How to invest in an app business?

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Table of Contents

Key Takeaways

  • Mobile apps revenue keep showing steady year over year growth and are forecasted to grow over the next years.
  • There are many ways to invest in an app from developing one from scratch, to buying and repurposing templates, to buying operating app businesses that are already profitable.
  • Best places to buy apps or necessary assets are: Flippa, EmpireFlippers, Sellmyapp, Fliptopia & Code Canyon.
  • Most popular ways to monetize an app are sell the app, display ads or sell certain features within the app.
  • Running an app is just like running a small software business where you can expect to deal with marketing, bug fixes, customer service & optimization.
  • Technology continues to advance, and more and more entrepreneurs, small business owners, and investors start recognizing the benefits of buying apps, as well as other digital assets.

    Since more and more people are attached to their smartphones, tablets, and other electronic devices today, the digital world has become one of the greatest sources of professional and business opportunities, especially when it comes to purchasing a successful app business. Many businesses today use mobile apps in order to reach their target audiences successfully.

    If you are currently thinking of buying an app, and you want to know more about it, this article is for you.

    Worldwide Mobile App revenue has been steadily growing and is forecasted to grow to almost a trillion USD.

    Statistic: Worldwide mobile app revenues in 2014 to 2023 (in billion U.S. dollars) | Statista
    Find more statistics at Statista

    Here is another interesting statistic that shows growth rate of available apps in the App Store by category:

    Statistic: Worldwide mobile app revenues in 2014 to 2023 (in billion U.S. dollars) | Statista
    Find more statistics at Statista

    It is obvious that mobile apps offer great revenue generation potential. Question is how to invest in an app business as an investor?

    Where To Buy An App Business?

    Here is a list of top places that allow you to buy or sell apps:

    Flippa

    Flippa is one of the most well-known platforms where you can buy an app, as well as a website, online business, or domain. It is considered one of the most popular and reliable marketplaces where you can select the most suitable apps to buy and sell.

    As a buyer, you receive access to detailed insights into listed online businesses, including demographics, channels, analysis, financials, and others.

    If you are a first-time buyer, there is “Flippa Finder” service for you providing useful expert tips for a $50 fee.

    One of the best things about Flippa for buyers is that you can easily find the exact type of app you want to purchase at a great range of prices. Flippa lets sellers and developers explain the app they are selling in detail and include all the necessary information.

    Empire Flippers

    Empire Flippers

    It is another popular marketplace for buying and selling apps and other types of online businesses. Its home page includes business listings that include niche, monetization methods, expected price, and monthly net profit.

    One of the key features of this marketplace is that it has a search for businesses that is based on monetization methods, including ads, affiliates, e-commerce, dropshipping, and others.

    One more benefit of this website is its refundable deposit option. As a buyer, you will have to pay only a 5% refundable deposit of the price of a business you decided to purchase. In addition, you also receive access to all the information you need before completing your purchase.

    Also, there are only legitimate apps on Empire Flippers because the platform removes all fake listings before they go live.

    SellMyApp

    SellMyApp

    It is one of the most famous and biggest platforms where you can purchase app templates. It sells the source codes for both apps and games, and it has a team that will help you with reskinning and launching an app you purchase.

    You can purchase app templates for Android, iOS, and iWatch that are built using different frameworks, including Native Android, Cocos2dx, libGDX, Unity, Native iOS, and Buildbox.

    FlipTopia

    Fliptopia

    Unlike many other marketplaces, this platform allows you to purchase apps that are already issued in the app store. It sells not just the source code but the entire app, including its user base and the IP rights that are associated with it. Therefore, at first, it may seem to be an expensive platform for app buyers. However, it gives you an opportunity to become a sole proprietor.

    Code Canyon

    CodeCanyon

    It is an app marketplace from the Envato Family that allows you to purchase ready made apps for affordable prices. The website has a buyer protection policy, which makes the refund process easy and hassle-free.

    Even though the platform does not offer any launch or redskin services, sometimes sellers of apps may provide these services.

    What running an app business is like?

    If you decided to start running an app business, there are certain things you need to know and take into consideration because the mobile app markets are competitive, and it is hard to stand out. Here is what you need to know before buying an app for your business:

    Your Market

    You need to research your market and use your knowledge to find a gap that your app will fill. You should learn about your competitors, the strategies they use, their selling points, strengths and weaknesses of other apps similar to the one you want to buy, reviews from your competitors’ customers, etc.

    When you collect all this information, you will avoid the mistakes that your competitors make and be more successful in an app business.

    Your Target Audience

    You need to know your target audience, their problems, and understand how an app can solve them. Remember that any app is useless if it cannot solve the problems of the audience.

    For this reason, when you are starting an app business, you should understand what is the main purpose of the app, its functionality, how your audience will benefit from it, and what business goals this app will help you achieve.

    The Right App Type

    There are three types of apps to choose from – a hybrid, native, and web app. The choice should be determined by the purpose and functionality you have defined. Here are the key differences between these three types:

  • Programming languages apps are built in.
  • Access to native device APIs
  • Distribution method
  • Multi-platform support.
  • How To Monetize an App?

    Knowing how to invest in an app is not enough – it is also important to be able to monetize your app business. There are different methods of monetization, including the following:

    Ad Network

    An ad network (also known as an online advertising network) is a company that connects advertisers to websites that host advertisements. The most popular and reliable ad networks that you can use for monetization are:

  • Facebook and Instagram ads. They are the largest mobile ad channels today. You can run your ad campaigns to target the audience by their interests, age, location, education, and more.
  • Google AdMob. It is one of the most popular platforms that you can use in order to make money with your app. It is very easy to use and it allows you to choose from several different formats and features.
  • Unity ads. This ad network is perfect for game developers that allows you to reach over a billion devices.
  • Applovin. This network is recommended to you if you want to analyze your users, and your purpose is to acquire high-quality customers.
  • Freemium Model

    Today, many apps use subscription models to generate app revenue. A subscription model means that a user can download an app for free. Then, after the app is installed, the use received access to certain features in it for a limited period of time. Once this period is over, they have to pay a recurring fee in order to keep using the app.

    Freemium models work best alongside compelling apps characterized by clear user experience and functions.

    In-App Advertising

    This strategy has been popular for many years already, and without in-app advertising some apps would not even exist. It is one of the easiest monetization strategies, and it is quick to implement. Here is a list of the most common types of in-app advertising:

  • Banner ads
  • Interstitial ads
  • Native ads
  • Affiliate ads
  • Reward ads
  • App Store Optimization

    There are millions iOS and Android apps. For this reason, it is very important to know how to stand out in this crowd of competitors and make your app to be noticed. Here is a list of tips that you can use for your successful app store optimization:

  • Use a descriptive title for your app.
  • Use effective keywords. The best strategy is to use keywords at least five times in the app’s description.
  • Make sure to describe your app well. Your description should explain how the app will benefit users, what is the app’s main purpose, why it is worth the price, and what problems it can solve.
  • Use high-quality screenshots
  • Do not forget to add a preview video
  • Pick the right category for your app, so users can find it easily
  • Use an engaging and attractive app icon
  • Encourage positive reviews from users.
  • Re-evaluate your app regularly. It is recommended to do it every few weeks.
  • What Are The Benefits of running an app Businesses?

    There are many benefits of being in an app business, including the following:

  • Most apps do not require any maintenance after they are launched and running.
  • You can buy several apps and interlink them in order to boost your income.
  • App business is a great stable source of passive income.
  • What Are The Risks Of An App Business?

    Just like any other business, an app business has its own risks that need to be taken into consideration. Here is a list of some of the risks to watch out for:

  • It is better not to purchase a newly launched app because most news apps get their peak downloads right after being launched. It is recommended to wait a few months in order to see the real app’s statistics on downloads, usage, and income.
  • Ignore such lists as “New & Noteworthy” because these apps are usually good for a short-term win, rather than a long-term win.
  • Remember that technology is constantly changing, so most of the apps are never used again after several months of being downloaded.
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    Who Is Best Suited To Invest In Apps?

    Actually, anyone can benefit from investing in apps. App business is the right investment for you if you are an experienced investor, and you want to expand your revenue stream into a completely new area.

    It is also suitable for complete newbies who do not know how to invest in an app at all. Buying an income-producing app can offer an easy entry and become a great source of income.

    Happy Investing!

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