There are now quite a few people involved in marketing and developing mobile applications, whether as part of a company’s branding strategy, as a hobby, or as a fully functional business intended to generate passive income. The most common question amongst mobile app owners is: “How can I make money from my app?”
Over 5 million iOS games are downloaded per day in the US and Europe alone, which provides app owners with a massive opportunity to make money. However, not many people know that mobile apps are just like real estate – they have independent value. Therefore, if you own a mobile app, you can make a great deal of profit by selling it just as you would in the real estate market.
How much is your app worth? Applications don’t have set prices. Each individual app’s value depends on a number of different elements. A mansion overlooking the ocean does not carry the same value as a small one-story home. And just as different properties have different prices, apps also vary and fluctuate in value.
Which factors determine how much an app is worth? There are numerous factors that affect its price point. For example:
- Number of Downloads – An application’s primary strength and chart rating are determined by its total downloads. Total installs generally reflect the quality and virality of the application. The more often an app is downloaded, the higher its price. For example, this 9GAG bundle for Android was acquired on Apptopia for $25,000 as a result of the app’s traction. The free version sold when it had 855,000 total installs, which was a major reason for its high valuation.
- Monthly Revenue – As in any business, monthly revenue plays a key role in predicting the return potential of a purchase. However, some entrepreneurs and large companies seek out applications that have yet to prove themselves in terms of downloads and monthly revenue, because they’re seen as diamonds in the rough. Some believe that with a little investment and proper marketing, these applications could shoot up in value in the short term. Resident Slots is an iOS game that was acquired for $4,000, but was very appealing as a result of its one year-payback potential. Making over $500 per month, this app almost guaranteed it would pay for itself in less than one year!
- Number of Daily Active Users – The more daily traffic your app receives, the higher its value. It’s simple. The number of DAUs provide a clear indication of how attractive an app is today. The higher the number of active users, the higher the profit you’ll make on your app in most cases. An app that was recently acquired for $3,000, titled RPS combat, is a really unique take on Rock–Paper–Scissors and caught the attention of its buyer partially as a result of its strong active user base.
These factors are only skim the surface. These key basis points are compounded by many additional ones including app rank, revenue from ad-networks, an app’s current position on various charts (an app that makes Top 25 is worth a great deal of money), design, ratings, reviews, and much more.
In addition to the above examples, one should know that in order to sell your app, you must advertise your intent to sell so that potential buyers are aware of the investment opportunity. The methods used in advertising your app are also important and are comprised of many components – from presenting details in the sale’s description, to sharing it via social media and within app development forums. Where are potential acquirers hiding? Part of your job is to reach them.
If you wish to learn more about the potential benefits of acquiring an app, you can find additional information on our site, the world’s leading marketplace for locating, buying and selling mobile applications. Visitors to the site can view past acquisition details (over 100 transactions to date) in addition to viewing more than 530 apps currently for sale from other developers.
In both the real estate market and the market for apps, remember that the early bird makes the highest profit.