If you have an app made, it is often the intention that the initial investment will be recouped and the app will subsequently make a profit. In this article we show several popular revenue models to achieve this goal.

Earning money with an app?

Not every organization wants to make money directly from the realization of its app. Some companies, for example, have an app made to optimize internal processes or increase brand awareness. Others use it as an alternative or addition to their existing website or overall service. Consider, for example, H&M, which also makes its webshop accessible via an app. A revenue model is therefore not always necessary.

Does your app have a profit motive? Then it is wise to think about revenue models before you start developing your app. This way you can estimate in advance whether your app will pay for itself, generate profit and save a lot of time and costs in the development phase.

Revenue models for apps

If you want to make an app that makes money, there are several options today. We explain the most popular in-app purchases models.

Paid app

The most obvious way to make money from your app is to put it up for sale in the Google Play Store or App Store for a certain price.

Revenue model app: Pay price

A disadvantage is that most people often want to try a digital product before making a purchase, especially if they don’t know it yet. A smart strategy is therefore to initially offer a free version with limited access.

Costs to take into account are:

In-app purchases

Another common way to make money with an app is to offer in-app purchases. These are digital products or services that are used in addition to the existing app.

Examples are:

• New levels, skins or weapons in games
• Credits of digital currency
• Premium content

The example below is a free downloadable photo editing app. The basics are free, but additional filters are available for purchase through in-app purchases.

Revenue model app: in-app purchases

Note: For in-app purchases, both Google and Apple take 30% of each digital product.

Sales of physical products

Another revenue model for your app is selling physical products. For example, many web shops offer an alternative environment in the form of an application. Advantages of an app are that you can send push notifications and make use of other native functionalities of the user’s device. A quick look in the shop is also a nice way for many users to kill time. With an app you are always top of mind with your user and only one push of a button away.

Google and Apple only take a percentage of digital products. So you don’t have to part with anything to sell physical products.

Subscription model

In addition to selling digital or physical products, you can also opt for a subscription model. A user pays a fixed amount per month to use your app. Examples are Netflix and Storytel. The content of these apps is only available to subscribers.

Clare Louise