Under Apple's App Store Review Guidelines, there is sometimes no choice but to use Apple's in-app purchase mechanism. Assuming you are dealing with a situation where there is a choice, what are the considerations you should think about. Here are a few you may like to consider.
- Price. You can only choose from the list of prices provided by iTunes. You cannot make up you own price. This tends not to be a serious issue as there are quite a few pricing 'tiers' you could choose from. However, this may mean that you need to align the pricing of your products with the pricing tiers offered by Apple - i.e. forcing you to set your pricing strategy to fit the Apple’s framework.
- Commission. A commission will need to be paid to Apple and currently is 30% of the price. This is not insignificant.
- Other transaction costs. One other costs that are not quite obvious (in the sense that it is difficult to quantify) is the potential effect of exchange rates if you sell the products outside your home country as most developers do. Admitted, I have not researched the detail mechanics adopted (if it is even published) but potentially there could be multiple exchange rates conversion by the time the money hit your bank account. It is quite likely that each of the conversion is performed with Apple’s best interest in mind; the corollary is that the conversion is not likely performed in your favors. This could all costs you money.
- When do you get your money. Under the present practice, Apple only forward payment to the developer once the amount has reached a certain threshold. At the moment, it is around $US150. And keep in mind that this is the amount payable to you so it is not the same as the total sale amount, i.e. this is net of Apple's commission. This may not be an issue if your sales volume is large, but it is something to keep in mind. In any event, the point to note is that there can be delay between the sale of your product inside the app and you seeing your money in your bank account. In operating a business, the timing of cash flow is an important issue.
- Customers' record. Apple's system will supposedly keep track of the items purchased by each users. However, it is unclear what happen in situation in which people changes phone or install the app on another device. Anyhow, we consider that it is best practice that the vendor also keep track of the items purchased by each person/device (of course, the extent of the tracking required would depend on the nature of the contents sold), meaning that you will need to implement your own database solution.
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