Friday, September 23, 2011

Start-Up Watch COD: appbackr is the wholesale marketplace for apps

Many talented people have made good money developing and selling mobile apps in the iPhone and Android stores. But as the number of apps has increased, so have the number of challenges.
Quite simply, it’s gotten harder and harder to get noticed, and the costs in time and money to promote an app have increased.
appbackr is a wholesale marketplace designed to help developers and would be app backers (backrs in the parlance) by enabling them to connect and transact with one another. The backr purchases a quantity of app instances at a wholesale price, and then resells those instances at the full price. They make money on the spread between the wholesale and retail prices, while the app developer gets paid immediately for their work.
It’s essentially a three step process:
  1. Developer posts their app in the marketplace. The wholesale price is based upon the retail price and whether the product already exists today or is in development. The developer is not sellingproviding an ongoing right to sell copies of an app, only the right to promote the number of app instances purchased via the appbackr marketplace.
  2.  A “backr” purchases instances of the app at a wholesale price, and then promotes them in whatever means they choose. At the moment of initial wholesale purchase the developer receives a cut of the purchase price immediately.
  3.  As apps are sold, the backr earns the bulk of the profit, while the developer receives an additional payment per app as they sell. Backrs are credited with sales in one of two ways. If a developer chooses sequential payment, the first buyer of apps is credited with the first sales on the Apple or Android markets. When their quantity of apps is sold, the second buyer is credited with the next sales and so forth. The other payment method gives backrs a percentage of sales on the Apple and Android markets based upon the percentage of app instances that they purchased divided by the quantity purchased by all backrs.

appbackr charges a reasonable commission per sale to make money.
Because a concept app may not have a set launch date if it's still in development, the potential return to the backr is much higher. Concept apps have a potential profit of 54% while backing a finished app has a potential profit of 26%.
Here’s the very clear video intro:
Developers who participate in appbackr must be a registered Apple and/or Android developer.
For the app developer, the marketplace provides immediate revenue to pay salaries and fund app improvements or additional apps. It also takes the “risk” of marketing activity out of the question for them. Because the people who make apps are generally NOT marketers, this risk reduction is a serious benefit.
While backrs are assuming risk in this model, it is likely that they may have special capabilities that make them ideally suited to promoting certain kinds of apps. Access to a network of potential users, for example, can make the process of publicizing an app and converting prospects a whole lot easier.
I think this is a powerful model that can help spawn continued growth in the app space while allowing more people to participate and profit.

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