Want to Sell Your App Online? Here’s Everything You Need To Know!

As an app developer, what do you think your app is, an asset or a liability? Like all businesses, apps are assets that can be sold and bought in the digital marketplace. According to Business of Apps, in May 2022, over 5.5 million mobile apps were available between Apple’s App Store and Google Play Store alone.  

You can monetize your app by adding a price for downloads, subscription options, including ads, and even one-time in-app purchase options. But, this can be tedious for anyone. Having to calculate ROIs and revenue earned and track data analysis while planning the next app to build is tough.  

So, why not sell apps online? That way, you no longer have to stress over analyzing and checking monetization figures, nor do you have to worry about paying to market the app. With a single transaction, you can move on to brainstorming new app ideas. 

How can I sell my app?

Mobile apps are predicted to generate $935 billion in revenue by 2023. But monetizing your app can involve constant tracking and analysis. You need to check the latest trends, keep up with what your competitors are doing, and analyze data from hundreds of perspectives (sales, cost, marketing budget, etc.) while planning your next big app.

Rather than spending time brainstorming what to code next, you will be spending nights learning about marketing your app and getting the best rates. Instead, you can sell apps online from the widely available platforms. These platforms will evaluate your apps and give you insights into code changes that will optimize them and find the best buyers.  

If your app is making money, why sell it?

If your app makes money, selling it may not seem the best choice. But, rather than stressing how to monetize your app or get the best possible ROI, why not sell it? You may not understand how the market works as an app creator and publisher. Did you know buying and selling apps is an industry in itself?

Here are a few reasons why you should consider selling your app: 
You may get shortchanged by the more prominent players 
Need to research the market share and target audience that your app connects with
Need to analyze the hundreds of data points you get 
Need to look for locations or pockets where your interested users are present

If you get tied down doing all this, then how will you get the time to design and perfect the app? It is best to sell your app so that all these aspects can be taken care of and you can get back to doing what you love - coding!

How do I evaluate my app?

When evaluating the worth of your app, do not consider just the amount a person is willing to pay for it. There are multiple other factors to look into:

Cash is Important! 

When planning to sell your app, evaluating your net cash flow is one of the essential aspects you need to consider. Let us take a look at how to calculate net cash flow:

Net Cash Flow = Sum of all cash generated by your app - all related expenses

In the equation: 
Sum of cash generated - Includes download fees, costs to update & maintain the app, app store fees, licensing costs, etc. (Remember, include ALL your costs! Including your own time spent in developing and maintaining the app)

Now that you know your net cash flow, you can calculate the value of your app.

Let’s understand this better with the below example:

Say your app generates $10,000 in net cash flow per year. The multiples include various factors, but for most apps, the multiples are around 2X to 3X. So, your app should be approximately $20,000 to $30,000.

Some of the factors that can impact your multiples include:

The niche of the app 
The prospective growth and future growth trajectory 
Your proven marketing strategies 
The time commitment to the app

Competitors' Selling Point

Take a look at a few apps that are similar to your one. What is the rate they sell for? 
The central aspect is to define ‘similar apps’. Here also, the same factors that go into assessing multiples are applicable. Factors include growth prospects, marketing strategies, niche, time committed, net cash flow and total download per week or month.

But, each app is different. So, just because Whatsapp sold for $19 billion does not mean that your app will as well.

Revenue Sustainability

Another factor that has a significant impact on the evaluation of an app is revenue sustainability. It is essential for subscription apps with a history of low subscriber churn as they command much higher valuations than apps dependent on single-time purchases.  

The two most prominent examples of Revenue Sustainability are Netflix and Amazon Prime. Users need to take monthly subscriptions to keep watching their favourite programs. But unlike Netflix, which only has a subscription for viewing shows and movies, Amazon Prime members can get early-bird discounts and same-day delivery with the same Prime Account.

Retention Rate

The retention rate is calculated based on the number of users still active on an app after a set time. Users need to be active on your app to be added to the calculation. App stores and investors generally look at retention rates when buying apps.

To calculate your retention rate, look at how many users returned on Day 1 (d1) and Day 7 (d7). A healthy d1 retention rate is around 35-60%, whereas, after d7, it should be more than half.

ARPDAU 

To calculate ARPDAU or Average Revenue Per Daily Active User, divide revenue based on the number of active users in 24 hours.

ARPDAU is one of the essential calculations required to measure the effectiveness of monetization of an app. If in a month, more users download your app with lower ARPDAU, then your monetization is working. But, if it goes down, then you need to evaluate why your users are not active.

In the industry, an ARPDAU of $0.05 is considered healthy. But apps like Pokemon GO broke all monetization records with an ARPDAU of $0.25.

So, where does KalaGato fit in?

At KalaGato, our mission is to help monetize apps for publishers and creators. We help optimize your existing app revenue and even help build your name in the app-selling world. Our quick and easy 30-day mobile app monetization allows you to concentrate more on your next project than worrying about how much this project sells.

Let our experts help you get the best bid for your app, where you can also be involved in the selling process. So, instead of wasting time trying to understand how to sell your app, let us help you get back to your passion for coding!