App Store Small Business Program: fee reduction
Apple issued an act reducing the fee for app placement in App Store for small businesses. The idea was inspired by the intention to help small and independent companies during the pandemic. However, the end term of this program has not been set. Therefore, small businesses can significantly reduce their costs with the new fee rate. In our article you can read about the eligibility criteria of this program.
- Who can take advantage of reduced commissions on the App Store?
- What's the Small Business Privilege from Apple
- How small businesses qualify for the reduced commission
- How do I know if I have an Associated Developer Account?
Who can take advantage of the reduced commission on the App Store?
This program applies to existing business as well as to those who are just launching their apps. Developers with total app revenues under $1 million or who have not yet launched an app in the App Store can take advantage of the reduced insertion fee.
If the amount of revenue during the year exceeds $1 million, the standard fee applies to all subsequent sales after exceeding the limit.
If the developer's revenue is less than $1 million, they can apply for commission fee at the rate of 15%.
What is the privilege of Apple's small business program
Apple introduces a 15% rate (as opposed to the standard 30%) for (1) placement of paid apps or (2) in-app purchases.
Procedure for Small Businesses to Apply the Reduced Fee
Step 1. You must verify that you qualify as a small business. You can check your income in the Payments & Financial Statements section of App Store Connect.
Step 2. The developer must have an account (Associated Developer Accounts). When a developer applies for an account, he needs to list all the accounts he manages. He must also specify the following information:
- Legal entity’s or person’s name;
- Team ID;
- Email linked to the account;
- A description of the interaction between him and the account.
Step 3. Then submit the application. If approved, the new fee rate will apply after 15 days from the beginning of the new fiscal month (as in Apple fiscal calendar) following the one when the application was approved. For example, the application was approved on February 20, the reduced rate will apply from March 14.
But if you open a developer account and apply for the 15% rate at the same time, the program will start for you at the time of approval.
How do I know if I have an Associated Developer Account?
Firstly, you should accept the Apple Developer Program License Agreement to get this account.
Secondly, you should meet one of the following conditions:
- You have a share of more than 50% of another account, regardless of ownership;
- Another person has a share of more than 50% of your account;
- You actually make decisions in respect of the account;
- The other person has the right to make decisions about your account.
Fee reduction to 15% could play a significant role for the company, so it could be a good opportunity for eligible companies. Apple has tried to make the procedure of joining the program easier, however, you will have to go through some stages. Before submitting an application, you need to check the developer for compliance with the conditions. The key one is the revenue threshold. If you have any questions or need help with joining the program, contact the lawyers of A4 Law Firm.
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