Apple to reduce commission for small businesses with new App Store program

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Apple announced a new program designed to reduce app store commission 15% for small businesses earning up to $1 million per year. 

The new App Store Small Business Program will benefit the vast majority of developers who sell digital goods and services on the store, providing them with a reduced commission on paid apps and in-app purchases, according to Apple. It is expected to launch at the beginning of 2021. 

“Apps have taken on new importance as businesses adapt to a virtual world during the pandemic, and many small businesses have launched or dramatically grown their digital presence in order to continue to reach their customers and communities,” Apple wrote in a post. “The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem.”

Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission. This is half of the standard commission rate that applies for apps selling digital goods and services and making more than $1 million in proceeds. 

At the same time, if a participating developer falls below the $1 million threshold, the standard commission rate will apply for the remainder of the year and if a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15% commission the year after. 

“The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives,” said Tim Cook, the CEO of Apple. 

Additional details are available here.

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