benford.name: Blog Posts

App Store vs Chain Stores

Mon, Aug 16th, 2010

What do Wal-mart, Walgreens, Safeway and the App Store have in common?

They are all locked-down, closed, curated markets that that are difficult to get into into. Once inside, if you have a decent product you can make a lot of money.

Each of these chain stores is exactly like the App Store. You may never get approved and you may get kicked out at any time.

But I would argue that chain stores make the App Store look like a playground.

I worked for a company that attempted to enter the national chain-store market--it was a nightmare:

They can kick you out without notice for having poor sales.
They charge “slotting fees” to stay in their stores.
They’ll make large orders of your product and then return the entire thing one month later.
Payments come in 180 days after your product goes on the shelf (which can be 6 months after you’ve shipped it to them) and they still give themselves discounts for paying “on time”.
etc..

No one complains because a lot of successful companies make a lot of money. Strong competition and the difficulty of getting into a store only strengthens the companies that are there.

None of this stops people from shopping at these places. In fact, more people buy from them because they are curated marketplaces.

Open markets like Android Marketplace are not bad, but they may never be as profitable as the App Store. As a user, you're more likely to get garbage apps and viruses--which is why Apple's store is the way it is.

In the end, the App Store is good for the user. For now, it's a little rough on developers, but it could always be worse. Most likely it will only get better.

This is why I stay on the iOS platform, knowing what I know about the App Store approval process.