As an app developer, it’s essential to understand the various business models available to make the most money from your development services. This article outlines the best app business models for you to consider.
Additionally, it’s crucial to align these models with the appropriate mobile app business structures to ensure they are implemented effectively. Understanding both elements can significantly impact the success and scalability of your app in the competitive market.
Freemium Model
The freemium app business model is one where you offer a free app with in-app purchases. This is a great way to monetize your app as it allows users to try it out before they commit to paying for it. However, to make this model work, you must ensure that your app offers enough value to persuade users to make in-app purchases.
An example of a freemium app is Supercell’s Clash of Clans. The app is free to download and play, but users can make in-app purchases for extra resources and upgrades.
Advertisement Model
The advertisement app business model is one where you display ads in your app. This is a great way to monetize your app if you have a large number of users, as you can generate a significant amount of revenue from advertising. However, it’s essential that ads are not intrusive and do not negatively impact the user experience.
An example of an app that uses the advertisement model is Facebook. The app displays ads in the News Feed, such as carousel, image, or video ads.
Sponsorship Model
The sponsorship app business model is one where you find a sponsor for your app. This is a great way to monetize your app if you have a large number of users, as you will be able to generate a significant amount of revenue from the sponsor. However, ensuring the sponsor is relevant to your app and that their branding is not intrusive is vital.
An example of an app that uses the sponsorship model is Runtastic. The app is sponsored by Adidas and users can see Adidas branding throughout the app.
Subscription Model
The subscription app business model is one where you charge users a monthly or annual fee to use your app. This is a great way to monetize your app, allowing you to generate recurring revenue from your users. However, in order to make this model work, you need to ensure that your app offers enough value to persuade users to subscribe.
An example of a subscription app is Netflix. Users can subscribe to the app for a monthly fee to gain access to all of the app’s content.
Affiliate Marketing Model
The affiliate marketing app business model is one where you promote products or services in your app and earn a commission on sales. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. However, to make this model work, you need to ensure that you are promoting products or services that are relevant to your app.
An example of an app that uses the affiliate marketing model is Amazon. The app promotes products on behalf of Amazon and users can purchase these products through the app.
e-Commerce Model
The e-commerce app business model is one where you sell products or services through your app. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. However, to make this model work, you need to ensure that you are selling products or services that are relevant to your app.
An example of an app that uses the e-commerce model is Etsy. Etsy allows users to buy and sell handmade products.
Paid App Model
The paid app business model is one where you charge users a one-time fee to download and use your app. This is a great way to monetize your app as it allows you to generate significant revenue from your users. However, to make this model work, you need to ensure that your app offers enough value to persuade users to pay for it.
An example of a paid app is Super Mario Run. The app costs $9.99 to download, and users can play the app without any in-app purchases.
Commission Model
The commissioned app business model is one where you create an app for a client who pays for your work. This is a great way to monetize your development skills, allowing you to generate revenue from your app development services. To make this model work, you must have the skills and experience to develop high-quality apps.
Selling User Data Model
The selling user data app business model is one where you sell your app’s user data to third parties. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. In order to make this model work, you need to ensure that your app has a large number of users and that you have the permission of your users to sell their data.
An example of an app that uses the selling user data model is Facebook. The app sells user data to third parties for advertising purposes.
Select the Right Business Model for Your App
There are many different app business models available to app developers. The best way to monetize your app depends on the type of app you have developed and the needs of your users. Consider all of the options available to you before deciding on the best way to monetize your app.