Online Distribution Options For Selling Software.
With the increasing popularity of bespoke applications online for computers/phones/etc., there has been a stream of different ways to distribute your software to the masses. Here is a quick guide to the two main options out there along with the pros and cons of each. Understanding the two business models has implications regarding security, control, and cost that either will or will not suit each individual software publisher.
Third Party Vendors/Distributors
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 business model, the creator of the software uploads their software to the distributor’s site for them to take control of promotion and sales of the product in return for a commission on each sale. Most iPhone application developers like this approach as they can leverage the Apple brand and sales pipeline. Developers of other software (e.g. for PCs/Macs/etc.) may wish to be less dependent on a single distributor and seek out multiple sales channels to spread the sales potential and reduce the risk of a single distributor failing to market/sell their product adequately.
The distributor also handles the shopping cart and payment processing which is one less headache for the software publisher. But the cost to the software publisher is that they have little control of their product’s marketing on the distributor’s website.
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 you have no access to the purchaser’s details; you cannot build up a membership listing of purchasers. As a result, you miss out on potential loyalty purchases. This could affect you if you intend publishing several software applications and therefore benefit from a listing of loyal customers.
Sales/Download Management & Distribution Tools
This involves installing a sales and download management application to your server to handle the shopping cart process, download link security, passwords and mailing list capture. There are many open source and commercial available on the web.
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.
To conclude
If you are developing applications for which you wish to tie in with the network effects of a large corporation (e.g. developing iPhone Apps) then leverage the third party vendor. You could try going it alone but you will be competing against the advertising and marketing strength of a huge organization.
If you sell software online and want to keep control of the product’s marketing and customer base data then setting up your own sales management and distribution solution will give you the control you seek.
If you only have one software application to sell, don’t wish to capture purchasers in a mailing list and want zero involvement in the set-up, marketing and sales of your software then using one of the many online vendors would be the option for you.
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