by paying a higher percentage to the developer; for example, I've seen developers get as high as 91% of the app's sale price from SlideME.
It's not just about getting the most from each sale -- it's about getting lots of sales too. Most of the app stores that pay more than 70% of the revenue to developers don't have very high traffic. While it's good to engage those app stores, you can't ignore big markets like Google Play.
So can you do about this? For the most part, take your lumps and move on. I think that paying the distribution channel 30% for their hard work to build the marketplace and bring in the customers is money well spent and significantly better than the deal you would get selling physical goods.
Payout schedules and thresholds
Unfortunately, you don't get your money immediately when you make a sale. Almost every Android app market holds on to your money for a period of time.
Google Play is the best when it comes to payouts; it pays you out just a few days after the month is over, and with apparently no minimum. Many other app markets pay about 30 days after the end of the month.
The catch is some markets have payout thresholds, which means you won't see any income until you sell a certain amount. I've seen thresholds as high as $250, which is a bad deal for smaller developers.
I reviewed over 40 Android app stores for my book on the Android ad networks, and I keep updating that list. If you're interested in pursuing other app markets, read my TechRepublic post on three reasons to release Android apps into multiple markets. There is a lot to be gained from pursuing multiple app stores, but one thing in common amongst all of the app stores is that every market takes a cut of your sales -- this is just a cost of doing business in mobile development.
Tim Mackenzie, author of the Android Income Series books, is a software engineer that escaped the cubicle world at a large company to go solo with Android app development. He uses this freedom to teach others how to make money with Android apps. Visit the ProjectJourneyman.com blog for the information you need to start earning with Android apps.apps.