How to sell your app: insights from an expert

How do you sell your app?

Dunno about you, but I can spend hours browsing Flippa or Sell My App, checking out all the apps and games for sale. But where my interest is mostly buyer’s curiosity, with a little dreaming, you might actually be looking to sell your mobile app in order to fund development elsewhere.

Sometimes you’re just not the right person or company to take your app to the next level. You need more cash, or you need marketing expertise that you don’t have. If that’s so, how do you sell your app to another publisher, studio, investor, or app aggregator?

I recently chatted with an app sales expert, Charlie Ryan of AppFlip, about how this whole process works. Hit play and keep scrolling …

Why you might sell your mobile app

Not all your apps are hits. In fact, most of them are not. But that doesn’t mean that they couldn’t do really well in another publisher’s portfolio. 

Because while sometimes apps are successful mostly because they’re just so freakishly awesome, sometimes they’re successful mostly because they have the right marketing, support, maintenance, and live ops.

 

 

“Publishers  might want to sell their apps, for example, because they might have a change in strategy, or it could be they’re targeting a certain sort of category and they want to build out a portfolio there,” says Ryan. “By taking that approach, there’s a lot of benefits they can have from it: things like cross marketing, things like getting a lot of synergies by focusing on a certain category.”

“And you see it with some publishers, they might have started broad — they were developing a lot of different apps across different categories — and then from that they see, okay, if we actually just get a bit more specific here in the apps that we acquire and the apps that we build ourselves, we can get a lot of synergies from that and it will be more beneficial for us as a company in terms of growth and generating more revenue.”

Or you might simply want to sell your app to make some quick cash, or realize a return on a long term investment.

Sometimes it’s a developer with a build-and-flip business strategy, which (to my mind) makes for a more risky investment proposition for a buyer.

Who’s buying mobile apps?

Individual investors might buy mobile apps if they fancy a fling as a mobile mogul, but most of the business is app aggregators, Ryan says.

Some of those are publishing studios looking to add to their stable and generate scale. Or maybe wanting to fill a gap in their portfolio, or acquire some specific unique code or value. And some of those are ad networks that have their own studios so they develop their ad supply they can fill with the demand from their clients: a sort of poor man’s walled garden, if you will.

But some are purpose-built app aggregator companies, which have gotten particularly popular in the last few years, Ryan says.

“[An app aggregator is] a company that just went and fundraised cash,” he says. 

“So what they would do is they would assemble a team — some rock stars who’ve been in the app space before — and they would raise that cash and go out and use it to start buying mobile apps.”

Prepping your app for sale

If you’re prepping your app for sale, you need to get your ducks in a row both technically and financially.

You’ll want to optimize performance and ensure your app is bug-free, updated, performs well, and has both quality reviews and a significant quantity of them (along with some new or recent ones).

You’ll need some level of documentation: the cleaner and more extensive the better.

 

 

And you’ll need a clean, clear, and verifiable track record of growth: users, subscribers, revenue, ideally for as long as possible. Ryan deals in the higher end of the market, not the build-and-flip, and he’s looking for a couple of years of revenue history, typically.

User and revenue retention matter, unsurprisingly.

“It’s really focusing on the cash flow of the mobile app … your revenue and your profit margin for the last 12 months versus the previous 12 months, and as well looking at what the retention looks like on your subscriptions,” he says.

That helps both a seller and a buyer estimate future revenue potential, user growth and retention, and app longevity — both with extra investment and without — in order to value an app appropriately. 

You’ll also need to do some market research: what are similar apps selling for?

Your app’s potential longevity also matters: is it technologically complex? Hard to maintain? Does it play on something that’s super-hot right now (like AI friends and chatbots) but hasn’t been around long enough to demonstrate staying power?

Hot verticals if you want to sell your app

If you’re looking to sell your app, it’ll be helpful to be in a hot app category.

Hot verticals might be a bit counterintuitive, because they’re not just flash-in-the-pan categories but long-lasting apps. Evergreen categories include:

• Health and fitness
• Utilities
• Productivity
• Education
• Fintech
• Password managers

Categories that are high in demand are practical. They get used daily or weekly. They matter to their users. They have lasting use cases generating high retention numbers that provide revenue certainty, making them more attractive to buyers.

Best monetization methods if you want to sell your app

It helps to be big into subscription revenue if you want to sell your app.

“[The payment method ]that’s most popular is definitely subscription,” Ryan says. “There’s just so many of them out there compared to OTP (one-time purchase) or compared to advertising revenue apps.”

Subscription gives a buyer some level of confidence that historical revenue trends will continue. But there’s also a market for a certain kind of one-time purchase apps or ad monetization apps: ones that can clearly and simply be converted into subscription apps.

There is an additional benefit for ad-supported apps, though, depending on what buyers are looking for:

“The thing with the advertising revenue apps is they can get to such a huge user base because so many people would use them,” Ryan says. “Typically, any of the ones that I’ve seen, the user base has been enormous compared to what it would be like to us compared to a subscription app.”

That could be very attractive to an ad network that aggregates app supply, or to an app publishing studio that knows how to cross-market apps very effectively.

Actually selling your app

Clearly, if you have a high-end app that makes significant revenue, or has significant worth to a buyer, you might use a broker like Ryan.

If you’re more of a DIY type of person, you might pick a marketplace like Flippa or Sell My App. Just like doing user acquisition for your app, you’ll need to create a high-quality listing with the best photos and videos you can generate, along with an app description that highlights your app’s unique features and competitive advantages.

And then you’ll need to ensure you’re covered legally, that funds will be held in escrow, and that both seller and buyer are protected from fraud or other unpleasant surprises.

You might also have to provide a transition period of support while the app’s new owner gets up to speed with everything.

Much more in the full podcast

Check out the full Growth Masterminds podcast if you’re interested in learning more, or just if you want to subscribe to Growth Masterminds and suck up some knowledge from smart guests from time to time.

Check out past episodes here …