When I first saw the title of this article, I had to read it: “7,000 app developers in 127 countries say e-commerce is now the best mobile monetization strategy.” Though my first attempt at mobile e-commerce had been a bust, it was time to develop an ecommerce app source code.
That Time When 5430 Clicks Earned Me $0
Back in the summer of 2012, I found a clever way to integrate an affiliate link for a mustache tie clip. Anytime a user added the tie clip mage to a photo, an icon with three dollar signs—$$$—popped up in the upper righthand corner of the screen.
After several months, the $$$ icon had generated 5430 clicks for TsaiClip.com. Why had none of these people bought a tie clip? I fired off a few emails to the makers of the Shopify plug-in called Zferral and learned that Zferral somehow dropped the cookies from affiliate links coming through mobile browsers. They had no way to track completed sales.
Follow-up emails asking for the rationale behind this backwards thinking went unanswered. Go figure.
The founder of TsaiClip.com told me he’d ask Shopify support to recommend a different plug-in, but I never heard back from him. And so the story goes with failed strategic partnerships….
Put a Mustache on It.
Several months later, I combed Amazon for cool mustache-themed products and made a list of Amazon Associates affiliate links. Why not add a shop of sorts in my Mustache Bash photo booth app?
People who liked the app could choose from a wide array of mustache paraphernalia. Throwing a “Mustache Bash” was in vogue at the time.
I soon found out, however, that Amazon wasn’t paying affiliate commissions on purchases made through mobile Safari.
$2750 Per App Per Month?!!
Then in April of this year, a friend sent me the Venture Beat article mentioned above, and I started research e-commerce apps.
We’re not talking about in-app purchases or paid downloads or stuffing your games with interstitials to make a few pennies per user. And we’re talking a totally different monetization model than freemium.
In its Developer Economics Q1 2014 report, VisionMobile shared some very interesting insights:
- Developers with e-commerce apps make, on average, $2,750 per app per month—the highest median revenue of any of the revenue models that VisionMobile tracks.
- As a revenue model, e-commerce sales grew from 5% in Q3 2013 to 8% in Q1 2014.
- Mobile sales soar year after year, and e-commerce has become a critical part of the app economy.
So what do these statistics mean for indie developers?
We’re leaving money on the table, that’s what.
The growth of app-enabled e-commerce (or m-commerce, as it’s sometimes called) signals a major shift. App developers aren’t just innovators. We can also be retailers now and resell other people’s stuff.
Amazon’s Mobile Associates API has thrown fuel on the fire. Developers can use their apps to sell physical goods and earn referral fees, a.k.a., affiliate commissions. In other words, the API gives developers easy access to a new revenue stream.
Hopefully, Apple and Google will soon follow suit, but in the meantime, we’re stupid if we don’t take advantage of this opportunity.
The Secret of the 8%
Huge freemium games like Clash of Clans and Candy Crush Saga generate profits that make our eyes pop out of our heads. What many of us indie devs forget is that these games (and the companies that own them) are outliers. They’re the uber-rich in the app social strata, the king lions of the app jungle.
Forget the game tycoons with jet money for a moment and ask yourself this question: “How do middle-class developers make bank?”
We shouldn’t stop swinging for the fences, but a reality check might actually open our eyes to other opportunities more lucrative than the rank-and-file game reskins of the last twenty-four months.
Currently, only 8% of app developers create e-commerce apps.
Yet VisionMobile’s report revealed that those 8% put up some impressive numbers: “The median revenues of organizations involved in e-commerce are $2,750 per app/month, by far the highest among all app revenue models that we track.” (source: http://www.developereconomics.com/reports/q1-2014/)
The Venture Beat article goes on to set up the contract between median monthly revenue per app for iOS in general—anywhere from $500 to $100—and the same on Google Play—$100 to $200.
Hold on a sec…
$2750 per app per month versus $100-$500 per month. If e-commerce blows most games out of the water, then why are only 8% of app developers are creating e-commerce apps?
We indie devs have to be careful about always doing what’s popular: turning apps into mobile billboards, chasing eCPMs, thinking only in terms of “users” and not real people with real needs, wants, and preferences, publishing games we ourselves don’t enjoy playing, spending thousands in an effort to produce a lottery ticket.
This ecommerce app source code isn’t sexy, but it can be VERY profitable.
Because if you’re sending traffic to Amazon and earning up to 6% of the purchase price for each product, then that 6% will end up being a lot higher per user than ad revenues.
Direct mobile commerce (m-commerce) isn’t all that exciting to me. For example, an app called Gyft allows users to buy and send giftcards. It’s a great idea, but it’s not something I’d be willing to stay up late and get up early to work on.
I’ve chosen to adapt an existing model popularized by internet marketers: niche websites.
The challenge with niche websites was good search engine optimization (SEO). Google could make one change to their search algorithm and POOF! All your traffic and your affiliate commissions disappeared overnight.
Now it’s really hard to get a new website to rank well for a lucrative keyword.
But you’ve probably noticed that Google indexes iTunes and Google Play pages for apps. And you’ve probably noticed that these pages usually appear in the top 5 positions for searches for related keywords.
Why not pick lucrative keyword and publish a niche e-commerce app whose iTunes and Google Play pages will show up at the top of Google search results?
Even if only a small percentage of people download the app, and only a small percentage of them click through an affiliate link and buy something, the potential revenues would make other revenue streams rather meager by comparison.
So here’s the secret recipe behind my ecommerce app source code:
- Pick a niche like dog training, knitting, gardening, or something other subject or hobby for which people have a lot of passion. My keyword was “travel hacking,” which has been a hobby of mine since late 2010. I like to fly for free!
- Use Google AdWords Keyword Planner to do a little keyword research and find lucrative keywords that have a high search volume: www.google.com/sktool/.
- Sign up for various affiliate programs, such as Clickbank, Commission Junction, e-junkie, and Amazon Associates.
- Find products related to your niche and make a list of affiliate links.
- Pay an oDesk writer $10/hour to create tips and tricks around those affiliate links.
- Publish a simple, tips-and-tricks app to test that niche.
- Wash, rinse, repeat.
Use simple tips-and-tricks content apps to test different niches. Once you find most profitable niches, you can both create more apps for that niche or create more sophisticated e-commerce apps to maximize revenues or both.
Allow me to introduce you to Travel Hacking.
I’ve already created an e-commerce app template. You can check out my Travel Hacking app here: http://appstore.com/travelhacking.
You’ll notice how simple the ecommerce app source code really is:
- Universal support for iPhone, iPod touch, and iPad
- Clean, iOS 7-inspired design
- Intuitive interface for easy navigation
- Big blue button for viewing more tips
- Smooth scrolling for reading longer tips
- Modern, sans-serif fonts
- Social sharing with Twitter, Facebook, and email
- iAd banner ads
- Upsight More Apps plug-in
- Remove Ads in-app purchase
- Multiple groups of tips (you could add more as in-app purchases)
- Favorites screen for saving good tips
- Info screen with more social sharing, as well as essential features like Review on App Store and Restore Purchases
Simple. Quick. Easy.
The most important part is the affiliate links embedded in some of the tips. When people tap the links, they’re taken to an online store or a website where they can buy a product related to travel hacking. Bingo.