Posted on May 22, 2012
How might you be asked to pay for a mobile app?
How will I be paying for this?
- There are several ways you can be paying for a mobile application. In-house development for complete property integration should cost anywhere between the price of $50,000 to $150,000 which usually means that considering a third-party develop will be much more affordable.
- Third parties will charge you in one of three ways: upfront onetime fee, subscription fees, or revenue share.
- Upfront Onetime Fee: Unless you’ve known the third-party developer inside and out then it is usually a good idea to avoid an upfront payment. The upfront fee will cost less than in-house development, but the quality management will be a more difficult process. This is common sense because a large upfront fee is a large liability for the company, and there is no backing out which is very risky.
- Subscription Fees: This method of payment is best for companies that expect large revenue generations from the app. Subscription fees are generally affordable, but they somewhat tie your company to the subscribed company which should be cautiously done. That said, the benefits of subscription as a service is that it allows your company to quickly enter the market place when competitors develop their own apps.
- Revenue Share: This method of payment is best for companies that have an extremely limited budget, and they believe that an app will generate revenue. This payment can be tricky though. Depending on how much revenue you are expected to generate will determine how much revenue share the third party will expect to see. The real problem with this is that, despite the affordability, the potential of the app might be limited. Most companies will provide limited services that focus strictly on direct revenue generation which can cut out the indirect long-term revenue generation of the app which is often developed through excellent service. When going for a revenue share, make sure that your company pays attention to the length of time that service will be provided as well as the app features which will focus on long-term revenue generation. In short, this app will be very limited in the services it provides.