When a customer refunds your paid app, Apple refunds its 30% cut [edited]

Re:When a customer refunds your paid app, Apple refunds its ... by waheoo on Wednesday July 29, 2020 @09:36PM (#23993421)

You're forgetting development and marketing costs.

If there is a sunk cost component that number skyrockets.

Try adding a $5 customer acquisition and $1 developer time.

Thats a $1 profit, you need to sell 3 apps to cover the cost of apples fees. You also need to sell another 6 to cover the sunk costs you don't get back.

So 1 refund costs you 9 sales.

To cover the 1/10, you'll need to charge 10.90, or more likely 11 to cover the moving 30%.

But this is just to break even with your original $1 profit margin.

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Re:When a customer refunds your paid app, Apple refunds its ... by jachee on Wednesday July 29, 2020 @10:11PM (#23993680)

I'd argue that if 10% of your paying customers are refunding your product, you have a product problem.

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Re:When a customer refunds your paid app, Apple refunds its ... by waheoo on Wednesday July 29, 2020 @11:47PM (#23994430)

Depends on your product, model, and demographic.

At work our refund rate is like 30% for Japan. Investigating this, it turns out there is a cultural behaviour where converting at a higher rate early and refunding if it's not a good fit is the normal way of doing things.

And in a past life, general 4% refund/return rate is pretty common across most ecom markets.

Not saying apps are in this boat but if you ignore refunds in business you're in for a bad time.

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Re:When a customer refunds your paid app, Apple refunds its ... by jaifraic on Wednesday July 29, 2020 @11:51PM (#23994451)

Or a userbase that for some reason dislikes and abuses you. Maybe you have made enemies because of some random political statemant. A large enough group could ruin you.

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Re:When a customer refunds your paid app, Apple refunds its ... by gerdesj on Thursday July 30, 2020 @07:21PM (#24003882)

I deliberately simplified things. My "10" is the costed price of the app.

Ignoring all other factors, flogging the app on Apple automatically introduces a parasitic "tax". That is the hallmark of a monopoly.

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