Software applications (a.k.a. apps) have become increasing popular with the proliferation of applications for smart phones. Parallel to this, an industry has grown up around the ways of distributing digital products. The following guide details the main options currently in widespread use. Each approach has benefits and constraints relating to security, control, and cost that will either suit or not suit software authors and publishers.
Third Party Vendors
This is the most widespread and familiar approach to most people as the prime example in today’s marketplace is Apple’s app store. It is also the model used for distributing other free/open software, shareware and other commercial digital products for PCs and Macs.
In this model, the software owner uploads their product to the distributor’s site. The distributor controls all sales and promotion of the product for a commission on each sale made. Developers of iPhone applications use this approach to benefit from Apple’s brand and sales channel. Developers of other software for PCs/Macs may wish to use several sales channels to increase their potential sales and diminish the risk of a distributor failing (going bust or failing to sell enough of their product).
The shopping cart/payment processing of these applications is completely taken care of by the vendor. On the downside, you have little or no control over the marketing of your product on their site (how the product looks/branding/etc.).
When customers purchase the software, the download link security is managed by the distributor. This entails controlling if the hyper-link for the software has a time limit or if there is a limit on the number of download attempts that can be made.
Given that the software creator has no access to the purchaser’s details they cannot build up a listing of customers for future reference. This could affect you if you plan to publish multiple applications and want to benefit from loyal customers.
Sales/Download Management And Distribution Software
This business model facilitates an independent approach to sales that will be preferable to many software owners. In this model, the software owner installs the application to handle sales and digital downloads on their own web server. This way, they can be in full command of their own shopping cart, download link security and customer data. There are many open source and commercial available that are already in widespread use. Historically, this approach came first on the Internet as software owners sold their products via their own sites. With time, third party distributors started forming online to promote and sell thousands of products from a central location.
The benefits to the software owner of this model is the chance to capture customer mailing list data combined with taking control of the marketing of their product online.
The cost of such an approach includes the ticket price on the sales software (though free open source versions are available, and widely used), the commission to the payment processor and the human resource cost of installing and administering the sales software.
In Summary
If you create applications (e.g. iPhone Apps) that can leverage the network effects of a large distributor or company then you should go with the 3rd party vendor model. You will have a smaller piece of a bigger pie!
If you wish to sell software online and retain control over marketing and customer data then installing your own sales management and distribution software solution will provide the benefits and control you seek.
If you have only a single application to sell and want no involvement in the sales and marketing of your digital product then using an online vendor/distributor would be the wisest option for you.
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