> When setting your wholesale price, first multiply your cost of goods by two. This will ensure your wholesale profit margin is at least 50%. Profit margin is the gross profit a retailer earns when an item is sold. Apparel retail brands typically aim for a 30% to 50% wholesale profit margin, while direct-to-consumer retailers aim for a profit margin of 55% to 65%. (A margin is sometimes also referred to as “markup percentage.”)
So 50% is about normal for retail goods. Yes yes. They have physical merchandise they need to manage. Apple has engineers they need to pay to do their virtual distribution. Maybe 30% is excessive. Certainly that they're the only store and hold a monopoly on the things they allow people to do on their platform is probably fueling that margin to be higher than it should. However, if we look at Steam[2] and other console manufacturers, we see similar 30% markups. Maybe everyone is just copying Apple's lead here as "customers will swallow this". Or maybe Apple figured out a good virtual store distribution model and this is the markup needed for a sustainable thriving business.
[1] https://www.shopify.com/retail/product-pricing-for-wholesale... [2] https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
1) the majority of apps don’t pay apple a cent because they make their money off selling user information
2) of those that remain most likely aren’t reaching the income point where it stops being 15%
3) 30% matches the payments of every other store, except those stores that don’t pay for any of the platform development. It’s super easy to charge next to nothing when you don’t have to pay actual engineers to make actual products.
