Online Distribution Options For Selling Software. (Tony P. Allsopp)
Mar 9, 2010
Distributing and selling software online has become increasing popular with the recent rise in popularity of open source software and smart phone applications. An industry has developed to support the ways of distributing these applications online. This guide details the two business models in widespread use today. Each has control, security and cost implications that could either suit or not suit software authors and sway their preferred choice.
Third Party Vendors/Distributors
This is a scenario that should be familiar to most people who have seen online sites listing thousands of applications (freeware/shareware/commercial purchase).
In this model, the software owner uploads their product to the distributor's site. The distributor controls all sales and promotion of the product for a commission on each sale made. Developers of iPhone applications use this approach to benefit from Apple's brand and sales channel. Developers of other software for PCs/Macs may wish to use several sales channels to increase their potential sales and diminish the risk of a distributor failing (going bust or failing to sell enough of their product).
The distributor manages the full shopping experience online (including the shopping cart and payment processing) which some software owners will be happy not to administer in spite of not being in command of the marketing of their product on the distributor's site.
When a customer buys the software, the download link security is controlled by the distributor to the extent that the link can have a time limit placed on it along with restrictions on the number of download attempts that are possible.
Given that you have no access to the purchaser's details; you cannot build up a membership listing of purchasers. As a result, you miss out on potential loyalty purchases. This could affect you if you intend publishing several software applications and therefore benefit from a listing of loyal customers.
Sales/Download Management & Distribution Tools
This approach provides a more independent approach that will suit many software creators. In this scenario, the software creator installs the software to manage sales and downloads on their own server. This lets them administer their own online shopping cart, secure download links and mailing list data. There are many open source and commercial available that can provide this functionality.
The benefits to the software owner of this model is the chance to capture customer mailing list data combined with taking control of the marketing of their product online.
The financial cost consist of the ticket price for the sales software (which be free if choosing the open source versions), any commissions to the payment processor and the wage cost of installing and administering the sales application.
To conclude
If you are developing applications for which you wish to tie in with the network effects of a large corporation (e.g. developing iPhone Apps) then leverage the third party vendor. You could try going it alone but you will be competing against the advertising and marketing strength of a huge organization.
If you wish to sell software online and retain control over marketing and customer data then installing your own sales management and distribution software solution will provide the benefits and control you seek.
If you are starting out selling your software online and only have one app to sell then using an online distributor would be the prudent option for you to test the waters with your software and establish what the market potential is.
About the AuthorWriting ebooks or software and want to sell them online? Read Tony's DLGuard review and get your software or ebook business online today..