The Amazon Appstore has now joined Google in following Apple’s lead in reducing commissions for smaller developers – but with an interesting twist. The Amazon Appstore is an alternative place for people to download Android apps.
Apple last year announced its Small Business Program, a clever way to reduce antitrust pressure by reducing its cut of app sales to 15% for all but the very largest developers. Google did the same this year, in a rather fairer way, and now Amazon has come up with its own twist …
Background
Apple had been facing increasing scrutiny from antitrust regulators over the 30% commission it charged developers on app sales and in-app purchases.
The company made its first concession back in 2016, when it reduced its cut on in-app subscriptions to 15% in the second year. But the dramatic shift was in its so-called Small Business Program.
While billed as something aimed at small developers, the reality was that 98% of them would benefit. Apple was effectively switching to a 15% commission as standard, with a higher 30% one applying only to the very largest developers. Since the latter generate most of the money, it had a limited impact on Apple’s App Store income.
Google did the same, but gave everyone the 15% rate for the first $1M of revenue – unlike Apple’s all-or-nothing approach.
Amazon Appstore commission
AFTVnews reports that Amazon is also reducing its commission for developers earning less than $1M a year, but with two possible rates.
Instead of cutting the commission to 15%, Amazon reduces it to 20% – but offers many a way to cut the effective rate to 10%.
The Amazon Appstore has announced that it will be reducing its cut of developer revenue from 30% to 20% for developers that earn less than $1 million in revenue per year.
The new terms, which Amazon is calling the Amazon Appstore Small Business Accelerator Program, will also provide developers with AWS promotional credit in an amount equivalent to 10 percent of the developer’s revenue if they earn less than $1 million in revenue per year. If a developer chooses to use those AWS credits, that brings their total Amazon Appstore revenue share up from 70% to an equivalent of 90%.
Many developers use Amazon Web Services (AWS) to host their websites and servers, so as long as those bills amount to 10% or more of their Amazon Appstore revenue, their effective commission rate on app sales will be just 10%.
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