You have a brilliant idea for an online business and now you are looking into buying apps as you don’t want to waste time and money writing your own. Simple! But don’t just dive into the app market. Read our guide on things to check out first, do your research, and then pounce on the apps that are best for you.

Gaming and non-gaming apps

There are many different kinds of apps on the app market but the difference in gaming and non-gaming is significant enough to warrant a special mention. Gaming apps have a very large potential audience that will use them heavily for a while before getting bored and moving on to something new. Non-gaming apps attract a more niche user group that utilise them only regularly but stay with them for much longer.

So expect a lot of short-lived users with gaming apps, and fewer but longer term customers with non-gaming ones. Factor this into your decision-making process when buying apps.

Age and Reliability

The app market moves quickly, so old apps might not be able to do everything that their modern counterparts can. They might be slow, prone to crashing, or just generally unreliable. Customers will quickly move on from apps with a bad reputation. So, when buying apps, find out how old they are, and their crash rates.

Revenue

As a smart business owner you will know the necessity of squeezing every penny of revenue out of your enterprise, and for that you have to be on top of all funding streams. When buying apps check out where their income comes from. Most of it will come from selling their core product or service of course, but successful apps can attract advertisers that pay per customer click-through, and affiliates that reimburse you for promoting them on your apps.

There are several simple but accurate ways to calculate app revenue. (A lot of acronyms coming up but don’t be put off!)

- ARPMAU (Annual Revenue Per Monthly Active User). This will tell you the average revenue that each of your users generates each day.

- DAU/MAU ratio (Daily Active User/Monthly Active User). This measure returns a percentage so, for example, a 75% ratio means that the app’s average user uses the app around 22 days a month. So you want a high DAU/MAU.

- LTV (LifeTime Value). This will tell you the average profit you can expect from each of your customers over their whole lifetime with you.

There are online tools for calculating all of these values. Basically, get as full a picture as you can of the revenue currently being generated, and what you can expect in the future, before buying apps.

Other things to think about

What is the retention rate? How long do users stay with the app? If it is constantly losing customers you need to understand why, and then decide whether the on-going marketing needed to attract new punters is worth the effort.

Finally, look at its ranking - how many downloads is it getting. If it’s high in the listings great, if not, do you think you can fettle it enough to raise it up?

Conclusion

The above is quite a list but, trust us, it is worth putting in the time to scour the app market before buying apps. Once you have the right app you will have nothing else to do but count your money.