Shoot for the moon 

Brad Younger lives in the northern beaches in Sydney, but he has dreams of travelling far from the Eastern Coast of Australia. What Brad really wants to do is get to space one day. It’s a big dream, but one that Flippa has helped Brad get a bit closer to reaching.

“I want to get to space, and Flippa’s helped me get there.”

Brad had always wanted to build something for himself, so when a friend put him in touch with an online retail manager looking for a way to manage orders, Brad jumped at the opportunity.

“This sort of married up, there was a need and there was a want, I had the skills to do it, so it all sort of fell together”, says Brad.

Now, Brad has built several apps, but there’s one in particular which Brad had a lot of success with. IDA Connect is an integration app for Ecommerce businesses, specifically targeting Ecommerce brands selling on The Iconic, one of Australia’s largest fashion and sports retailers. Acting as a middle-man, the app sends information between the marketplace and vendor to track inventory and orders.

It’s All in the Connection

Brad first came across Flippa in 2010. Back then, he had an information marketing site, his first ever website which he was using as a learning tool. It was around the same time that he heard of Flippa and remembers how easy it seemed to buy and sell online businesses.

But it wasn’t until Brad went to a Flippa Meetup event and connected with Ashwin, one of Flippa’s trusted Advisors. His conversation with Ashwin got Brad thinking about when would be the right time to exit his app business.

“I went to the Flippa meetup and met Ashwin, he was able to basically convince me that now is the right time to sell.”

And that’s exactly what happened. Brad listed his business on Flippa and sold it for $470,000. 

Selling at the Right Time

Brad didn’t know straight away when the right time to sell was, but after talking to Ashwin at the Sydney Meetup he started to consider what he wanted to focus his attention on.

“I decided to sell IDA Connect and then focus on my second app.”

But it wasn’t a smooth sale process. Brad a number of interested people, some of whom were financial investors, others operational investors, and took a couple of months to find the right buyer who would be capable and willing to operate the app.

“I started talking to a couple of operators and then the new owner came along and it was just a perfect match.”

Brad would never have found the right buyer if it wasn’t for Flippa. “I’d recommend Flippa because of the the reach they have in the marketplace.They brought in a lot of people looking to buy a business.”

“Flippa has changed my life by giving me the freedom and the money now to pursue other business ventures that I’ve always wanted to do.”

Inspired by this story? Read up on others who have successfully bought and sold their businesses here.

If you’re ready to sell, check out our First Time Seller’s Guide.

Like this buyer and seller, you too can master proper buyer and seller communications etiquette. We’ll show you how to that here.

How To Do App Due Diligence For A Potential Investment

Each app business is unique and has its own challenges when it comes to app due diligence. The sheer volume of stats, metrics and information can be overwhelming. But with an app due diligence framework you can become an expert at assessing a mobile app business before you buy.

Buying an app business differs from purchasing a traditional website or web app. Apps are listed on an “App Store” (Google Play, Apple App Store and Amazon Appstore). These app stores have their own guidelines and periodically review apps to ensure compliance. When buying a mobile app business keep in mind the App Store has final say on what can, and can’t, be included in the app.

With that in mind let’s delve into the key areas you need to assess as you embark on your new app entrepreneur pathway:

The Competition

The first step of any app due diligence process is to check the positioning on the app stores. Apps with higher ranked keywords can expect to see a continuous flow of new users without any ad spend. For this reason the search results are a competitive place for some app categories.

Start by searching for the app name then any descriptive terms users may use to find the app. Make note of other apps that appear in results — these are the competitors and will offer valuable insights.

Things to look for include:

• What features do competing apps include?
• What business model is used in the app category (subscriptions, in-app purchases)?
• How does the app differ in price from the competition?

Tools like appfigures.com can be used to check App Store positioning for any given keyword and provide examples of related keywords. The free account shows a limited number of results while the paid version offers added insights, download count (estimated), paid ad costs (estimated), category ranking, user ratings and more. Alternatively you can use the App Store search feature on your phone. Note: Results will vary depending on country and device (a search on an iPhone in Australia will show different results than results in the United Kingdom on an iPad).

Customer Acquisition, Retention & Feedback

The best app in the world is worthless if nobody is using it — 

The App Store is a saturated place. With thousands of new app updates being added every week. For this reason you’ll find users are spoiled for choice and rarely develop a sense of brand loyalty. Even the slightest inconvenience may result in the app being deleted. Getting users onto the app, and keeping them there, is a slow iterative process. Buying a mobile app business with established user acquisition channels is a great way to fast-track this journey —

There are main 4 types of user acquisition channels:

• Organic search (free)
• Sponsored App Store listings (paid)
• Social media (organic / paid)
• Referrals (shared by users or linked from websites)

Next we ask — What do users think of the app? 

Luckily for us the built-in App Store review feature has plenty of insight for the app due diligence process. Scour the user reviews for common feedback themes. Particularly focus on reviews with 3-4 stars. These are the users who have evaluated the app (perhaps over several days) and have taken the time to provide constructive feedback. You can quickly discover what’s working, what’s not and what’s missing through these user reviews.

Don’t discount an app just because it has bad reviews –

Bad reviews don’t always correlate to poor growth of an app. When looking through reviews be mindful that they’re generally skewed towards the negative (users are more likely to complain online than they are to praise an app).

Growing The App

Growing an app is the quickest way to recoup the cost of buying a mobile app business. The main areas for growth are: boosting user acquisition, improving business models and increasing retention. Getting these elements working harmoniously has a multiplying effect on mobile app business revenue.

Growth ideas include:

• Optimising for App Store Exposure
  By increasing search engine positioning the app will be seen by more potential customers and as a result downloaded more.
• Adding Paywalls / Subscription Models
  A paywall limits the user from accessing the app until they subscribe to a free trial. Adding a paywall can increase revenue by 10 times.
• Implementing Timed Notifications
  Android & iOS apps can have pre-programmed timed notifications. These are triggered at a specific time throughout the day. Adding a timed notification has the ability to increase user engagement.
• Making Shareable Moments
  Apps with shareable moments spread across the internet like wildfire. Users who are encouraged to share achievements, trophies and unique stats will happily do so. 

Operational Insights

It’s easy to think of an app as a standalone product that will generate a passive income. But this is sometimes not the case. Apps will require upkeep from time to time in the form of updates and new features. Some app categories will require more upkeep than others.

The most important part of the app itself is the code —

Understand that the programming language, framework and technology stack can all impact the cost to maintain the app’s code. It’s easier to find developers, freelancers and employees when you’re dealing with a programming language that is widely adopted. Apps written in obscure languages run the risk of requiring a re-write in the future. Languages commonly used include: Swift, Objective-C and Flutter.

Likewise the backend infrastructure suffers from a similar issue. Be sure to check that the app is using standardised backend systems like Amazon’s Web Services (AWS). Custom developed backend code may become a headache to scale and maintain in the future.

You should always ask the seller how much of their own time is being spent on maintaining and supporting the app. The seller will most likely be working on their app for free. Which means their time won’t be showing as an expense. Keep in mind you may need to hire a programmer if the seller is spending upwards of 50 hours a week maintaining the app.

Financial Due Diligence

The simplest way to gain insight into the financial details of an app is to ask the seller to add you as a user on their app developer accounts. Apple has App Store Connect while Google uses Google Play Console. You will need an account on each of these services to gain the required permissions.

Once you have access to the developer dashboards start looking for:

• Excessive refunds
• High churn rates (users who don’t renew)
• Download trends and revenue trends

If there’s a server involved (or additional infrastructure in the backend) it’s important to understand the operating costs of these items and what impact an increase in traffic would have on the bandwidth costs.

Then, ask yourself — Has the seller been upfront with advertising costs? 

It’s possible that download numbers can be inflated by paid ads and masked as organic downloads. The Google Play and App Store Connect dashboards don’t immediately make it obvious whether this is the case. But there’s a few things you can look out for:

• A large number of downloads from “Search Results” but poor keyword positioning could mean ads are running in the App Store
• A large number of third-party referrals could mean ads are running on social media or external sites

App Valuation Calculations

The app valuation is based on a range of factors which are unique to any particular app. To simplify the valuation we’ll be basing the value on annual revenue and multiply by a factor between 3 and 5 — known as the multiplier. This multiplier is a standard method to form a baseline valuation without factoring in risk, code complexity and associated advertising costs.

Calculating Valuation for Subscription Apps

Apps with a built-in subscription model are valued based on their Monthly Recurring Revenue (abbreviated to MRR). MRR is calculated by multiplying the total number of monthly subscribers by the average revenue per user (abbreviated to ARPU). 

For example an app with 500 subscribers paying $10 a month would have an MRR of $5,000 (500 x $10)

This would value the app at between $180,000 (with a multiplier of 3) and $300,000 (with a multiplier of 5)

(500 subscribers x $10/month x 12 months x multiplier)

Calculating Valuation for Other Apps

Meanwhile apps that generate revenue through upfront sales, once-off in-app purchases or advertising revenue are calculated based on more traditional business valuation models and usually attract a lower multiplier. 

For example an app with $1,500 of sales per month and ad revenue of $3,500 per month would be valued between $180,000 – $300,000 

(($1,500/month sales + $3,500/month ad revenue) x 12 months x multiplier)

Conclusion

Apps can be incredibly lucrative (check out this app portfolio that sold for $35M on Flippa), and as the app industry continues to grow, there will only be more opportunities out there for buyers (and sellers) of all sizes.

How much does it cost to build an app? When I first started my business, a friend of mine asked me this very question. At that time, I didn’t have a good answer because there are so many factors that can influence the cost of developing a mobile app. From the features and functionality included to the design and user experience, several things need to be taken into consideration when coming up with an estimate for an app development project.

Let’s explore some of these key considerations so that you can get a better understanding of what goes into calculating the cost of building an app.

How Much Does It Cost to Build an App?

The costs of creating mobile apps can vary greatly. A simple mobile app can be created for $80,000, while a more complex one could cost $250,000.

App development costs depend on the type of application you’re looking to build.

A single-function, non-database mobile app will cost between $80,000 and $100,000.

A multi-function, data-driven mobile application could cost between $100,000 and $150,000.

A mobile game, on the other hand, could range from $100,000 to $250,000+, depending on the quality, complexity, and number of features.

The amount of time it takes to create an app depends on the complexity of the app. Simple, single-function apps are completed in just a few weeks, while more complex, feature-rich applications can take several months.‍

How Much Does It Cost to Hire a Mobile App Developer?

If you are not a coder, you will need to hire a developer to build your app. This will increase the cost of bringing your app idea to fruition. The more developers you have working on the project, the higher the price will be.

Hiring a mobile app developer can be expensive, and it largely depends on the developer’s location. One factor that affects the cost is the country the developer is from. For example, hiring a mobile app developer in the United States is usually more expensive than hiring a mobile app developer in India.

If you want to build an app for less than $1,000 then your best option is to hire app developers in India. This will ensure you get a quality application without going over budget.

Building a simple app in the US can still cost a few grand. But it has to be simple and only do one or two things. You can prototype or launch an MVP for under $10,000.

When hiring an outside company for app development, make sure you consider all of the risks. While you may save money by going with a less expensive developer, you run the risk of compromising the quality of your product.

Working with overseas developers can be a bit tricky, as there can be a language barrier between you.

If you’re working with a developer who’s not local, it can be tough to stay on top of their progress and ensure they’re meeting deadlines.

Being able to have direct contact with the person you’re working with on a project makes everything go much more smoothly.

If the process of app development costs more than expected, the price may be adjusted.

The more time that goes into developing your app, the more money it’s going to cost.

The graphic displays how the pricing for different types of apps changes over time.

Now, let’s not forget about the costs involved with developing, testing, and optimizing your app.

Think about the time it would take to make an app and how many opportunities you would lose if you spent that time on something else.

A six-month delay in the development of your mobile app can cost you more than just money. Your competitors will have time to gain traction with your target audience, and you could miss out on valuable opportunities.

Six months is a long time for competitors to swoop in and steal your spot in the App Store.

If you want to launch an app quickly, you need to understand the mobile app development process and what you can do to keep development costs and time down.

What complexities increase the cost of app development?

The complexity of an app determines how much it will cost to build. A simple app with few features will cost less than a complex one, which may have many functions, a database, or an API.

Enterprise or multi-feature applications are also more expensive as they need a bespoke design and a lot of complex code.

Finally, games, which need high-quality graphics and gameplay, are very expensive to create.

Some other features that may affect the cost of developing mobile applications include email login, geolocation tracking, and push notifications. These features can add to the complexity of the app and therefore increase the development time and cost.

Below is a list of examples and their corresponding prices.

The costs of adding features like social media integration and user profiling to an app can range anywhere from $3000 to $15000. More advanced features such as geolocation can cost upwards of $7500.

App Development Cost Benchmarks

The cost of developing apps for iOS versus Android has varied significantly over the years.

As of 2022, the mobile app development prices for Android and iOS apps are nearly identical, based on research done by various app developing firms. The factors that determine the development cost of an app are its complexity, which is defined as simple, medium, or complex.

The development time for an app typically depends on its complexity. A simple app can take 2-4 months, a mid-complexity app 4-6 months, and a complex app 9 months or more.

These estimates are based on the quality of coordination and productivity of the app development team members. The actual timeline for developing an app may vary depending on these factors.

How Much Does It Cost to Develop an App in the US?

According to current hourly rates for app development, a basic app with a simple user interface and set of features would cost between $16,000 and $32,000. A medium complexity app would fall between $32,000 and $48,000, while a complex app would require an investment of at least $72,000.

Again, these numbers are just a guideline, and the actual amount of time it takes to develop an app depends on several factors.

These calculators are meant to give you an idea of how much your app would cost to develop.

These numbers don’t include the costs associated with updating an app, which is necessary as apps grow and evolve. These app costs can vary greatly based on the type of the app and the significance of an update.

App Pricing Models

Developers usually provide an estimate of the work that needs to be done or charge by the hour on a pay-as-you-go model.

The fixed-price model is our preferred pricing model. We put together a quote based on your concept and will only deviate if the project’s requirements change. This makes it easy for you to budget for your app and ensures that there are no unpleasant financial shocks.

We bill weekly or monthly, depending on the project. The actual time it takes to complete the work, however, varies.

This option is great for projects where the scope and requirements aren’t entirely clear. That way, we can create a custom solution that perfectly meets your needs.

How to Estimate App Development Costs

We start by understanding the features of the app. This gives us an idea of how complex it is and allows us to estimate how many resources it will take to build it. This represents the bulk of the cost of building an app.

There are three reasons why an app may cost more than originally quoted.

The main reason that app development costs more than expected is that the scope of a project can increase as the development process progresses. This is typically due to dishonest developers giving you a low price estimate to get your business, then tacking on extra charges for each additional feature.

The entrepreneur begins to build the product and as they work on it, they share it with friends. This feedback helps the founder improve the product and makes it more useful.

One of the best things about app development is that you are constantly coming up with new ideas and ways to improve your product. However, this can also be one of the most challenging aspects of the job, as it can be difficult to know when to stop tinkering and call your app finished.

If during a project, you decide that you want to add or subtract some feature, you have a few options. You can swap them out for other features, pay us to add them, or remove them entirely.

4 Ways to Build a Mobile App

While a cheaper, simpler, and easier-to-develop MVP may be good for app development, you should be careful when choosing an app development partner. A cheap, simple, and easy-to-develop solution may end up costing more in the long run.

While cheaper isn’t always the best option, sometimes it’s necessary.

There are several options for building apps, each with pros and cons.

1. Offshore firms

Hiring an offshore team is the cheapest option because they typically charge less than US or UK workers.

Although the price may be low, there is a risk of receiving poor-quality work.

You rarely see the people who will be working on your app, and these firms often have very little in their portfolios, as the apps that have made millions are often very different from the approach these agencies take.

What you’ll get is the app development team. What you won’t get are all the other roles that come with a full-fledged team.

2. Freelancers

Hiring a freelance developer from an online freelancing website is one of the best ways to get quality work without dealing with offshore firms.

Hiring a good developer is not inexpensive, but their work will be much faster and of higher quality than if you hired someone less experienced.

3. Technical co-founder

If you’re already a successful businessperson, having a technical co-founder is a great way to attract top talent and have them join your team.

These guys get approached by a lot of “ideas” people who usually offer something like “I don’t really know anything about this but I just had an idea for a new social media site. I will pay you 5% of the profits that this project makes.”

Technical co-founders are also a good bet if you’re looking for a high-quality product. Cofounders can be incredible assets, but they can also be a liability.

4. Established app development company

If you’re looking for the most expensive option, app development companies are it. However, you’re also almost guaranteed to end up with a great product if you go this route.

Some development firms have a successful track record of developing and launching popular applications. They can provide your team with experience, resources, and a proven process.

Some app developers may know how to sell, but don’t have a solid track record of delivering.

The company’s positive reputation, great reviews, and a long list of accolades speak for themselves. Talk to past clients and meet the staff to get a feel for their culture.

See how much they care about your business. It’s an important choice, so you shouldn’t just hire the first web developer you come across.

Product Comes First

While it’s true that how much you’re willing to spend on your product is important, it’s more important that you focus on building a great product.

In less than 12 months, Facebook bought Instagram for one billion. They paid about $250,000 to build the prototype.

No matter the cost, whether it was $50,000 or $500,000, it is insignificant when compared to the exit value.

Your product must be of the highest quality possible. You can save money by skimping on quality, but what’s the point if it means that you’re selling an inferior product? It’s always better to invest in a higher quality product or service.

Basically, yes, money is important, but the product is more important.

The Real Cost of Design

It’s not just what it looks like and feels like. Design is how it works.

Design isn’t just about making things look good; it’s about making them work well too. Too often, people think of design as simply a matter of aesthetics, when in reality it’s so much more than that. Good design takes into account function and form to create something that’s both beautiful and effective.

Your app’s design is just as important, if not more important than its technical features. It’s what your users interact with, so it must be well designed.

It’s what convinces people to download and use your application. A good user interface is key to keeping customers coming back.

Design is key to solving the user’s problem. A well-designed app can be profitable, while a poorly designed app will likely fail. Therefore, it is important to put as much effort into the design of your app as you do the technical aspects of development.

Don’t Forget the Marketing

“If you build it, they will come” does not work for apps.

While this phrase gained popularity during the dot-com bubble, it is a fallacy.

Even if you have a great app, it still needs marketing.

In fact, the majority of apps don’t make enough money to cover their development costs.

About 12% of app developers make over $50,000 in annual revenue from the App Store. The overwhelming majority of revenue goes to the top 1% of app publishers.

The main difference between the money makers and their money-losing counterparts is that the former spends more on marketing than the latter. They also spend more time on marketing and sales than their counterparts.

In the app world, you need a lot of people to download your app in a short amount of time to make it into the top 100 lists. Almost always, paid advertising is necessary to accomplish this.

Don’t expect to just toss money at Facebook ads. You’ll end up wasting most of it.

Finding the best business model for an app that delivers a good return on investment is a science.

Start testing out which channel works best for you.

If you’re going to release an app, make sure you have a lot of people waiting to download it.

It takes a lot of time and money to grow your user base.

Finding out the best model for your business can be very expensive, ranging from $35,000 to much higher. No matter what, though, you should still set aside funds for your marketing and sales activities.

Making money off an app requires more than just sales and marketing. You’ll also need to factor in the App Store and Google Play Store fees and the cost of servers, back-end support, and development, customer service, accounting, legal, office, and app maintenance.

App Development Influential Factors

App development cost is significantly influenced by the app functionality and purpose, mobile platforms and devices supported, integration points, use of visual objects, use of smartphone hardware features, and maintenance plan.

However, there are some common or standard metrics for app development projects that we can apply across various types of applications.

These benchmark ranges are quite broad, based on the data of multiple companies that researched their average mobile app development cost by surveying their customers.

Conclusion

How much does it cost to build an app? As you can see, many factors can influence the cost of developing mobile applications. From the features and functionality to the design and user experience, each element needs to be carefully considered when coming up with an estimate for an app development project. By taking all of these factors into account, you can get a better understanding of what goes into calculating the cost of building an app.

Just think of all the time we spend on our phones every day. According to recent studies, the average person spends over four hours on their phone each day. That adds up to 28 hours per week or two full days! So it only makes sense that investing in the App business could be a profitable business venture.

But where do you start? How do you find the right app business and what should you look for before making a purchase? This guide will show you how to buy an app and also answer all those questions and more so that you can get started on your path to becoming a successful app owner today!

Why Invest in an App Business

If you can’t afford to purchase an app, you can always invest in it. But with thousands of new mobile apps coming out every day, it’s tough to find the rising stars!

When considering investing in an app, it is important to do thorough research to find potential rising stars. Checking metrics such as download data, app store optimization data and reviews can be helpful in this process. By taking the time to invest properly, you increase your chances of seeing a return on your investment.

How to Find Competitive Apps

Now it’s time to do a competitor analysis. Take a look at what apps in the same space are doing.

When you are looking to invest in a new mobile app, it’s critical to do a competitor analysis. This will tell you if the competition is fierce or if you can compete.

Estimated Downloads

To figure out which apps are most popular, use our market intelligence tool for estimated download numbers.

This will give you a good idea of how popular the apps are in your category, store, and country.

Search through the available apps by category, country, and store.

Now you can compare the estimated download numbers of other apps similar to yours to see how they stack up. This can help you see how your app compares to others on the market.

Visibility Score

Another way to estimate the competitiveness of an app is by using ASO Intelligence. Here, you’ll be able to track the Visibility Scores of your competitors.

The Visibility Score is a measure of how competitive your app is for a given set of search terms. This metric takes into consideration many factors, such as your ranking on the charts, as well as the number of apps competing for the same terms.

If the Visibility Score for an app is low, this indicates that there’s less competition. This makes sense, as there’d be more room for newcomers in a niche where there’re few competitors.

Spotting Clones

When looking into certain categories of apps, you should be on the lookout for numerous clones. If there are many similar apps in the market, it may not be the best place to buy an app.

It’s important to keep tabs on your competition, as it’s a great way to stay in the loop of what’s going on in the mobile app industry.

This will ensure you’re always on top of app market news.

User Reviews

If you want to be successful, it’s important to research your target apps and what users think of them. What are their thoughts on the app’s features? This will give you a good idea of what needs to be improved.

When researching competitors, it can be helpful to find out what features are missing from other apps. Also, understanding what people love about a particular competitor’s product can highlight areas of strength for your product. Finally, looking at overall user satisfaction can indicate if your app needs improvement.

Category Rankings

Find out how your target app ranks against competitors. This is easy to do with our App Ranking Charts.

You can track the ranking of your app in multiple app stores, allowing you to see how it’s doing.

An app’s sudden rise in the rankings in app stores could be the result of publisher manipulation. This could mean the app is being sold at a higher value than it should be.

Apps that have a history of performing well are reliable.

Tips on How to Buy an App

Before you negotiate with a publisher, you’ll want to go into it having a lot more information than “the app looks cool and has a pretty logo.”

We’ll show you how to look at the most important things so that you can get a better idea of what you should pay for an app.

Remember that we are app developers and app marketers, not lawyers. This is not meant to be legal advice.

Before you start acquiring apps, there are some basic things you should check off your list. Consult with a licensed lawyer or tax advisor if you have any questions about the acquisition process.

Who Should Buy App Businesses?

If you’re an app entrepreneur, then you’re constantly thinking about the next update or feature for your application. You want to make sure that your service is as top-notch as possible, and that it’s presented in an attractive, easy-to-use manner.

App development requires a few skills such as ASO, but the basic business model is not so different from other businesses.

Some app developers make money in the same way websites do by using ad networks. This is similar to putting AdSense on your website.

Just like with websites, there are tons of new tools out there for tracking mobile app usage. These tools include rankings, keywords, and user analytics.

But, you should also be aware of the fact that new revenue sources can sometimes come at the cost of algorithmic and manual penalties that can kill a business.

If you are someone looking for new opportunities to make money, creating apps could be a good investment.

If you’re already knowledgeable about app development and investments, then you’ll likely be able to easily run your own successful mobile app company. However, you may need to learn how to hire a developer to fix and update the app, but the overall process should be relatively simple.

If you’re new to the game, buying an app that’s already generating income could be a great way to get your foot in the door. Most apps don’t require much upkeep once they’re up and running, so you can focus your efforts on marketing and getting more users.

This lets you focus on marketing the app to get as many users and installs as possible.

If you’re looking to start a business quickly, buying a ready-made mobile app is a great way to go. Not only will it save you a lot of time and effort in developing your own, but you’ll also benefit from a proven business plan. This will put you way ahead of the competition, which is still developing its apps.

To run a successful app business, you need to be creative, have strong marketing skills, and understand the latest trends in technology.

What Does Running an App Business Look Like?

Running an app business is similar to other online businesses in that there are only a few differences.

An app business typically involves solving customer problems, ranking high organically in search engines, marketing the app in different channels such as Facebook, and optimizing the app for conversions.

The process of buying and selling apps is still in its early stages, even though it is a relatively new concept.

In 2013, Apple allowed app developers to start selling their apps to other people and businesses.

Running an app business is similar to running a Software as a Service (SaaS) business.

The app doesn’t require a lot of upkeep once it is up and running.

An app is a one-time task, whereas a content niche site requires adding new content and doing SEO.

Your main mission should be to market the app and bring in a good income. You can do this by buying an app that is already producing a good amount of money, or by making updates to the app that will make it more user-friendly.

If you’re not technically inclined, then you’ll need to hire a developer to make these updates for you.

If you’re looking to keep your app business running smoothly, it’s best to use the same developer that originally built the app. This way, they’ll have a much better understanding of how the app works and can make any necessary updates more easily.

Updates are an important part of app development, but the main focus should be on growing the user base.

Buying an App Business: Profit vs Risk

In 2014, people spent $946,788 every day on in-app purchases in Candy Crush. While revenues have decreased in 2016, the game still generates $418,116 in daily sales.

Many people think that because only 1 percent of apps generate revenue, app development is not worth it. However, this statistic is not too different from the percentage of websites that generate income. Therefore, the potential for earning money through apps is still there.

The question of whether a niche website or an app is riskier depends on how well they can attract and keep customers.

In recent years, mobile app gaming has seen a sharp increase in popularity, contributing to the growth of the gaming market as a whole.

Zynga’s recent IPO has made the company more valuable than Electronic Arts in revenue. This is due to the success of games like Farmville which has generated a lot of income for Zynga. While some may see this as a risky move, it could pay off big time for the company if they continue to produce popular games.

The market for apps is lucrative, and a lot of people are making money off of it.

If you are an experienced buyer of online stores, you may be wondering if buying an app is any different. The truth is that apps and websites are quite similar in terms of monetizing them.

While both websites and apps are there to satisfy their users, they each go about it in different ways. Apps rely more on developers and content creators, while websites are more reliant on the written copy.

An app’s business model is similar to a website’s in that both need to solve problems to be successful. Angry Birds and Candy Crush provide entertainment, while Uber and Lyft provide revolutionized transport services.

While apps and websites are both sources of traffic and revenue, they’re quite similar. They both rely on the same kinds of ads, and both offer the same types of monetization options.

Many people are surprised to find that the design and function of apps are very similar to websites. This is especially true when it comes to search engine optimization (SEO).

Conclusion

If you want to know how to buy an app, there are a few things you need to keep in mind. First, find an app that fits your needs and interests. There are millions of apps out there, so take your time and find one that’s right for you.

Second, understand the risks involved in buying an app business. Not all businesses are profitable, so do your research before making any decisions.

Finally, don’t be afraid to ask questions! The more you know about the process, the easier it will be to make a successful purchase.

Overview of the App Industry

It’s been 15 years since the iPhone was released and the impact of mobile on our lives is immense. It’s a big industry. They say content is king and this is particularly true in the app universe. We consume more content on mobile than ever before, with people dedicating a third of their waking time to apps. 

According to a new report from Data.ai, we’re on track from a record quarter. We collectively installed 37 billion apps and consumer spend is on target for a record $33 Billion for Q2 2022. It’s the iPhone (or iOS platform) that still reigns supreme. Despite fewer downloads, iOS represented nearly $1.80 for every $1 spent on Android.

As you would expect, big tech names and brands dominate. According to SensorTower.com, 80% of all new installs are from just 1% of app publishers. But, for independent and smaller publishers don’t let the stats diminish your excitement, there’s still material upside with apps in the Top 200 earning on average $82,500 daily, and those in the Top 800, earning on average $3500 daily or $1.27M annually.

A look at Flippa’s cohort, the 1230 app publishers who utilized our intelligent valuations engine to value an app, revealed that the average app publisher earned $243,107 annually. As a category and business model, it’s a good money maker for digital entrepreneurs.

With such a burgeoning industry comes a rise in M&A. There’s been a rise in acquisition funds, aggregators and roll-ups specifically looking for app deals. At Flippa, we think it might be the next land grab. In the first half ‘22, Flippa has seen 54 companies register acquisition intent for apps, with a collective acquisition budget in excess of $330MM. 

In other words it pays to be in apps. Not only can you earn a good income, you can be confident of building toward an exit.

In this article, we take a look at the app ecosystem, explore the most popular categories, talk through app valuations and reveal what buyers are looking for. 

Ecosystem Insights & The Most Popular Categories

There are two ecosystems at play: Android and iOS. Android was first launched in 2008 by Google, and the first version of iOS, owned by Apple, was launched in 2007.

According to key mobile app statistics from buildfire, there are 2.87 million apps available for download on the Google Play Store and 1.96 million apps available for download in the Apple Store.

And, the latest report from Data.ai states that the industry has kept pace with the ‘lockdown-fuelled boom’. The report (available for download here) documents the latest in growth trends but also lifts the lid on consumer habits. As you would expect, games, entertainment and social dominate spend but if you’re looking to invest in growth areas, “the biggest quarter-over-quarter gains were in Comics, Books & Reference and Dating with increases of 46%, 37% and 35% respectively”.

As mentioned, gaming is still the dominant category and we expect this to continue. With 5G leading to higher resolution and faster performance, and the next 4 billion consumers coming online, expect there to be massive gaming adoption.

This is reflected in acquisitions also. When looking at apps sold on Flippa, nearly 70% of all apps sold have been in the gaming space.

The health and fitness industry also experienced a massive shift during the past few years as the world migrated to digital platforms for everything, including the daily yoga class. Two years later though, health and fitness apps are still capitalizing. According to Vantage Market Fitness, the Global Fitness App market is valued at USD 5.1 Billion in 2021 and is projected to attain a value of USD 15.2 Billion by 2028 at a CAGR of 17.6% during the forecast period 2022-28.

Based on the top fitness apps in the market, revenue increased by 84% in 2020.

What does an app publisher look like?

Flippa recently surveyed over 150 app publishers active on the Flippa platform. Here’s what they look like:

They own and operate multiple apps: 

1. 33% operate Android apps
2. 41% operate iOS apps
3. 26% operate both iOS and Android apps

The often operate more than one app:

1. 33% operate just one app
2. 25% operate between 2-5 apps
3. 16% operate between 6-10 apps
4. 25% operate 10+ apps

In app advertising is the most popular way to make money:

1. 54% earn revenue from in app advertising
2. 29% earn revenue from in app purchases
3. 17% earn revenue as paid apps

As mentioned, it’s the diversity that makes this ecosystem so unique. At last count, there were 88 apps for sale on Flippa, from VPN apps, unique video editing tools and games. The apps currently range in value from just $5,000 to $1.5M and we routinely see apps priced up to $35M and beyond. Only recently, a Singapore based $35MM app portfolio was purchased by an international app publisher. The portfolio was generating $12MM of revenue and growing at ~30% annually with the purchase price including upside payments.

For a look at the latest apps for sale click here. You can create an alert for all apps using the ‘Create Alert’ function. 

What buyers are looking for in an app

With the rise of app usage, the M&A market for apps is hotter than ever, from the small to the mega. This trend can be illustrated, for example, by the acquisition of the popular online puzzle game Wordle. It was bought by the New York Times in the low seven figures. Growth through acquisition is a well trodden path but even more so in digital and now with apps. It’s all a matter of increasing overall digital subscriptions and intriguingly the New York Times Games department is a high performing unit within NYT digital.

Similar trends can be seen on Flippa’s marketplace, as apps capitalize on these macro trends. Recent examples include Daily Word Search Puzzle, sold for $140,000, All Stays, a popular travel app, which sold for $4MM, and the aforementioned $35MM portfolio which provided small business owners with key utilities including logo design.

In main street deals (<500k to 2M annual revenue) and the lower middle market (2M to 50M annual revenue) we expect app valuations to increase. This is despite tech valuations falling dramatically in the first half of 2022.

Flippa CEO, Blake Hutchison, says the M&A market is responding to opportunity. “Mobile apps are expected to generate nearly $100BN in revenue by 2023, so it’s no wonder that consolidators and aggregators are sniffing out deals. Multiples are still low as it’s an under-appreciated asset type but competition is increasing – it’s going to get hot.”

App valuations depend on multiple factors. Buyers will consider revenue and underlying profit, daily active usage, category and growth. The below valuations are indicative but right now, growing apps with consistent daily active usage, will trade for the following multiples:

1. Sub >500,000 Annual Revenue: 1.2 – 1.8x Revenue Multiple
2. $500,000 to $2MM Annual Revenue: 1.8x – 2.5x Revenue Multiple
3. $2MM+: Up to 4x Revenue Multiple

For an accurate valuation, check out Flippa’s Online Business and App Valuations tool which takes into consideration historical sales data and existing buyer intent data. 

What makes an app acquirable? 

Financial Performance

When purchasing an app or a portfolio of apps, buyers are looking for financial health and profitability. An app with a consistent, steady income indicates that it is ahead of the competition and has surpassed the “difficult” part of building an app from the ground up.

Buyers generally stay away from newly-launched apps, as most apps gain their peak downloads in the beginning. Buyers need to understand the long term viability of the app. After all, studies show that an average app’s usage retention drops to just 9% after 3 months, even if it still remains installed on a device.

“The fundamentals are the same in app acquisitions as they are in other deal types,” says Blake. “Buyers are looking for proven financial performance typically assessing growth and looking for a CAGR in excess of 15%. Buyers will also look to understand future opportunities by assessing core operations and marketability of the app.”

Critically for apps it is also about Daily Active Users (DAU’s). There’s little value in an app with millions of downloads but very little repeat usage.

In a highly competitive industry, buyers are looking for full financial data in order to move quickly. Quick and complete responses to due diligence requests are essential, as any delays in response can impact deal confidence, leading the buyer to move on to other hot prospects.“If a publisher wants to sell an app, they need to be organized and ready to move,’’ says Tom Kennedy, Co-founder of Loyal Foundry, an acquirer and publisher in the mobile apps industry. “If apps are listed at 10 times revenue for example, we won’t even engage as it’s too hard to find the right price that works for both parties.”

Reviews and Reputation Management

Buyers will pay a premium for an app with an outstanding review history. Critically though, a prospective buyer will also look at the recency of the reviews.

Build a plan to collect reviews, celebrate your best reviews and take on any feedback where there’s negativity around the app or requests for increased functionality.

Uniqueness

It’s a saturated industry. You are either a market leader in a highly competitive landscape or you have developed something unique.

Although quite a small app, one of the best examples we have seen here at Flippa, is Untitled. It’s a screenwriting app developed by a screenwriter. It reached the Top 10 in the paid productivity section of the app store and given its utility – screenwriting – it had an awesome 11m 10s average session duration. It sold quickly! 

– – 

No doubt you agree. It’s a thriving industry. With mobile apps set to represent $100BN in revenue, we expect that the M&A market will heat up. Our prediction is that in 2023 there will be around $150MM in app acquisitions on Flippa. Will you be one of them?Get a valuation for your app by visiting our app business valuation tool here.

It is little wonder then that so many tech-savvy individuals attempt to develop and sell apps to make it big. And given mobile phone usage continues to rise, now is the perfect time to make your move.

With the potential of such lucrative results on offer, thousands of like-minded would-be entrepreneurs hope to develop the next big thing, and tech juggernauts such as Google and Apple are looking to buy apps and turn them into global hits. 

And while the opportunity is always there to make considerable gains with the correct marketing strategy, dogged determination, and a little bit of luck, the ultimate reward for the amount of time and effort put into the app may not always correlate. Indeed, a report from App Annie found that of the 21 million apps published, only 233 made more than $100 million in 2021.  

If you’re looking to get started, you need to understand the steps and strategies that will help turn your app idea into a source of revenue.

Search Apps For Sale On Flippa

Key takeaways:

• Considerations to make when developing an idea for an app.
• Outline the steps required when building your apps.
• Generate revenue and reputation for your app.
• Why you shouldn’t contact Apple, Google, or Facebook?
• Strategies that will help you to sell an app.

How to formulate an app idea?

The American chemist and Nobel Peace Prize recipient Dr. Linus Pauling once stated that “the best way to have good ideas is to have lots of ideas.”

You might be one of those people that wakes up in the middle of the night with thoughts racing through their heads. You may believe your business concept is “the next big thing.”  After all, every app started as a notion. So how, then, do you determine if your “good idea” will create revenue?

Source: Credencys

Does your idea solve a problem?

Take a look at technological success stories, and you will see that almost all of them have one thing in common; they solve an issue or make the user’s life easier. For example, Spotify brought the worlds of music streaming and record labels together, and Netflix changed the rules regarding access to movies and TV shows. 

When considering your idea for an app, if it solves nothing, it may be classified as a quirky novelty with no real-world value. Although this type of app may still sell (no one can predict what will take the market), there are far more practical, proven strategies.

Start by considering the issues you face in your own life. Are there times when you are consistently bothered by something where you’ve wished there was an app that could eliminate the problem?

If it’s an issue that bothers you, then there is a high chance it will bother thousands of other people. So this should be a critical early consideration of the development process when designing an app from scratch.

Is there a gap in the market for my app?

Before diving head-first into an idea, you need to understand your intended market. Market research is a vital early step for any business enterprise, and mobile apps are no different. 

The mobile app market is unpredictable, and so without this aspect of your due diligence, you’re unlikely to get anywhere. With the sheer number of apps available, the chances of your app standing alone with no competitors are slim.

You can start by checking out the various app stores to see if there is already a similar app. Next, find successful apps in your target market and examine how they got to their position and what they’re doing well. Finally, gauge the market size to determine whether there will be room at the table for your app.

It isn’t just your competition you will need to be aware of. Customers are the lifeline of any business, so you must evaluate precisely where they are and what they are buying. Google Trends and Google Keyword are free tools to determine potential interest levels for your app. 

How do I craft an app proposal?

You are now in a position where you have reduced your many app concepts to a single one with real-world value and practicality that can fill a market gap. Now you must flesh out the idea.

Now you must decide what will differentiate your app as this is what your selling point will be. You should have a clear grasp of your app and the problems it can solve. You’ll be aware of your competitors and what they have to offer.

A minimum viable product (MVP) should form part of this app development process. An MVP, concerning mobile and web apps, is where the designer identifies the key features and functions of the app that they will need to develop. An MVP can often save vital time and money when used with user feedback to finetune what people will want from the app.

Source: Net Solutions

The more detailed your business plan is at this stage, the better chance you will have when it comes to selling your app idea and vision to app developers and potential investors. You should ideally know the potential scope of the app, the target audience, the cost to build the app and product engineering, and the timescales involved in growing your app.  

How to build your idea into an app?

You have your idea. You have conducted the necessary market research into your competitors and your customers. You know what will set your app apart from the competition, and you have a clear business concept of your vision. What do you need to do next to build an app?

How do I put together a development team?

Unless you have spent many hours learning how to code, market, and sell, you will almost certainly need to build a dedicated team to help you at this stage. Very few businesses can take off under the guidance of a single founder, as most people do not have the vast breadth of skills to pull it off.

Coders and developers

These are the people who will write the source code that will turn your idea into a functioning product. Though most apps appear straightforward, many will have hours of nuanced code running in the background. Your coders will build the app and fix any subsequent bugs discovered during initial feedback and playtests.

You may wish to explore three main avenues when finding your ideal development partner:

• Freelancers: These are independent contractors who work for themselves, often found on Freelancer and Upwork. They will set their rates and schedules. Some freelancers may not have professional experience with a company and may not have gone through rigorous hiring, so the range of quality may be substantial.
• App development company: These companies will often offer services separate from the coding itself. They will provide consulting and project management services to aid with the process. As a result, they are often more expensive than freelancers.
• Programmers: A mix of the previous two, programmers often work for companies but will have a high level of control over the projects they take on. They will usually charge considerably more than freelancers.

Designers

Coders and developers are experts at creating the technical basis for an app. However, they might not be as skilled in app design, and instead, specialize in a particular area, for example, eCommerce design.

If you also lack that creative flair, you may wish to bring a designer on board. You can use many freelance databases to find your ideal designer, including Dribbble, a go-to stop for designers and creatives. 

Source: Space-O Technologies

A reputable designer will frequently have a portfolio of previous client work that prospective partners can review to see whether their design preferences are compatible. Usually they will offer client testimonials as additional proof of their competence and skills. They may also have a blog page or website with posts detailing their process and knowledge.

Investors

No matter how incredible an idea is, it won’t get off the page without money to pay for your coders and designers and ongoing development costs. This is when the investors and the raising of capital enter the picture.

There are several ways to reach investors and raise capital for your app:

• Startup platforms.
• Business angels networks. 
• Crowdfunding.
• Business incubators.
• Professional social networks and individuals.
• Private equity markets.
• Bank loans.

Most investors will expect to see a detailed proposal and proof of concept before considering coming on board.

Protecting your idea

A vital consideration you will need to make when you bring in additional people to work on your app is how you go about protecting your intellectual property. It is also prudent to put steps before any significant app development.

You can protect any information and data for your app by having all relevant parties sign a Non Disclosure Agreement (NDA). It is a way to ensure all information remains legally confidential. You must protect your intellectual property rights across all aspects of the app’s construction. 

For example, a developer has the right to their coding and can use it for an iteration of your app idea if it is not made explicitly clear that all content, designs, and code developed for the project are your intellectual property. This should take the form of a legally binding contract, which you can draft yourself or obtain through a business solicitor.

How to market your mobile app?

You have now thoroughly tested your app. It looks great, and you have been able to secure the initial funding needed to bring the app to life. Now it’s time to get it in front of the people who will most likely use your app and recommend it to others. 

This opening phase of marketing and building an audience is essential if you wish to sell the app to the likes of Google Play and the iOS App Store. The following are key app marketing strategies you may want to implement before and after your app launches.

Before the launch

Business owners can often generate considerable interest in a product or service even before the project fully comes to fruition. So while your developer team is hard at work putting together the codes and designs for the app, you can take several easy steps to drum up interest within your potential market base:

• Build an app landing page: Landing pages are not the same as websites. They are standalone pages found at the end of a link that contains all the critical information about your app and what the visitor has to look forward to. You can use landing page creation sites such as Unbounce to develop this valuable marketing tool.
• Build an email list: As part of your landing page, you should create a call to action to encourage visitors to register their email addresses so that they will be notified when the app launches. This should give your app some traction from day one.
• App Store Optimization (ASO): App Store apps are ranked by their ASO score. You can boost your ASO score through strategies such as keyword optimization within your metadata, app conversion rates, and App Store creatives such as preview videos and engaging screenshots.
• Include a media kit: Journalists and social media influencers can have a great deal of sway when driving traffic to your app. You can make things easier for them by including a media kit as part of your landing page, which will contain the information and logos for your app that journalists can use for their reporting.

After the launch

Once testing and feedback sessions for the app are complete, you are finally ready to launch the app. First, though, there are further marketing steps you may wish to take to maximize your revenue and reach.

• Email your pre-launch list: It is likely those people who signed up to receive a notification when your app launches are already aware, particularly if they have been receiving product updates via a newsletter. However, making a big launch announcement to those who came on board early can’t hurt.
• Create a press release: If you have networked with journalists and other online publications before launch, there is a chance they will be interested in publishing a press release about your product. These are often cost-effective ways of grabbing some additional attention.
• Utilize paid marketing: While organic growth is the preferred option, you may wish to invest in some paid marketing if your budget allows. A Facebook ad could be a good option, with a reported cost-per-click increase of 13% compared to 2020.
• Get early adopters: You can find early adopters online through various communities such as Reddit, BetaList, Product Hunt, Indie Hackers, Quora, and Hacker News.

How to sell an app?

So now, we’ve arrived. Your app has been on the market and is selling well. You are bringing in revenue from in-app purchases. You have a loyal customer base, but you feel you’ve taken the app as far as you’re willing to go and want to pursue new endeavors. It’s time to sell your app.

There are several avenues you can follow. However, before starting the sales process, you need to consider the following.

Transfer criteria

When you choose to sell your app, you are essentially transferring it over to a new developer’s account, where they can manage and develop the app. However, not all apps are eligible for transfer.

An app will need one of the following statuses:

• Ready for sale.
• Prepare for submission.
• Developer removed from sale.
• Invalid binary.
• Developer rejected.
• Rejected.

Additionally, no version of the app can use iCloud entitlement, the app must have had at least one version released to an App Store, and no version of the app can use Passbook entitlement.

You can read here for a full list of criteria.

How much can you sell an app for?

Naturally, the rewards for your efforts are often the first thing you might think of when you’ve decided to sell their mobile app. 

Source: Flippa

Though the overall process of determining a pricing model is far more detailed, you can estimate your app’s worth by applying a one (x12) to five-year (x60) forecast multiplier to your net revenue. It is logical to start with the highest range to ensure you are not selling yourself short.

So if, for example, your net revenue per month is $4,000 (x60), your initial starting valuation over five years might come in at $240,000. Once you have established the value, it will then be down to the buyer to determine why this highest range is not a suitable price for the sale. 

If your app is less than a year old and cannot fulfill the lowest forecast multiplier, there will likely be a sharp drop in the number of potential buyers. They will need as much reassurance and evidence as possible that what they are purchasing has long-term staying power or potential. Other factors, such as high traffic and revenue diversity, will appeal to many buyers.

As an alternative, you can use Flippa’s online business valuation tool, which will give you a far more detailed breakdown of your app’s valuation.

Can I sell my app to Apple, Google, or Facebook?

The dream scenario is for this to happen. Voice recognition software Siri was rumored to have been sold for around $200 million, netting its investors and developers huge profits.

However, the reality is that these tech giants will only want to purchase apps that will give them a significant advantage over their competitors. It goes back to the first consideration you took when starting this journey. Does the app solve a problem or issue?

If the issue is a resounding yes, and you have the evidence to back this up, then perhaps they will take note of your app and make you an offer.

Tip: It is also unwise to contemplate selling your app idea to one of the big players. If you submit an idea to either Apple or Google and either company takes a liking to it, they will be able to claim it as their own in line with their Unsolicited Idea Submission Policy.

How to sell an app to a company?

There are many alternatives to selling your app to one of the big three. Marketplaces like Flippa are always looking for new customer acquisition apps, services, and products.

Flippa acts as a mediator between buyers and sellers. If you are looking to go down this route, you will need to list your app as being for sale. In a similar vein to App Store Optimization, the more details you can provide potential buyers, the more interest you will likely generate.

Operations, financial performance, track records, and proof of revenue are critical factors in proving that your app is a quality acquisition. If these are clearly defined, you will find your app higher up the listings.

Other companies are looking to bolster their portfolios and consider buying apps directly from the owner. If one of these companies approaches you, you can choose to enter the negotiation process.

Negotiations

If you are inexperienced when dealing with negotiations or have no team member well versed in the process, you should always seek independent advice beforehand. App brokers can also provide guidance, but unlike real estate, they are not duty-bound to favor you in the negotiations.

Buyers will always look for the best deal, and some may not hesitate to take advantage of owners keen to make the sale. A knowledgeable negotiator or someone should be able to appraise the app accurately and provide a logical estimate price. This will give you something to work with regarding the first offer, which will likely be lower than the evaluation.

Summing up

Selling apps doesn’t have to be stressful. If you are well versed in the art, there is enormous potential for profits and monetary gains. Ultimately, only you will have the power to determine the final destination for your app.

At Flippa, we have provided an online marketplace for buyers and sellers to trade since 2009. As a result, we are now the world’s leading platform for all forms of digital media and assets to grow and thrive. If you believe you have an app ready to sell, contact us today, and let’s get started.

Frequently asked questions

What programming languages should I use to build an app?

For mobile app design, it is crucial to develop your app in a technology that is widely being used by developers. Ultimately, it may come down to the specific functionality that an app needs and one programming language may be able to handle it better than another. 

With that being said, it is vital for entrepreneurs to explore trends. For example, some developers prefer agile development; whereas others might prefer the waterfall approach to app building.

How to sell your mobile app?

There are plenty of ways to sell a mobile app such as being acquired by a large company, selling your app to a competitor, or through a private sale. 

You can also sell your app on Flippa, a global online marketplace where individuals and business owners buy and sell websites, online businesses, apps, and digital real estate.

The selling price will largely depend on your app metrics, valuation, revenue, and the competitiveness of your business model.

Flippa’s unparalleled buyer pool gives asset owners of all sizes and types access to private equity, institutional buyers, and high-net worth individuals.

The portfolio of Singapore-based apps, generating $12 million of revenue, with an annual growth of ~30% was purchased by an international publisher on Flippa’s platform.

Despite the app portfolio being a private listing, Flippa matched 80 verified and prospective app buyers with a combined buyer wallet in excess of $1BN.

About the Business

The portfolio of 36 apps targets startups and small/medium sized businesses and offers utilities like logo creation, video effects, online invite creation, and watermarking. At the time of sale, each app type had a download of 4,720,000, 1,540,000, 855,000, and 926,000 respectively, and most apps were priced between $3.00 to $4.99 per week, for full access with an average rating of 4.6.

Business Appeal

At the time of sale, the apps were generating an annual revenue of $11.4M with a very healthy 57% net margin (Seller Discretionary Earnings).

The metrics in the apps portfolio were simply stunning: The collection of apps were consistently generating in excess of $500,000 per month, representing nearly 60% margin. Critically, it was the high daily active usage that was appealing. This is a major metric that buyers look at when acquiring an app: customer usage. In this case, the portfolio was generating approximately 30,000 daily active users.

The Buying Journey

As tends to be the case with much larger asset purchases, the sale wasn’t quick. With an app portfolio of this size, the thorough, due diligence and matching process lasted 6 months.

First, Flippa took its time to verify the listing. Regardless of size, whether between $25,000 to $55MM, all assets are verified. Flippa then uses its proprietary matching technology to take all attributes of a listing and predict buyer fit based on search behavior, buyer mandate, and “buyers like you also looked at..”  capability.

It’s important to note that both buyer and seller wished to remain anonymous.

Once the match was successfully completed, Flippa consulted the relevant buyer(s) and seller, established readiness, and presented the Letter of Intent. Generally speaking, buyers will take the lead. At this stage, they’ll move to due diligence, and in this case, it was an approximately 30-day process. We made available our integrated trust account and safely administered and adhered to the contract terms. 

Related: Buyer Due Diligence Checklist

A letter of intent was a critical step here, as it set out the terms of the deal including price, deal structure, and terms. It  also talked about a due diligence period and then critically, the expected close date. Fippa’s new embedded LOI feature is now available on any listing with an asking price.

Related: What is a Letter of Intent and Why Do You Need One?

Inspired by this story? Read up on others who have successfully bought and sold their businesses here.

If you’re ready to sell, check out our First Time Seller’s Guide.

Like this buyer and seller, you too can master proper buyer and seller communications etiquette. We’ll show you how to that here.

With a new buyer joining our Flippa platform every minute, now might be the time to sell your digital asset.

If you’re thinking of selling your online business but not sure where to start, this seller onboarding guide will help you get on your way! It’s easy, fast, and intuitive.

With Flippa, you can:

• get an accurate valuation of your online business or digital asset
• list a business for sale using a step-by-step template
• get matched and connected with thousands of qualified buyers who are specifically interested in your asset type
• discuss, negotiate, and agree on sale terms; perform due diligence and 
• get paid.

The first step is to find out the value of your digital asset or online business by using Flippa’s Intelligent Valuations Engine.  It’s free, easy, and quick. The valuation will give an accurate sense of the value of your business and give you an idea of an appropriate asking price.

How do we know?  Flippa’s valuation engine is backed by the largest data bank of sales data from over ten years of transactions. It’s like an encyclopedia for digital assets — any kind of digital asset and online business. This data is called on and cross referenced with the information you supply about your business to provide the world’s most accurate valuation — an indication of what the buying community will pay.

Start by answering a few questions about your business such as business type and revenue model, your URL, date you started your business, the number of hours a week you spend to run your business, annual revenue, annual expenses, and any other information that is relevant to your business such as traffic, repeat business, and social media.

Valuation in hand, you’ll be inspired and motivated to list it!

Creating a listing is as easy as getting a valuation.  In fact, you already started the process with the valuation step. You need just a little more detail.

First, establish a Flippa Account register as a seller.  This enables you to not only list, but keep track of the listing activity, communicate with buyers on the platform, update your listing information, and compete the transaction.

Flippa is committed to safe and successful transactions on its marketplace. So we ask all registered buyers and sellers to verify their ID.  This can be done when you create a listing and select “My Profile” where a link steps you through the process. If you verify your ID at the time of listing, you must at the time of sale in the Sales Completion area.

Information Required To List

To create a listing for your online asset or business, you will need to: 

1. Provide preliminary details

Provide information on the nature of your online asset or business, your business URL, your business name, your registration date and location.

2. State your online asset or business type

Be it ecommerce, SaaS, Services, Marketplace, or Advertising. Depending on your selection, you will also need to nominate one or more sub-categories. For example, in the case of ecommerce, Dropship, Shopify, Digital Products, and/or Inventory Holding.

3. State the industry you operate in

Be it Electronics, Automotive, Business, Design & Style, Education, Entertainment, Food & Drink, General Knowledge, Health & Beauty, Hobbies & Games, Home & Garden, Internet, Lifestyle, Sports & Outdoors or Travel. This is important as it will impact how your listing appears in search results and marketing materials.

4.  State your monetization methods

When selling your online business, buyers will want to clearly understand how the business makes money. It’s crucial to highlight the businesses monetization methods, and the more divers your revenue streams, the more attractive your business will be to potential buyers. Ways in which your business may make money include:

Advertising Revenue: The business generates income through various advertising channels such as display ads, sponsored content, or affiliate marketing partnerships. A robust ad strategy and a substantial audience base contribute to steady revenue streams.

Subscription Model: Leveraging a subscription-based model, the business offers premium content, services, or products on a recurring payment basis. This model ensures predictable revenue and encourages customer retention.

E-commerce Sales: The online business sells physical or digital products directly to consumers through its e-commerce platform. A diverse product range, efficient logistics, and a seamless purchasing experience enhance revenue generation.

Freemium Model: By offering basic services for free and charging for premium features or upgrades, the business attracts a wide user base while monetizing through upselling premium offerings. This is most common in SaaS businesses.

Sponsorships and Partnerships: Collaborating with relevant brands or companies for sponsored content, partnerships, or co-branded initiatives can be a lucrative revenue stream, particularly if the business has a strong niche presence.

Lead Generation: Monetizing through lead generation involves capturing and selling qualified leads to other businesses within the industry. High-quality leads and effective lead nurturing strategies are essential for success in this model.

Affiliate Marketing: The business earns commissions by promoting third-party products or services through affiliate links. Strategic partnerships, targeted marketing campaigns, and transparent disclosure of affiliate relationships are key to maximizing earnings.

Licensing and Intellectual Property: If the business owns proprietary technology, software, or content, licensing agreements with other businesses or individuals can generate passive income through royalties or usage fees.

By highlighting these monetization methods, potential buyers gain insight into the diverse revenue streams and growth opportunities offered by the online business, enhancing its attractiveness and value in the marketplace.

5. Connect your Google Analytics account to show your site traffic

Why? Listings with Google Analytics connected receive 2.8x more views and 2.4x more watchers. Skip this step if you do not use Google Analytics.

6. Input revenue and expenses

Must be on a month-by-month basis for the most recent 12 month period. Using this information, Flippa will calculate your average net profit per month.

Also connecting any cloud accounting software you use for your business will give buyers a verified and clear idea of the profitability of your business. This may include Stripe, Xero or QuickBooks.

7. Attach a profit and loss (P&L)

Your P&L must detail the source of your revenue and expenses for the most recent 12 months. Or simply connect one of the cloud accountig software integrations Flippa offers – Stripe, Xero or QuickBooks.

8. Attach evidence of revenue to support the claims made in your P&L statement.

An example might be an extract from your Ecommerce dashboard. You can also connect a number of these platforms through Flippa’s network of integrations including Shopify, PayPal, WooCommerce, BigCommerce, eBay, Square, Magento, Shopee and Lazada.

9. Enter a tagline of 120 characters which describes your online asset or business.

We recommend using keywords which buyers are likely to search and avoid using exclamation marks, all caps or acronyms

10. Enter a description of your online asset or business.

To attract and engage buyers, be accurate, honest and spell out your unique selling proposition and key selling points. What does your online asset or business do? How does it make money? What is your fulfilment process? How do you source inventory? Will you provide post-sale support?

A great description of your business will be clear and concise, outlining what your business does, how it makes money and what the day-to-day operations consist of.

To get your started, here a few heading you can use:

• About the business: high level summary of what the business does, who started it, how it makes money and who the competitors are. Think of this as the executive summary.
• Business model: how does your business make money, do you have ongoing contracts with existing clients or suppliers, what are your revenue streams.
• Key metrics: list the top five to 10 metrics a buyers should be aware of when assessing your business. These should be the best performing metrics for the business.
• Operations: list the day-to-day operations of the business, what distribution looks like, the number of employees, the number of hours you spend on the business each week, and any ongoing software development requirements.
• Customers: where are your customers bases, are they repeat customers or one-time purchasers, and are there opportunities to easily grow the customer base?
• Financials: clearly describe if the business is stable, growing or declining in revenue and profit, and what time frame is this over, list your net profit and any ongoing contracts you have with clients.
• Growth opportunities: share any insight you have to potential growth opportunities and what skills a potential buyer might need to capitalize on these opportunities.
• Reason for selling: this is key to helping a buyer understand your motivations for selling, as well as where their skill set may be able to take the business to the next level.

11. Attach a photograph of your site, product, or service (min 550px x 300px).

12. Provide any other key ancillary details

For example, the size of your social media following, inventory held (if any/relevant) and assets to be included in the sale.

13. Choose between auction and fixed-price listing

There are two ways to sell on Flippa: auction and fixed-price listing.  The method that is best for you will depend on several factors including your asset type, unique personal circumstances, and your target buyer. 

Set a price which is fair to you, and a potential buyer. If you haven’t already, use Flippa Valuations to get a good idea. If you’re unsure about pricing, you may be better off with an auction-style listing

Fixed price, or classified listing, is a method of sale where a business is listed with a set price or guide that is open to negotiation. It’s most suitable for a business with a value over $100,000.

• Classified listings are open to offers and visible in search indefinitely until your listing sells.
• If you would like to change the price, add Google Analytics, or

• convert it to an auction instead you can do it through your liting settings.
• Please contact us if you would like to cancel your listing.

An auction a great way to generate immediate buyer interest and generate a high price relatively quickly due to the sense of urgency and limited tome to offer the business.  Auctions run for 30 days from date of listing.  If the reserve price has not been met within 30 days, your listing will then be open to offers indefinitely. The listing will be live and visible in search. You will be able to make offers to all interested buyers and add information through Listing Settings

A word of advice. We have seen thousands of sellers list and successfully sell on Flippa. We know that setting a price can be difficult.  It’s also emotional, as after all, you’re separating yourself from a business you put a lot, if not all, of yourself into. We get it, you’re attached, and you’ll be inclined to set a high price.

Or, you underestimated its value.  As a guide, Flippa recommends you start with a price equal to 2-2.5x of annual net profit of the last 12 month

Again, if you haven’t run a valuation with our tool, you can get an unemotional objective and realistic estimate of your business.  It’s objective because we compare your asset with the thousands of data points from previous sales on Flippa from age, type, industry, and financials.

Listing at a realistic achievable price, you improve your chances for a quick and easy sale.  Trust us. Do not include inventory value in your asking price. This factors in later.

OK, so, now you know how to value your business, list and price it. You can always update the listing, add financial information and integrations with Google or Shopify, upgrade it with marketing boosts or enlist other Flippa services such NDAs and legal contracts.  Ask your account manager for more advice and information.

Ready to sell your business? Check out How To Sell a Business: The First-Time Sellers Guide.

There’s no need to worry – you’re not the only one. But don’t give up yet! There are plenty of things you can do to help boost your sales, make your app stand out from the rest, and reach a wide audience. Here are nine top tips to help you sell your app quickly and easily. 

Read on for some valuable advice that could help take your business to the next level!

1. Make a great app!

OK, so it sounds obvious, but you’d be surprised how many people don’t take this step! If your app is low quality and full of glitches, then nobody’s going to want to invest in it. Same goes for Active Users, if you don’t have consistent monthly active users nobody’s going to want to buy an app that isn’t being used. That’s why you need to spend time researching and planning before you begin development. Think about the market. What’s trending? Why are people downloading certain apps, and not others? How can you use these insights to create a unique selling point for your app? By doing some market research, you can get ahead of the game before you even start.

2. Market yourself on social media

When it comes to marketing your new app, LinkedIn is one of the most powerful social media platforms around. Why? Because it makes it easy to connect with influencers , entrepreneurs, and industry experts that could provide you with valuable advice on how to market your app, plus they have a huge number of people who may be interested in what you’re selling. Promoting yourself on Linkedin also helps you establish your professional profile, allowing you to create a personal brand for yourself in the eyes of potential clients. It’s also free!

3 . Be patient

Right now, there are thousands of new apps being launched every week. So even if yours is high quality and has been well received by beta testers, it may take some time for it to gain traction. Just remember that there’s a lot of competition out there, so you need to be patient and persevere if you want to succeed. If people like your app, word will spread quickly – but it may take some time before the market is ready for it.

4 . Offer incentives for early adopters

If your app is new and relatively unheard of, then you’re going to have a tough time getting it noticed – even with a fantastic design and great reviews. So how can you attract more customers? One way is by offering incentives for people who sign up at the beginning, such as discounts or freebies. This way, you can generate some revenue from beta testers and early adopters, and spread the word to their friends and family.

5.Create video tutorials showcasing your app

If you have a complex or unique app, then it’s going to be harder for potential customers to understand how it works. In this case, you should consider creating video tutorials that explain the basics. This will give people a clear idea of what they’re getting, and may help them see how useful your app is – especially if it’s particularly innovative!

6 . Use targeted ads

If you’re struggling to attract attention for your app, then it might be time to call in some reinforcements – such as social media advertising. There are plenty of ways that you can target customers via Facebook or Google , depending on your budget. Using targeted ads is a great way to spread the word about your app in a quick and cost-effective manner. You can tailor your adverts to suit different markets, meaning that you’re bound to be seen by someone who’s interested!

7 . Create a fantastic website

Your app isn’t going to sell if nobody knows where to find it. That’s why you need to invest time in creating a fantastic website that promotes your app and makes it easy for customers to purchase. Your website should also be engaging, attractive, informative, and easy to navigate. If you’re struggling to get started, then consider investing in some professional web design services .

8. Don’t neglect customer service

The best way to attract customers is by providing them with a great customer service experience. This means answering all queries promptly, solving any problems quickly and efficiently, and keeping customers updated on the status of their orders. But don’t just wait for complaints! Try to proactively ensure that your customers are happy with every step of the purchasing process so they remain loyal customers. Your App Store or Google Play rating is always an important indicator for customer satisfaction!

9 . Keep tweaking your app!

Even if you have the most amazing new app on the market, you still need to keep on top of things. That means keeping on top of updates, implementing user feedback, and staying ahead of the curve when it comes to trends in mobile technology. You should also keep an eye on the competition and be prepared to make improvements or create new versions of your original app if necessary.

Have you tried implementing any of these tips to help sell your app? If not, now is the time to start. By following our guide and putting in a little extra effort, you can see a significant increase in downloads and positive reviews. Selling an app can be difficult, but with the right tools it’s definitely doable. So get started today and watch your sales soar!

Google Play Store has reported 98% of mobile app revenue gets generated from free apps. Go through the article to learn the most effective ways of making money using your mobile app.

Before we start learning how to monetize a mobile app, let us first have a clear understanding of what app monetization is.

What is App Monetization?

App monetization is a combination of multiple strategies that are aimed at leveraging the user base of the app so that the app owners can earn money from it. This is the most effective way for app developers to generate additional revenue within the app.

App monetization strategies can vary depending upon the type of app you have created. You can go through the App Monetization course on Appy Pie Academy to learn various methods and choose the one that best suits your business needs.

Best Ways to Monetize an App

Here are a few major app monetization methods that you can apply to make more money from your app.

1. In-App Purchases:

This is one of the most effective app monetization strategies and the most popular one in the app industry. As per a recent study, in-app purchases make up around 47% of the total revenue generated by app developers worldwide. On most of the multiplayer apps like Clash of Clans, Subway Surfers, etc., users tend to purchase in-app items to move a step ahead of their opponents.

2. Offer Free and Premium Versions:

You can offer the basic version of your app for free and offer some special features with a premium version. The free version of your app can be a teaser for the consumers to get them hooked. If your users like your app, they will consider going for the paid version.

Most of the apps on Google Play Store and Apple App Store are free to download. There are both pros and cons to this app monetization strategy. While free downloads attract more users to download your app, there is a possibility they easily lose interest as they have made no monetary investment in the download.

3. Paid Apps:

Creating a paid app seems to be one of the easiest and quickest ways of making money through the mobile app you built. It may seem like a paid app can help you turn a profit and recoup your app development costs in no time, but you could prove to be wrong.

As per a recent study, only 20% of the total paid apps get more than 100 downloads. So, make sure your app is priced in the most common range and has a better chance of becoming successful. This increases your chances of recouping your costs and achieving a reliable revenue stream.

If used right, app monetization using the paid model is the best idea for making money using an app. Try creating a truly unique app and promote it well on the app marketplace using engaging descriptions, amazing screenshots, and plenty of five-star reviews to make a good amount of money.

4. App Development Partnerships:

You can find a potential partner with an almost similar target audience and offer to cross-promote each other’s mobile apps. You can use your partner app developer’s email lists to promote your app. If they don’t have a specific email list, you can help them create an offer that they can exclusively offer their audience while mentioning your brand name. This helps you funnel the audience to one of your CTAs.

5. Ad Revenue:

You can post ads to monetize your mobile app. Digital advertising can help you improve communication between consumers and advertisers. There are three sorts of ad revenues that you can consider.

·         Cost per Click

·         Cost per Action

·         Cost per Thousand Impressions

Cost per thousand impressions is the most popular type of ad revenue as it doesn’t need the user to click on the ad for the mobile app developer to make money. The charges are less but they are also less dependent on the user experience.

6. Upgrade to Remove Ads:

People don’t like seeing ads in their apps and they always try to find an option to remove them. You must create two versions for your app – free and paid. In the free version, you can include ads to make money. However, in the paid version, you can offer an excellent user experience to your users with no ads at all. The paid version will help you make revenue from direct app downloads and sales, rather than ads.

7. Affiliate Programs:

Various businesses have affiliate programs for app developers that help them promote their apps. With affiliate programs, you don’t earn a big commission, but you get to choose from a wide range of apps that you can promote. You can find the most popular apps and promote them in your app to make good commissions.

8. Mobile Marketing Automation:

Mobile marketing is one of the best ways to monetize your mobile app. An effective mobile marketing strategy includes text messages, push notifications, personalized campaigns, in-app messages, social media advertisements, and much more. A mobile marketing strategy loaded with these ways helps you keep your users engaged with your app.

With mobile marketing automation, you can convince your app users to spend money inside your app. They can go through your product advertisements on their social media profiles using their smartphones and can visit your app at the same time to avail those offers.

You can study your users’ behavior and create personalized campaigns, text messages, or push notifications based on their preferences. Sending out push notifications and in-app messages can help your app users know about attractive deals and offers and stimulate them to make a purchase.

You can try creating and monetizing your app using Appy Pie’s AppMakr. The software comes with various amazing features and lets you send up to 75000 push notifications per month per app to help you connect better with your app users.

9. Strong Content Strategies:

Make sure you regularly refresh your app content to keep your users engaged. For example, if your business posts news stories, make sure the news is always updated and if it has a blog page, you can make the most recent and updated blog post available for the users through your app.

With constantly updating content, you can make your paying users keep coming back to you. The reason behind this is simple. Most users after making one or two in-app purchases think that they have used your app to its full potential. However, a constant stream of new content can help you keep your users connected to your app.

With an updated app and its updated content, you can retain your existing app users and help them make more purchases. It can also attract new users with its advanced features and up-to-date information.

10. Text Message Marketing:

You can also gain your users’ attention by sending notices for contests, reminders, app updates, promotions, etc. using simple text messages. This is one of the most effective ways of driving users back to your mobile app. With text message marketing, you can easily reach and retain your high-value users.

When it comes to SMS marketing, the best you can do is send your users the coupons for currently running offers. As per the statistics, 90% of the app users read these messages within three minutes of receiving them. And they use these discount coupons ten times more often when compared to the coupons received from other sources.

Conclusion

A mobile app, if monetized right, can help you expand your business and improve your customer base. Not just that, it can also become a considerable source of revenue for your business. Make the best use of these app monetization strategies to grow your business and generate more app revenue than ever!

One favorite integration of ours is Appy Pie AppMakr as it help you create an app that is already monetized. Subscriptions, advertisements, and in-app purchases are the best ways of making money by using a mobile app. The software helps you with all including push notifications and in-app purchases. It allows you to customize your app as per your needs without writing even a single line of code.

Appy Pie’s AppMakr also helps you promote and optimize your app to gain more and more downloads. The more downloads you get, the more money you will be able to make with your app. Also doesn’t hurt that they have a solid support team to help you out.

Now, the last but not the least decision for you to make – Would you charge your users for downloading your app?