One of the questions we frequently get asked by clients is about app store fees. Namely, how to avoid paying the 30% commission that Apple and Google charge on revenue through their payment rails. This is especially relevant for native apps where a substantial portion of revenue could be at stake.
Understanding the Payment Guidelines
When it comes to listing your app on an app store, the first thing to keep in mind is that for most native apps, there’s no direct way to avoid these fees entirely. Apple’s and Google’s guidelines are fairly clear: if the service offered through your app enhances the in-app experience, they’re entitled to their 30% cut.
For example, apps like Uber or Airbnb, where the transaction happens outside the app (connecting passengers to drivers or hosts to guests), are typically exempt from this commission. On the other hand, apps that offer freemium models or subscriptions to unlock premium content or services (like media or streaming platforms) are subject to the 30% fee.
Exploring Gray Areas
However, there are gray areas in the guidelines, and with the right approach, you may find some flexibility. Take, for instance, a project we worked on with an exclusive clothing brand. We developed a subscription-based model, but the payments were structured as membership fees to the brand itself, rather than payments for specific app features. Because the service was technically a member benefit, we managed to avoid the commission on this expensive subscription model.
Tactics to Reduce or Circumvent App Store Fees
- Membership or External Service Models: Consider structuring payments as memberships or services that are offered outside the app’s core functionality. This method requires a clear, well-thought-out argument to explain how your app fits within these guidelines.
- Onboarding via Web: Another method to consider is handling user sign-ups and payments via your website, then directing users to log into the app after registration. This method requires stripping out the account management and sign-up flows from the app itself, but it’s a practical way to avoid paying Apple or Google on transactions initiated outside their platform.
- Test the Guidelines: Often, companies can succeed by submitting their app and seeing whether the guidelines are enforced in their particular case. Apple and Google tend not to retroactively penalize apps once they’re approved, so if you can make a compelling case for why your model doesn’t fall under the 30% commission rule, you may have some leeway.
When Paying the 30% Makes Sense
For early-stage products or companies with gradual user growth, it’s often more practical to just budget for the 30% fee in your business model. Many companies worry about these fees upfront, but in the early stages, revenue might not be significant enough to justify extensive efforts to circumvent them. Focus on product development and user acquisition first.
One simple solution is to factor the commission into your pricing—adjusting your subscription or in-app purchase prices by 30%—or absorb the cost and view it as the price of doing business on platforms that provide immense value.
App Store Fees: Consider the Cost of Doing Business
At the end of the day, Apple and Google have built significant infrastructure that provides value to millions of app developers and users alike. Their payment rails are part of this ecosystem, and in many cases, paying the 30% fee is a reasonable cost for access to their platforms. If you can find creative ways to minimize that fee, go for it. But sometimes, it’s best to simply account for it in your pricing and move forward, focusing your energy on building a great product.
But, with all of this said, if you have any questions, reach out to us—we’d love to help.
This post was written by David Barlev, CEO and Chief Product Strategist @ Goji Labs.
